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Inside track: Superannuation, Funds Management & Financial Services

29 June 2021

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

Better Advice Bill introduced into Parliament
TREASURY – 24 June 2021 – the Morrison Government is introducing further reforms to strengthen the financial advice sector and implement recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – the proposed the establishment of a single disciplinary body for financial advisers.  More...

Majority want inflation-protected income
MEDIA – 24 June 2021 Some 87 per cent of retirees want regular inflation-protection income, according to a survey from Mercer, and the Age Pension system isn’t currently built to support underwhelming retirement income plans.  More...

Super rise to super-size Australia’s retirement savings
ASFA – 23 June 2021 – the Association of Superannuation Funds of Australia has released new analysis of the impact on retirement balances of the July 1 increase in the Superannuation Guarantee to 10 per cent.  More...

Second performance review needed: ASFA
MEDIA – 22 June – 2021 – a second stage as part of the super test benchmark is needed to avoid relying on automation which could create issues similar to that of the Robodebt saga, according to the Association of Superannuation Funds of Australia (ASFA).  More...

Clarity needed on civil penalty exemptions for breach reporting
MEDIA – 21 June 2021 – the corporate watchdog needs to clarify which civil penalty provisions will be exempt from the new breach reporting requirements, according to the Association of Financial Advisers.  More...

Maximum SMSF members moves up to 6
MEDIA – 18 June 2021 – self-managed superannuation funds will be allowed to have up to six members and the SMSF Association has welcomed this change as it will provide additional flexibility and choice in the super system.  More...

Mixed industry reactions to YFYS bill passage
MEDIA – 18 June 2021 – while the Financial Services Council has welcomed the Senate passage of the Your Future, Your Super bill, Industry Super Australia and the Australian Institute of Superannuation Trustees believes the bill has stopped short.  More...

Superannuation reforms pass parliament – making your super work harder for you
TREASURY – 17 June 2021 – the Morrison Government has passed through the parliament landmark reforms to Australia’s superannuation system. These reforms will help ensure superannuation works in the best financial interests of all Australians by removing unnecessary waste, increasingly accountability and transparency, and providing more flexibility for families and individuals.  More...

Passage of Your Future Your Super legislation will create more harm than good
AIST - 17 June 2021 – the passage through Parliament of the Government’s Your Future Your Super legislation will cause more consumer harm than good and not deliver on its objectives, the Australian Institute of Superannuation Trustees (AIST) warned.  More...

AAT dismisses application for review of ASIC banning order
ASIC – 16 June 2021 – the Administrative Appeals Tribunal (AAT) has dismissed an application for review of ASIC’s decision to permanently ban former financial advisor, Mr Robert Hutchison, from providing financial services.  More...

Crackdown on financial services marketing: Kalkine companies pay $350,000 penalty
ACMA – 16 June 2021 – financial services research companies Kalkine and Kalkine Media have paid infringement notices of $251,400 and $100,800 respectively for breaches of Australia’s telemarketing and spam laws. This is the first significant enforcement action the ACMA has announced under its crackdown on unlawful marketing practices in the financial services sector.  More...

FPA to manage and deliver Government’s $1.5 million Women in Finance and Economics Scholarship Program
FPA – 15 June 2021 – following an open and competitive grant round, the FPA has been selected to manage and deliver a $1.5 million scholarship program for women in finance and economics, as part of the Women’s Leadership and Development Program.  More...

ASIC releases guidance on ongoing fee arrangements
ASIC – 15 June 2021 – ASIC has released an information sheet (INFO 256) on ongoing fee arrangements to provide greater clarity to financial advisers and advice licensees on their obligations when providing personal advice to retail clients.  More...

Relief for financial advisers to meet their ongoing fee disclosure obligations
As industry may have difficulties generating an accurate fee disclosure statement during the transition period of 1 July 2021 to 30 June 2022, new regulation will allow financial advisers to report an estimate of fees for the 60 days prior to the statement being issued (11 June 2021).  More...

Disclosure changes open door for ‘reckless behaviour’
MEDIA – 10 June 2021 – changes to disclosure measures under the Treasury Laws Amendment (2021 Measures No.1) Bill could be a “green light for more reckless behaviour”, according to the Australian Council of Superannuation Investors.  More...

In practice and courts

ASIC Corporations (Amendment) Instrument 2021/550

Extends existing licensing relief for public offer trustees to include all registrable superannuation entities to ensure that non-public offer trustees are regulated consistently with public offer trustees under the Corporations Act 2001: See 21-141MR Amended: Instrument 2016/378 (16 June 2021).

ASIC Corporations (COVID-19–Advice-related Relief) Instrument 2021/268
Extends until 15 October 2021 the relief measure that allows financial advisers to provide a record of advice rather than a statement of advice to existing clients requiring financial advice due to the impact of the COVID-19 pandemic: See 21-072MR and FAQs.

ASIC Consultations: CP 340 Breach reporting and related obligations
Comments closed 3 June 2021. This consultation paper sets out our proposals for providing guidance to Australian financial services licensees and Australian credit licensees (credit licensees) on the breach reporting obligation that applies from 1 October 2021. The obligations require these licensees to notify, investigate and remediate breaches of the law in certain circumstances.  More...

