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Inside track: Superannuation, Funds Management & Financial Services

12 August 2019

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

Findings from 31 December 2018 financial reports
ASIC announced the results from a review of the 31 December 2018 financial reports of 125 entities. Arising from the review, ASIC has made inquiries of 26 entities on 40 matters. The largest number of inquiries continue to relate to impairment of non-financial assets and inappropriate accounting treatments (08 August 2019).  More...

APRA flags 2020 for finalising related party action
The Australian Prudential Regulation Authority (APRA) has flagged its intention to finalise changes recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2020 (08 August 2019).  More...

ASIC sweeps super funds into whistleblower regime
Former employees and officers of superannuation funds and their service providers should be granted the same level of whistle-blower protections as those still working for funds, according to the Australian Institute of Superannuation Trustees (AIST) (08 August 2019).  More...

Federal Court finds that Sydney lawyer acted dishonestly
An appeal by Mr Yingjie Wang (also known as Jay Wang), a lawyer and accountant from Sydney, against his permanent banning from providing financial services has been dismissed by the Federal Court of Australia (07 August 2019).  More...

APRA provides six-monthly update on Royal Commission recommendations
The APRA provides the following update on its implementation of the recommendations directed at APRA by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (07 August 2019).   More...

Senate establishes inquiry into audit quality
An inquiry into the regulation of auditing in Australia has now been established, with the Parliamentary Joint Committee on Corporations and Financial Services set to issue a report by 1 March 2020. It will also look at the role and effectiveness of audit in detecting and reporting fraud and misconduct; the adequacy and performance of regulatory, standards, disciplinary and other bodies (05 August 2019).   More...

Former Melbourne financial adviser permanently banned from providing financial advice
ASIC has permanently banned former financial advisor Robert Shane Michael of Bentleigh, Victoria, from providing financial services for engaging in misconduct which included dishonestly borrowing money from his clients’ SMSF accounts and using them for his own personal expenditure (05 August 2019).  More... 

Tax Practitioners Board welcomes the release of independent review discussion paper
The Tax Practitioners Board (TPB) welcomed the release of a discussion paper in the review of the TPB and the Tax Agent Services Act 2009 (TASA). This discussion paper follows initial submissions on the terms of reference issued in April 2019) (01 August 2019).  More...

Big four and AMP fork out $120m for poor advice
Australia's five largest banking and financial services institutions have paid a total of $119.7 million in compensation as at 30 June 2019 to customers who suffered loss or detriment because of non-compliant advice given by financial advisers (02 August 2019).   More... 

Standing Economics Committee to expand inquiry into financial services sector
The Morrison Government has asked the House of Representatives Standing Committee on Economics to inquire into progress made by relevant financial institutions in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry ( 02 August 2019).  More... 

New credit reporting arrangements to facilitate better lending deals for consumers and protect vulnerable consumers
Changes to the Privacy Act will support the Government’s mandatory comprehensive credit reporting regime, which will increase lending competition and deliver better deals for Australian consumers (02 August 2019).  More... 

Consumer Data Right Bill passes
The Consumer Data Right Bill has passed both houses in parliament, with the Australian Banking Association (ABA) calling it a win for competition. Consumer watchdog ACCC will be responsible for advising what sectors should be added to the system, writing rules, accrediting new participants and enforcement against breaches of customers’ rights (02 August 2019 ).  More... 

ASIC update on compensation by institutions for poor financial advice
Australia's five largest banking and financial services institutions have paid a total of $119.7 million in compensation as at 30 June 2019 to customers who suffered loss or detriment because of non-compliant advice given by financial advisers. This compensation has been paid under review and remediation programs initiated as a result of the ASIC review reported on in Report 515 (01 August 2019).  More...

APRA claims positive impact from supervisory approaches
The 2019 Stakeholder Survey from the APRA is claiming the regulator’s supervisory approaches are having a positive impact on risk management and culture in the banking, insurance and superannuation industry, despite a downward trend (01 August 2019).  More...

Growing number of multiple job holders emphasises need to fix superannuation defaults
Data released by the Australian Bureau of Statistics (ABS) shows 2.1 million Australians held multiple jobs in 2016–17, providing a strong motivation to fix the default superannuation system which still allows the proliferation of multiple “zombie” accounts (01 August 2019).  More...

