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Inside track: Superannuation, Funds Management & Financial Services

28 January 2020

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

ASIC permanently bans former NSW financial adviser Nicholas Ellis
ASIC has permanently banned former financial advisor Nicholas Ellis, of Valentine, NSW, from providing financial services and engaging in credit activities. In October 2019, Mr Ellis pleaded guilty to making false or misleading statements to obtain money from clients and fraudulent misappropriation of client funds (24 January 2020).   More... 

Hard deadline needed on comparable APRA super data
The Federal Government needs to adopt the June 2020 Productivity Commission (PC) recommendation for the Australian Prudential Regulation Authority (APRA) fixing superannuation data gaps, and stick to it, according to Super Consumers Australia (23 January 2020).    More... 

Financial ombudsman launches dedicated bushfire hotline
The Australian Financial Complaints Authority has today launched a support hotline to ensure priority service for those impacted by the devastating Australian bushfires (23 January 2020).   More... 

FSC: Your superannuation, your choice
The FSC is strongly supportive of the measures contained in the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 but submits that the Bill should be amended to ensure all workers have the benefit of choice as soon as possible (23 January 2020).   More... 

Government opens BEAR extension consultation
More than a year after it was recommended by Commissioner Kenneth Hayne, the government has taken steps to extend the Banking Executive Accountability regime to include super funds and other APRA-regulated entities (23 January 2020).   More... 

NAB trustees hit with class action for 'mismanaging' retirement savings
NAB's superannuation trustees have been hit with a new class action for allegedly ripping off more than 330,000 clients (22 January 2020).   More... 

AMP slammed for milking fees from customer compensation
Former customers and consumer rights groups slam AMP for repaying fees it charged for no service into new accounts people did not consent to being opened in their name (22 January 2020).  More... 

ASIC imposes additional licence conditions on HNW Planning
Following the broader surveillance, ASIC concluded that HNW did not have adequate monitoring and supervision processes in place to identify non-compliance by its authorised representatives or to ensure that they complied with the best interests duty and related obligations (21 January 2019).  More... 

ASIC continues investigation despite conviction
The Australian Securities and Investments Commission (ASIC) is continuing its investigations into the principal of CFS Private Wealth and Combined Financial Solutions Pty, Graeme Walter Miller despite the Federal Court winding up the business and restraining Miller from providing financial services for 25 years (21 January 2020).  More... 

ASFA: release the MARIA model to ensure RIR transparency
The Association of Superannuation Funds of Australia (ASFA) has reiterated its call for the Australian Treasury to make public the MARIA model at the heart of the Retirement Income Review (20 January 2020).  More... 

Industry Super slams ANU SG research
A new paper written by researchers Geoff Warren, Gaurav Khemka and Yifu Tang from the Australian National University’s College of Business and Economics, which has concluded there is no optimal superannuation guarantee across income levels (20 January 2020).   More... 

A 24-year-old council worker is taking on fossil fuels and his super fund in a world-first court case
A landmark trial in Australia could potentially change the way superannuation funds invest Australians' almost $3 trillion in retirement savings and pave the way for more climate-change-related litigation (17 January 2020).  More... 

APRA Super Data Transformation - Topic Paper 1
AIST – 17 January 2020 - AIST reaffirms support for the Super Data Transformation project covering the whole of the sector, makes constructive suggestions to streamline its effective implementation, and seeks ongoing engagement with APRA. More... 

AUSTRAC wraps up campaign targeting illegal money transfer dealers
Unregistered money transfer dealers represent a real threat to Australian communities as they are at high risk of being targeted by criminals to launder money to fund their activities. They also negatively impact the reputation of registered money transfer providers (16 January 2020).  More... 

ASIC imposes licence conditions on Kaz Capital
ASIC has imposed additional conditions on the Australian Financial Services licence of Kaz Capital Pty Ltd (Kaz). ASIC is concerned with the adequacy and effectiveness of Kaz’s compliance framework, including how it monitors its advisers and whether it meets its compliance obligations under the Corporations Act (16 January 2020).   More... 

FSC: making insurance claims handling a financial service
The FSC has gone on record in support of Recommendation 4.8 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The FSC has also requested that the proposed legislation does not capture people such as doctors, physiotherapists and accountants acting in their professional capacity by providing an expert opinion in claims matters (16 January 2020).   More... 

ASIC increases levy costs
The Australian Securities and Investment Commission has hiked the levies owed by superannuation trustees, up over 22% from what the regulator estimated in March 2019 (16 January 2020).  More... 

Financial advice the least of 20 bank class actions
Twenty class actions have been mounted against the major banks and are either still on foot or in the process of settlement. Importantly, while ANZ was facing seven actions, only four of those are in Australian jurisdiction and relate to just two issues (15 January 2020).  More... 

