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Inside track: Superannuation, Funds Management & Financial Services

22 March 2021

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

Government needs to re-think flawed Your Future Your Super legislation
AIST – 18 March 2021 – The Government’s Your Future Your Super legislation – currently before Parliament – will not achieve its stated intent and should not proceed, the Australian Institute of Superannuation Trustees said.  More...

There is $13.8 billion in lost and unclaimed super. Could any of it be yours?
TREASURY – 18 March 2021 – Around $13.8 billion in Australians’ hard earned wages is waiting to be claimed, in the form of lost and unclaimed superannuation.  More...

Home buyer inequity to grow if super used for deposit
MEDIA – 16 March 2021 – Allowing first home buyers to access their superannuation for a home deposit would increase inequity between higher income home purchases and lower income purchasers, according to a report by the Association of Superannuation Funds of Australia.  More...

SFA calls for independent review into housing affordability, warns using super for housing deposits would make a bad situation catastrophic
ASFA – 12 March 2021 – Analysis released by the ASFA shows using super for housing would put significant upward pressure on house prices and exacerbate housing affordability concerns for low-income earners. ASFA CEO said using superannuation for housing deposits is fundamentally inconsistent with the objective of superannuation to provide an adequate retirement income.  More...

ASIC imposes licence conditions on derivatives issuer
MEDIA – 12 March 2021 – In a statement, ASIC said the new conditions had been placed on AxiCorp Financial Services' licence "to ensure that AxiCorp has adequate compliance arrangements in place for its over the counter derivatives business".  More...

APRA closes investigation into Westpac anti-money laundering breaches
APRA – 12 March 2021 – The APRA has closed its investigation into possible breaches of the Banking Act 1959 Banking Act or the BEAR. APRA remains determined to ensure Westpac rectifies its risk governance weaknesses effectively and sustainably.  More...

The super rate increase will power economic growth, job creation and wage rises
MEDIA – 12 Mar 2021 – Increasing the super guarantee to 12 per cent will lead to a bigger economy, more jobs, higher real wages, and higher real incomes, new independent research has found. It finds the billions available in extra capital will expand the economy, leading to a demand for more labour – which in turn fuels wage growth.  More...

ACIL Allen report: Economic impact of increasing the super guarantee rate
INDUSTRY SUPER – 12 March 2021 – This report examines the impact on the Australian economy of the legislated increase in the Super Guarantee Rate from 9.5 per cent to 12 per cent. Increasing the SG rate will lead to a bigger economy ($12 billion bigger in 2040) than will occur without the increase in the SG rate. It is the first study that comprehensively measures all the economic factors involved in the relationship between super and wages.  More...

A year on: 11,000 COVID-19 complaints, scams on the rise
AFCA – 10 March 2021 – The Australian Financial Complaints Authority (AFCA) is seeing a sharp rise in consumer complaints about scams, after receiving more than 11,000 complaints related to COVID-19 in the year leading up to the anniversary of the pandemic’s declaration.  More...

Insurance in super issues need addressing: APRA
MEDIA – 09 March 2021 – The APRA has again outlined its concerns regarding the sustainability of insurance in superannuation to life insurers and registrable super entity licensees given the significant recent deterioration in group life insurance claims experience.  More...

Two-stage process needed for super performance test
MEDIA – 9 March 2021 – ASIC has formally canvassed a ‘regulatory sandbox’ approach allowing fintech companies to test products without an AFSL. The superannuation performance test should be conducted in a two-stage approach and assessed by a panel of experienced industry professionals who are impartial, according to the chairs of major super funds.  More...

APRA urges life insurers and superannuation funds to address sustainability of insurance in superannuation
APRA – 9 March 2021 – The Australian Prudential Regulation Authority has written to life insurers and registrable superannuation entity licensees, urging them to address concerning trends and practices in the provision of insurance to superannuation members.  The letter to life insurers and superannuation funds is available on the APRA website at: Sustainability of Life Insurance in Superannuation.  More...

In practice and courts

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.