FSC 2019 FSC State of the Industry Report released
The report, a high-level summary and analysis of financial services, which includes banking, funds management, superannuation, insurance, financial markets and related services including financial advice, shows the sector produces $161 billion of value per year, or 9 per cent of our almost $2 trillion economy (01 August 2019).  More...

Consumers could miss out with rush to ban commissions
The FPA supports the phasing-out of commissions on investment products as recommended by the Financial Services Royal Commission, but the bill introduced by the Government has no additional details on how this will be done to ensure consumers benefit from the change (01 August 2019).  More...

Taking action on the Banking, Superannuation and Financial Services Royal Commission – Recommendation 2.4: Grandfathered Commissions
The Coalition Government will introduce legislation to ban the grandfathering of conflicted remuneration paid to financial advisers. The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 implements the Government's response to the Final Report, to end the grandfathering of conflicted remuneration by 1 January 2021 (30 July 2019).  More...

AFCA announces Deputy Chief Ombudsman
The Australian Financial Complaints Authority (AFCA) is pleased to announce the appointment of Dr June Smith as the Deputy Chief Ombudsman following a nationwide search (30 July 2019).  More...

ASIC’s tough line on auditors gets tick of approval
SMSF Association - 29 July 2019 - The SMSF Association fully supports the decision by ASIC to disqualify or add conditions to the registration of 17 auditors of self-managed superannuation funds (SMSFs) (29 July 2019).  More...

ASIC sues ANZ for misrepresentations and unconscionable conduct over account fees
ASIC alleges ANZ breached section 912A(1)(a) and (c) the Corporations Act 2001 which requires a licensee to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly and to comply with financial services laws (25 July 2019).  More... 

In practice and courts

ASIC consultation: new guidance for companies on whistleblower policies
ASIC is calling for public input on its proposed guidance on the new legal obligation on companies to implement a whistleblower policy, which must be made available to their officers and employees by 1 January 2020. The Proposed Regulatory Guide Whistleblower policies explains how companies can establish, implement and maintain a policy. The consultation is open for six weeks, with comments due by 18 September 2019 (07 August 2019).  More...  

Whistleblower policies: consultation paper
Australian Securities and Investments Commission
This consultation paper seeks feedback on our proposed guidance for entities that must have a whistleblower policy—public companies, large proprietary companies and proprietary companies that are trustees of registrable superannuation entities. More... 

Business Funding Guide
The Business Funding Guide aims to help tackle the access to funding crisis faced by Australian small businesses. Developed by the ASBFEO and Scottish Pacific Business Finance, the guide can be used by accountants, bookkeepers, brokers and other financial advisers to help their small business clients find the right funding and increase their likelihood of having funding applications approved. Download your copies here (31 July 2019).

Draft Legislation: Taking action on the Banking, Superannuation & Financial Services Industry Royal Commission - Recommendation 4.7: Extending unfair contracts terms to insurance contracts
Removing the exemption for insurance contracts from the UCT regime will ensure consumers and small businesses have the same protections regardless of which financial service or product they are purchasing. The exposure draft legislation is available on the Treasury website (30 July 2019).  More... 

APRA Consultations
Proposed approach to product responsibility under the Banking Executive Accountability Regime - Closing 23 August 2019

 IASB proposed amendments to IFRS 3 Business Combinations 
The amendments would update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. IFRS 3 specifies how a company should account for the assets and liabilities it acquires when it obtains control of a business. View the Exposure Draft Reference to the Conceptual Framework. Submit your comment letters here. Comments close 27 September 2019.

IFRS Forthcoming publication: IASB to issue Exposure Draft on the disclosure of accounting policies
The International Accounting Standards Board expects to publish the Exposure Draft Disclosure of Accounting Policies on 1 August 2019. The document will be available to download from the Open for comment section. (29 July 2019) More... 

AASB: Exposure Draft: Disclosure of Accounting Policies
ED 296 Disclosure of Accounting Policies proposes amendments to help entities provide accounting policy disclosures that are more useful to primary users of financial statements. Please submit your comments to the AASB by 28 October 2019 via the AASB website (02 August 2019). 

AASB Invitation to Comment
ITC 40 Financial Instruments with Characteristics of Equity – The International Accounting Standards Board has recently published Discussion Paper DP/2018/1 Financial Instruments with Characteristics of Equity. Submissions to the IASB were due by 7 January 2019.   More...