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 publishes additional FAQs and worked examples on the Superannuation Data Transformation Phase 1 reporting standards
Included are worked examples for reporting under SRS 550.0 Asset Allocation, SRS 705.0 Components of Net Return, SRS 705.1 Investment Performance and Objectives and SRS 706.0 Fees and Costs. APRA is releasing FAQs and worked examples to clarify reporting issues raised by RSE licensees and to help them meet their reporting obligations. he FAQs are available on the APRA website at: Frequently Asked Questions - Superannuation Data Transformation (18 June 2021).

APRA consultation on guidance in support of prudential standard on remuneration
The draft Prudential Practice Guide CPG 511 Remuneration sets out principles and examples of better practice to assist banks, insurers and superannuation licensees comply with prudential standard CPS 511 Remuneration, which will be finalised later this year. The closing date for submissions on the draft CPG 511 is 23 July 2021.
Copies of the draft CPG 511 and a consultation letter at: Consultation on remuneration requirements for all APRA-regulated entities.

Reminder: Exposure draft regulations underpinning Treasury Laws Amendment (Your Future, Your Super) Bill 2021
Under the Your Future, Your Super reforms, the Morrison Government is taking the next step in modernising and improving the superannuation system. The Your Future, Your Super package is scheduled to commence on 1 July 2021. Further information is available at the Treasury website.  More...

Cases

Rothnie and Australian Securities and Investments Commission (Taxation) [2021] AATA 1545
TAXATION AND COMMERCIAL – Australian Securities and Investments Commission – financial services provider – banning order under s 920A of the Corporations Act 2001 (Cth) – breach of banning order – failure to act in the best interest of clients – failure to provide appropriate advice – failure to prioritise clients’ interests – contravention of financial services laws. Corporations Act 2001 (Cth) – Financial Sector Reform (Hayne Royal Commission Response – Stronger Regulators (2019 Measures)) Act 2020 (Cth).

Legislation

Commonwealth

Bills

Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021
HR 24/06/2021 – Tax (financial) advisers will no longer be regulated by the Tax Practitioners Board but instead will be regulated only under the Corporations Act 2001. The Bill will also give the Minister the power to extend the cut‑off date for certain existing financial advisers to pass the exam. The Government will use the power to extend the cut‑off date to 30 September 2022 for advisers who have attempted the exam twice prior to 1 January 2022.

Financial Regulator Assessment Authority (Consequential Amendments and Transitional Provisions) Bill 2021
Senate 2nd reading 15/06/2021 – Introduced with the Financial Regulator Assessment Authority Bill 2021, the bill amends five Acts to make amendments consequential on the establishment of the Financial Regulator Assessment Authority.

Financial Regulator Assessment Authority Bill 2021
Senate 2nd reading 15/06/2021 – Introduced with the Financial Regulator Assessment Authority (Consequential Amendments and Transitional Provisions) Bill 2021, the bill: Establishes the Financial Regulatory Assessment Authority to assess and report on the effectiveness and capability of the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission; and prohibits the unauthorised use or disclosure of protected information provided to the Authority.

Treasury Laws Amendment (2021 Measures No. 4) Bill 2021
HR 3rd reading 17/06/2021 – Amendments to product intervention regime – to provide that ASIC is not prohibited from making a product intervention order that has conditions relating to fees, charges or other consideration paid or payable as remuneration by a retail client or consumer to a person, including the provider (or their associates) of a financial product or a credit product.

Regulations

Treasury Laws Amendment (Self Managed Superannuation Funds) Regulations 2021
25/06/2021 – this instrument amends relevant provisions in the Superannuation Industry (Supervision) Regulations 1994 that refer to self managed superannuation funds (SMSFs) and small superannuation funds (SSFs) to ensure the provisions accord with the increased member limits of SMSFs and SSFs provided by the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 (the Act).

Superannuation Legislation Amendment (Superannuation Drawdown) Regulations 2021
24/06/2021 – these regulations amend the Retirement Savings Accounts Regulations 1997 and the Superannuation Industry (Supervision) Regulations 1994 to extend the temporary reduction in minimum payment amounts for account based pensions, allocated pensions and market linked pensions (and for the equivalent annuity products) by half for the 2021-22 financial year.

Financial Sector (Collection of Data) (reporting standard) determination No. 24 of 2021
16/06/2021 – this instrument determines Reporting Standard RRS 710.0 ABS/RBA Audit Requirements for Registered Financial Corporations – EFS collection and revokes Financial Sector (Collection of Data) (reporting standard) determination No. 22 of 2019, including Reporting Standard RRS 710.0 ABS/RBA Audit Requirements for Registered Financial Corporations – EFS collection.

Anti-Money Laundering and Counter-Terrorism Financing Rules Amendment Instrument 2021 (No. 1)
15/06/2021 – this instrument amends the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) to set out the requirements of the expanded circumstances in which reporting entities may rely on identification procedures undertaken by a third party, and strengthen protections around correspondent banking. 

ASIC Credit (Mandatory Credit Reporting) Instrument 2021/541
15/06/2021 – this instrument determines certain kinds of accounts as not being eligible credit accounts for the purposes of section 133CO of the National Consumer Credit Protection Act 2009.

ASIC Corporations (Amendment) Instrument 2021/510
11/06/2021 – this instrument amends the ASIC Corporations (Repeal and Transitional) Instrument 2016/396, the ASIC Corporations (Foreign Financial Services Providers – Limited Connection) Instrument 2017/182 and the ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109 to preserve the effect of relief. It also amends the ASIC Corporations (Foreign Financial Services Providers–Funds Management Financial Services) Instrument 2020/199 to delay commencement.

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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