There's a 'systemic risk' in Australia's financial system the RBA doesn't know enough about
Australia's financial regulators have been navigating largely in the dark when assessing the risks shadow banking and fintech pose to financial stability, particularly in the property market, according to internal Reserve Bank documents (15 January 2020).   More... 

IOOF identifies 67 ‘high risk’ advisers
IOOF has confirmed that it has been late to the party on financial adviser client remediation but expect to begin the process early this year, having identified 67 advisers it regards as being “in the higher-risk category” (10 January 2020).  More... 

In practice and courts

Financial Accountability Regime (FAR) Consultation
Date 22 January 2020 - 14 February 2020
This paper outlines the Government’s proposed model to extend the Banking Executive Accountability Regime (BEAR) to all APRA regulated entities and seeks targeted feedback from stakeholders. You can submit responses to this consultation up until 14 February 2020. Interested parties are invited to comment on this consultation.  More... 

AASB: General Presentation and Disclosures –Proposals to improve the financial statements and the use of non-GAAP measures: Exposure Draft ED 298 General Presentation and Disclosure.
Affecting all entities, significant changes are proposed to the presentation and disclosure in financial statements by you are invited to provide your feedback on defining new subtotals, including ‘operating profit’, as well as requiring more rigorous disclosure of ‘management performance measures’, also known as ‘non-IFRS financial information’, in a single note to the audited financial statements. (23 January 2020).  More... 

APRA submission on Fintech and Regtech
The APRA has published its submission to the Senate Select Committee on Financial Technology and Regulatory Technology. The submission is available here (21 January 2020). 

Banking, Superannuation & Financial Services Royal Commission - Recommendation 7.1: establishment of a compensation scheme of last resort
The Coalition Government has released a discussion paper on establishing a Compensation Scheme of Last Resort. In its response, Restoring trust in Australia’s financial system, the Government agreed to take action on recommendation 7.1 and establish an industry-funded, forward-looking compensation scheme of last resort. The discussion paper is available here. Consultation closes on 7 February 2020.

AIST policy news - 16 January 2020
RIR forum | APRA assessment of Choice products | Super consumer advocacy body.  More... 

ASIC consultation: foreign financial services providers relief proposals
ASIC has extended to 31 March 2020 licensing relief for foreign financial services providers (FFSPs) to allow them to provide certain financial services to Australian wholesale clients without needing to hold an Australian financial services licence.   More... 

IFRS: Interest-rate benchmarks amendments
Amendments issued focus on the accounting effects of uncertainty in the period leading up to the reform. The amendments come into effect from 1 January 2020 but companies may choose to apply them earlier. Interest Rate Benchmark Reform, which amends IFRS 9, IAS 39 and IFRS 7. A project summary, providing further information about the Board’s work in relation to IBOR reform. 

IFRS Standards in 2020: consultations
The first major consultation document, already out for comment, proposes improving the way information is communicated in the financial statements, with a focus on financial performance. Exposure Draft General Presentation and Disclosures, which the Board published in December 2019 as part of its Primary Financial Statements project, is open for comment until 30 June 2020 (07 January 2020)

QAO: Are climate-related risks impacting on your financial statements?
Advice Published: 9 January 2020
Climate-related risks are an emerging area that may have a direct impact on entities’ financial statements. More... 

AASB: Amendments to not-for-profit lessees’ right-of-use assets arising under concessionary leases
AASB 16 Leases and AASB 1049 Whole of Government and General Government Sector Financial Reporting were amended in respect of not-for-profit lessees’ right-of-use assets arising under concessionary leases (19 December 2019).   More... 

Financial Adviser Standards and Ethics Authority
The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 established the Financial Adviser Standards and Ethics Authority (FASEA) in April 2017, to set the education, training and ethical standards of licensed financial advisers in Australia. The Code of Ethics has commenced on 1 January 2020, with all Financial Advisers required to adhere to the Code from that day onwards.  More... 

Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry: interim report
Note: This report covers policy related issues arising from the first four rounds of hearings. Additional topics, including superannuation and insurance, will be covered in the final report due by 1 February 2019. 

FSC Submissions
16/01/2020 FSC Submission - Exposure Draft: Extending the definition of a Significant Global Entity (SGE) pdf
10/01/2020 FSC Submission - Making insurance claims handling a financial service pdf

FPA Submissions
10/01/2020 to Treasury Making insurance claims handling a financial service

ATO: Opt out of super guarantee
From 1 January 2020, some workers with multiple employers can apply to opt out of receiving the super guarantee (SG) from some of their employers. The exemption certificate means the employer will not be liable for the super guarantee charge if they don't make SG contributions on your behalf for the quarters covered by the certificate.