AASB: Exposure Draft: ED 292 Amendments to AASB 17 
ED 292 proposes targeted amendments to AASB 17 Insurance Contracts relating to the following topics: scope exclusions—credit card contracts and loan contracts that meet the definition of an insurance contract. The Exposure Draft also proposes to defer the effective date of AASB 17 by one year to annual reporting periods beginning on or after 1 January 2022, as well as extending the AASB 9 Financial Instruments temporary exemption in AASB 4 Insurance Contracts by one year. Comments to the AASB are due by 30 August 2019, click here for further information.

ASIC consultation: foreign financial services providers relief proposals
CP 301 sets out a proposal to enable foreign providers to apply for a modified form of Australian financial services (AFS) licence (foreign AFS licence). This follows ASIC’s review of the regulatory settings behind our foreign providers relief. The current foreign provider licensing relief were due to sunset on 27 September 2018, will be  extended until 30 September 2019 while we consult with stakeholders.

ASIC CP 300 Approval and oversight of compliance schemes for financial advisers
The proposals in CP 300 Approval and oversight of compliance schemes for financial advisers are outline here. We intend to release a regulatory guide setting out our final policy by the end of September 2019. 

FPA Submissions
ASIC – CP313: Product Intervention Power
ASIC - 7 August 2019
Genuine redundancy and early retirement scheme payments
Treasury - 29 July 2019

Current AFCA Matters – July 2019
Digital Rebl Pty Ltd and Media Rebl Pty Ltd
Forex Capital Trading Pty Ltd
AGM Markets Pty Ltd
Berndale Capital Securities Pty Ltd
Bestjet Travel Pty Ltd (Bestjet)
Viewble Media and The Shoppers Network

Gazette - Superannuation Industry (Supervision) Act 1993

Notice of Disqualification – Matthew Albert Lynch

Notice of Disqualification - Michael Teys; Rodney Stribley; Kitisoni Kiteau; Ilamiana Okusitino; Falanisesi Okusitino

Notice of Disqualification – Siaosi Walter; Laumanu Walter; Eugene Assan; Sitaleki Mafi Tuionetoa; Siaki Fekitoa; Lusia Kiteau

Notice of Disqualification – Julie Bicknell; Shane Bicknell

Notice of Disqualification - Andrew Vallner; Tu Toan Tran;

Notice of Disqualification - Michael Gilbert


Wang v Australian Securities and Investments Commission [2019] FCA 1178
CORPORATIONS – where delegate of the respondent permanently banned appellant from providing  financial services  – where Administrative Appeals Tribunal affirmed decision of the delegate – where Tribunal found that appellant was dishonest and engaged in misleading conduct in communications with third party – whether Tribunal erred in finding that the appellant was not a person of good fame or character – whether Tribunal’s exercise of discretion to affirm banning order was legally unreasonable – whether Tribunal erred in failing to find that the appellant’s conduct was in relation to a financial product or  financial service  – consideration of s 1041H of the Corporations Act 2001 (Cth) – held: appeal dismissed.

Fitzmaurice and Commissioner of Taxation (Taxation) [2019] AATA 2217
TAXATION –  superannuation  – Self-managed Super Fund – contravention of statutory imposed obligations by the responsible officer of the body corporate – lending money to members – breach of “sole purpose” test – early release of benefits – financial hardship – late lodgement and failure to lodge annual returns – failure to maintain investments at “arm’s length” – failing to keep up-to-date market valuation of the major asset of the fund – failure to keep records –  Superannuation Industry (Supervision) Act 1993  (Cth), ss 31, 35AE, 35B, 35C, 35D, 62, 65, 103, 104, 105, 109, and 126A – Decision affirmed. 

