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Inside track: Superannuation, Funds Management & Financial Services

10 August 2020

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

ASIC cancels AFS licence of Global Merces Funds Management Limited
ASIC has cancelled the Australian financial services (AFS) licence of Global Merces Funds Management Limited (Global Merces) effective 20 July 2020 (07 August 2020).  More...

Superannuation trustees compensate members wrongly classified as ‘smokers’
Superannuation trustees that were classifying new members as ‘smokers’ by default and charging them higher life insurance premiums have ceased this his practice, and some trustees have remediated members for the extra premiums paid (07 August 2020). More...

APRA indeterminant on who pays for early release fraud
Overall investor experience with objective-based funds to date have been worse than reported total returns, according to Morningstar. The APRA has refused to confirm that superannuation funds will end up paying the cost of any fraud committed as a result of the Government’s hardship early release superannuation scheme (6 August 2020). More...

Super guarantee amnesty deadline approaches
The ATO will begin sending notices to Australian employers reminding them of the upcoming deadline for the super guarantee amnesty. The amnesty expires on 7 September 2020 (05 August 2020). More...

AFCA makes submission to ASIC’s product intervention powers consultation
The Australian Financial Complaints Authority (AFCA) has published its response to ASIC’s consultation on the proposed use of its product intervention powers to address significant consumer detriment arising from continuing credit contracts being provided to retail clients under a ‘collateral services’ model (05 August 2020). More...

Former financial adviser sentenced to six years’ imprisonment for dishonest conduct
Graeme Walter Miller, a former financial adviser and director of Australian financial services licensee CFS Private Wealth Pty Ltd, pleaded guilty to six counts of engaging in dishonest conduct in the course of carrying on a financial services business, contrary to section 1041G of the Corporations Act 2001 (04 August 2020).  More...

AFCA appoints Head of Membership Services
The Australian Financial Complaints Authority (AFCA) is pleased to announce the appointment of Mr. Campbell Daff to the newly created position of Head of Membership Services (03 August 2020).  More...

Insurance Council and AFCA agree to launch business interruption test case
The Insurance Council of Australia (ICA) and the Australian Financial Complaints Authority (AFCA) have agreed to file a test case considering the application of infectious diseases cover in business interruption policies (30 July  2020).   More...

Your move for recovery, super trustees tell government
funds are ready to back the energy transition, infrastructure and affordable housing to power an economic recovery from the COVID crisis, the AIST has told the government, but policy has limited large-scale investments (30 July 2020).  More...

In practice and courts

ASIC reports and class orders updated

30 July 2020
RG 271 Internal dispute resolution (new). The standards and requirements highlighted in this guide are enforceable. It explains what these financial firms must do to have an internal dispute resolution (IDR) system in place that meets ASIC’s standards and requirements.
REP 665 Response to submissions on CP 311 Internal dispute resolution: Update to RG 165 - Updated requirements for how financial firms deal with consumer and small business complaints  under their internal dispute resolution (IDR) procedures: see 20-171MR
ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98. See also: RG 165 (updated) and RG 267 (new cover note added). 

ASIC Corporations, Superannuation and Credit (Amendment) Instrument 2020/99
Amends the ASIC Corporations and Credit (Internal Dispute Resolution— Transitional) Instrument 2019/965 to preserve ASIC's existing internal dispute resolution policy in relation to complaints received by financial firms before 5 October 2021.

APRA weekly data on the superannuation early release scheme
The Early Release Initiative statistics for applications received between 20 April - 26 July 2020 are available on the APRA website here (updated 03 August 2020).

ATO: Proposed Superannuation Guarantee amnesty
The proposed Superannuation Guarantee (SG) Amnesty (the proposed amnesty) and re-introduced the associated legislation into Parliament. Until the proposed amnesty law is enacted by Parliament, ATO will continue to apply the existing law to the SGC statements you lodge. For more information see the: Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 and Explanatory memorandum.

APRA reminder:  superannuation licensees on upcoming legislative obligations
The APRA has written to registrable superannuation entity (RSE) licensees reaffirming its expectations regarding two key regulatory requirements - to undertake a Business Performance Review by 31 December 2020, and an outcomes assessment by 28 February 2021. View the letter here.

AFCA Current Matters
AFCA has paused processing complaints against insolvent firms. Read AFCA’s statement on the investigation of complaints about insolvent firms. Union Standard International Group Pty Ltd (Updated August 2020). 

Cases

Kander and Commissioner of Taxation (Taxation) [2020] AATA 2635
TAXATION – INCOME TAX - where applicant intended to enter into salary sacrifice arrangement – where applicant mistakenly directed employer to make after-tax  superannuation  contributions – whether ordinary income – decision affirmed

Legislation

Commonwealth

Regulations

ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98
30/07/2020 - This instrument sets out new standards and requirements that the Australian Securities and Investments Commission has made and approved for the internal dispute resolution procedures (IDR procedures) of financial firms, specifies requirements for written reasons for decisions about complaints in relation to regulated superannuation funds, approved deposit funds and retirement savings accounts, clarifies that financial firms must comply with their IDR procedures, and modifies the definition of “small business” in relation to IDR in Chapter 7 of the Corporations Act 2001 so it aligns with the definition of “small business” in the Rules of the Australian Financial Complaints Authority in relation to external dispute resolution.

Electronic Transactions Regulations 2020
29/07/2020 -For legislation administered by the Australian Prudential Regulation Authority (APRA) only specified information gathering provisions are now exempt from the Act. This will enable technology neutral communication between APRA and businesses and individuals that have dealings with APRA.

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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