APRA second consultation package on Superannuation Data Transformation 
The two topic papers released today form part of Phase 1 of the Superannuation Data Transformation (Breadth), which will address the most urgent gaps in APRA’s data collection, particularly for choice products and investment options: Topic Paper 2: Performance and Topic Paper 3: Member Accounts. Submissions on these proposals will close on 14 February 2020. The topic papers, together with the draft reporting standards are available at: Consultation on APRA's Superannuation Data Transformation (19 December 2019). 

APRA consultation:  proposed revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250) 
The proposed changes are aimed at improving superannuation member outcomes by helping trustees select the most appropriate policies for their members, and monitor their ongoing relationships with insurers. The consultation closes on 3 February 2020. The letter outlining the proposed revisions and the draft prudential standard are available at: Consultation on Prudential Standard SPS 250 Insurance in Superannuation.

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 2019External Link and Explanatory memorandum.

Gazette - Superannuation Industry (Supervision) Act 1993
Notice of Disqualification – Sadia Yusuf

Notice of disqualification - Marian Ham; David C Ham

Notice of Disqualification - Philip R Ham; Paul Linkenbagh

Notice of disqualification - Preston Cobb; Scott Vanderbyl; Emma Jones;  Matthew Jones


Australian Securities and Investments Commission v CFS Private Wealth Pty Ltd (No 2) [2019] FCA 24
CORPORATIONS – application by the Australian Securities and Investments Commission (ASIC) to wind up the three respondent companies on the just and equitable ground under s 461(1)(k) of the  Corporations Act 2001  (Cth) (the Act) – the relevant principles for such winding up orders – where one of those companies is deregistered, whether it should first be reinstated under s 601AH(2) of the Act – whether ASIC is an aggrieved person for the purposes of s 601AH(2) of the Act
CORPORATIONS – application by ASIC to permanently restrain the fourth respondent from providing financial services under s 1324(1)(e) of the Act and to disqualify him from managing corporations under s 206E(1) of the Act – where the fourth respondent was a financial advisor engaged in the investment of his clients’ superannuation savings – where ASIC’s investigations determined that the fourth respondent frequently misappropriated investor funds for personal purposes over a number of years – where the fourth respondent, as the director of the first respondent, failed to ensure that the first respondent lodged its annual financial statements on time or at all – the principles relevant to disqualification and restraint orders – the appropriate restraint and disqualification periods to be imposed. 

Warrington Management Pty Ltd v Kinglane Property Investments Pty Ltd [2020] WASCA 8
Restitution - Where appellant company (first appellant) claimed restitution for remuneration in respect of services allegedly provided to respondent at alleged request of respondent - Where appellant company claimed restitution on the basis of an oral agreement to provide services to respondent, or an oral agreement pursuant to which it was nominated to provide services to respondent, in accordance with a remuneration structure subsequently to be agreed, where services subsequently provided by appellant company but the intended agreement did not materialise - Where judge found that services were provided by an individual (second appellant) and not by appellant company - Whether judge erred in addressing the wrong question - Whether judge failed to consider evidence as a whole - Whether judge erred in concluding that appellant company had not established its claim for restitution - Whether judge's findings should in any event have led to judgment for the appellant company
The venture would involve property investment and development - The need to obtain an Australian Financial Services  Licence insofar as it was sought to promote investment in property syndicates. The prospect of John Cranston's company, Kingslane Securities Pty Ltd (Kingslane Securities), obtaining such a licence

Application by CPSU, the Community and Public Sector Union [2020] FWC 265
s.238 - Application for a scope order  – application dismissed.
[1] On 13 December 2018 the Community and Public Sector Union (CPSU – the Applicant) lodged an application with the Fair Work Commission (the Commission) under s.238 of the Fair Work Act 2009 (the Act) for a scope order. The application was made in circumstances where the CPSU had been bargaining with the Commonwealth  Superannuation  Corporation (CSC – the Respondent) for an enterprise agreement since late 2017 with the issue of scope yet to be resolved




ASIC Credit (Litigation Funding—Exclusion) Instrument 2020/37
21/01/2020 - This instrument provides relief to enable the temporary operation of a litigation funding arrangement, and a proof of debt funding arrangement, without compliance with the requirements of the National Consumer Credit Protection Act 2009 until 31 January 2023.

ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38
21/01/2020 - This instrument provides relief to enable the temporary operation on a litigation funding scheme, or a proof of debt funding scheme, that is funded by a conditional costs agreement, without compliance with the requirements of the Corporations Act 2001, until 31 January 2023.

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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Chris Lovell

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