Binqld Finances Pty Ltd (In Liq) v Israel Discount Bank Limited; In the Matter of Binqld Finances Pty Ltd (In Liq) [2019] FCA 1186
TAXATION – meaning of “protected information” in s 355-30 of Sch 1 to the Taxation Administration Act 1953 (Cth) – whether information in a settlement deed with the Australia Taxation Office is “protected information” – whether disclosure of information would be an offence under s 355-155 of Sch 1 to the Taxation Administration Act 1953 (Cth) – whether the exceptions in s 355-175 and/or s 355-205 of Sch 1 to the Taxation Administration Act 1953 (Cth) engaged or applicable – whether disclosure of “protected information” “necessary” to give effect to a provision of taxation law – whether entire deed “protected information” – whether disclosure of non-protected information in an ATO settlement deed would contravene s 355-155 of Sch 1 to the Taxation Administration Act 1953 (Cth)
PRACTICE AND PROCEDURE – application for suppression orders in relation to a settlement deed – whether power under s 37AF of the Federal Court of Australia Act 1976 (Cth) should be exercised – whether sufficient grounds established under s 37AG(1) of the Federal Court of Australia Act 1976 (Cth) – whether grounds specified in accordance with s 37AG(2) of the Federal Court of Australia Act 1976 (Cth) – whether necessary to prevent prejudice to the proper administration of justice – whether the risk of exposure to cross-claims a sufficient reason to suppress – whether disclosure of personal information a sufficient reason to suppress. 

Deputy Commissioner of Taxation v Lee; Deputy Commissioner of Taxation v Silverbrook (No. 2) [2019] NSWSC 954
TAXES AND DUTIES – proceedings for recovery against defendants under Taxation Administration Act 1953 (Cth) – defendants directors of a company – company had failed to pay withholding tax, estimates in relation to amounts withheld and  superannuation  guarantee charges – director penalty notices issued to defendants in relation to all three tax liabilities – evidence certificates provided by the plaintiff disclosed that the defendants did not pay the amounts for which the company was liable – whether the defendants had a defence to the plaintiff’s claim – several defences relied upon by the defendants unavailable in recovery proceedings – only available defence was the ‘all reasonable steps’ defence – s 269-35 of Sch 1 of the Taxation Administration Act – whether the defendants took all reasonable steps – where the company went into voluntary liquidation – liquidation occurred outside the time allowed in s 269-30 of Sch 1 – liquidation cannot be relied upon by the defendants as evidence of steps taken – where the evidence relied upon by the defendants in support of this defence was largely in inadmissible form – conclusions, statements of belief and statements of intention – evidence contained unsubstantiated references to the defendants seeking external professional advice – evidence referred to the establishment of trusts – evidence highlighted the inadequacy of the company’s tax compliance framework – insufficient proof of all reasonable steps – defence not made out – plaintiff entitled to judgment
Superannuation Guarantee (Administration) Act 1992 (Cth) ss 33, 36.

In the matter of BBY Limited (receivers and managers appointed) (in liquidation) [2019] NSWSC 998
CORPORATIONS – winding up – conduct of liquidation – costs, charges and expenses – orders made by the Court for various classes of assets to share costs of recovering further assets – where this regime impracticable because of illiquidity of one class of assets – liquidators wish to retreat to interim regime to progress liquidation – where ultimate effect unchanged – Orders appropriate but for failure to serve all interested parties – orders for service made.
BBY was the operating company of a group of companies referred to as the BBY Group which provided a range of  financial services  including stockbroking, dealing in financial products, asset management, financial management and research.




Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019
House of Representatives Second reading moved 01 August 2019
Implements a recommendation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by amending the Corporations Act 2001 to: remove grandfathering arrangements for conflicted remuneration and other banned remuneration from 1 January 2021; and enable regulations to provide for a scheme under which amounts that would otherwise have been paid as conflicted remuneration are rebated to affected customers.

Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019
Senate Second reading moved 01 August 2019
Amends the Superannuation Guarantee (Administration) Act 1992 to ensure that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee contributions

Treasury Laws Amendment (Consumer Data Right) Bill 2019
Finally passed both Houses 01 August 2019 - Amends the Competition and Consumer Act 2010, Australian Information Commissioner Act 2010 and Privacy Act 1988 to create the Consumer Data Right to provide individuals and businesses with a right to access specified data in relation to them held by businesses. 


Treasury Laws Amendment (Deferring Extension of SuperStream to Self Managed Superannuation Funds) Regulations 2019
09/08/2019 – These regulations amend the Superannuation Industry (Supervision) Regulations 1994 to defer the start date for extending the operation of SuperStream to self managed superannuation funds from 30 November 2019 to 31 March 2021.


Subordinate legislation as made – 09 August 2019
No 146 Financial Accountability Regulation 2019
Accountable officers for particular entities and Nomination as chief finance officer or head of internal audit

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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