AUSTRAC: Proposed amendments to Chapters 3, 6, 7 and 10 of the AML/CTF Rules
AUSTRAC has released proposed amendments to the following chapters of the Anti-Money Laundering and Counter-Terrorism Financing Rules for public consultation: Chapter 3 – Correspondent banking; Chapter 6 – Customer identification and verification; Chapter 7 – Reliance on customer identification carried out by another reporting entity and Chapter 10 – Gambling services.
The proposed changes are to support reforms to the AML/CTF Act made by the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Act 2020 (Phase 1.5 reforms).
The consultation period for these amendments is 27 January 2021 until 11 March 2021.  More...

Review of the Australian Financial Complaints Authority
The Morrison Government has released a terms of reference for the review of the Australian Financial Complaints Authority (AFCA), and is seeking stakeholder feedback on its functions and performance. All interested parties are invited to lodge submissions through the Treasury website before consultation closes on 26 March 2021.Further information is available on the Treasury website.

APRA reminder: Superannuation licensees on upcoming legislative obligations
Registrable superannuation entity (RSE) licensees are reminded of 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 Letter to registrable superannuation entity licensees: Looking ahead - Focus on strategic planning and member outcomes.

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.

AIST submission: Consultation on APRA Prudential Standard SPS 250 Insurance in Superannuation
09 March 2021 – AIST acknowledges the further clarity and guidance APRA has provided in this iteration but calls on APRA to seek mandatory SuperStream insurance data fields to better promote member insurance interests. AIST also calls for further guidance on independent certification arrangements, timing, and process; and to clarify expectations for members leaving employer supported insurance arrangements.  More...

Cases

Australian Securities and Investments Commission v TAL Life Limited (No 2) [2021] FCA 193
CORPORATIONS – misleading or deceptive conduct –financial products – insurance – allegation that insurer had misled insured by making representations about insurer’s right to delay the processing of the insured’s claim and to withhold benefits under the policy until the insured provided an executed authority enabling the insurer to obtain and access the insured’s medical records and Medicare and Pharmaceutical Benefits Scheme claims information – whether representation was made – whether representation was false or misleading – whether representation contravened s 1041H(1) of the Corporations Act 2001 (Cth) – whether representation contravened ss 12DA(1) and 12BD(1) of the Australian Securities and Investments Commission Act 2001 (Cth) – whether conduct was in connection with the supply of financial services – whether conduct was in relation to financial services – meaning of “financial services” – whether representation was made in connection with the issue of the policy – whether the process of claims handling is a service otherwise supplied in relation to the policy
INSURANCE – whether insurer breached the duty of utmost good faith under s 13 of the Insurance Contracts Act 1984 (Cth) – where insured made an innocent non-disclosure and insurer avoided the policy – where insurer did not give the insured any notice of the investigation into the validity of her policy and did not give her an opportunity to address the insurer’s concerns – where insurer alleged in policy avoidance letter that insured had breached her duty of good faith – where insurer threatened in policy avoidance letter to seek recovery of amounts paid under the policy
HIGH COURT AND FEDERAL COURT – jurisdiction of the Federal Court – power to award declaratory relief – whether Australian Securities and Investments Commission lacks standing to seek declaratory relief for breach of s 13(2) of the Insurance Contracts Act 1984 (Cth)
CONSTITUTIONAL LAW – judicial power of the Commonwealth – requirement for a “matter” – whether there is a “matter” before the Court – where parties to insurance contract agreed in settlement deed that contract was avoided ab initio – whether ASIC lacks standing to seek declaratory relief for breach of s 13(2) of the Insurance.

Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd (No 3) [2021] FCA 170
CONSUMER LAW – pecuniary penalty for infringement of s 12DB(1)(i) of the Australian Securities and Investments Commission Act 2001 (Cth) – appropriate approach to assessment of civil penalty – whether a single penalty is required to be imposed for each contravening act – the circumstances in which an aggregate penalty may be ordered for multiple contraventions – relevance of contrition to deterrence – relevance of damage to health and reputation.

Legislation

Commonwealth

Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020
Finally passed both Houses 16 March 2021
Amends the: Retirement Savings Accounts Act 1997, Superannuation Industry (Supervision) Act 1993 and Superannuation (Unclaimed Money and Lost Members) Act 1999 to: Facilitate the closure of eligible rollover funds by 30 June 2021; and enable the Commissioner of Taxation to reunite amounts he or she receives from eligible rollover funds with a member's active account; and Income Tax Assessment Act 1997 and Taxation Administration Act 1953 to make consequential amendments.

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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