08 April 2019
Taking action on the Banking, Superannuation & Financial Services Royal Commission
The Coalition Government is providing expanded access to redress for consumers and small businesses harmed by financial misconduct, as we continue to take action on all 76 recommendations in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (06 April 2019). More...
Taking action on the Banking, Superannuation & Financial Services Royal Commission: Going further by expanding ASIC powers
The Coalition Government has passed legislation through the Parliament to introduce design and distribution obligations for all financial and credit products within the ASIC’s regulatory responsibility. The legislation will also allow ASIC to now intervene where there is actual, or the risk of, significant consumer detriment being caused by a financial product (04 April 2019). More...
ASIC imposes additional licence conditions on AMP Financial Planning
The conditions were imposed when ASIC granted AMPFP’s application to vary its AFS licence to provide managed discretionary account (MDA) services, and follows an ASIC surveillance of AMPFP’s MDA services and advice business (04 April 2019). More...
New superannuation powers to help APRA weed out underperforming funds
The Australian Prudential Regulation Authority (APRA) has welcomed the passage of legislation granting it stronger powers to take action against the trustees of underperforming superannuation funds (04 April 2019). More...
ASIC imposes additional licence conditions on SMSF Advisers Network
ASIC has imposed additional conditions by consent on the Australian financial services (AFS) licence of SMSF Advisers Network Pty Ltd (SAN). An ASIC review identified concerns including that some of SAN’s advisers had failed to demonstrate compliance with the best interest duty and related obligations (04 April 2019). More...
Passage of Super Bill to deliver host of benefits
The Financial Services Council (FSC) welcomes the passage of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 through Parliament. The changes in this Bill will help ensure superannuation funds remain squarely focused on achieving good retirement outcomes for their members (04 April 2019). More...
ASIC welcomes approval of new laws to protect financial service consumers
ASIC has welcomed the passage of key financial services reforms contained in the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation. This will require issuers to identify in advance the consumers for whom their products are appropriate, and direct distribution to that target market (04 April 2019). More...
FSC welcomes laws to protect consumers from poor products
The Financial Services Council has welcomed the passage of the Treasury Laws Amendment (Design and Distribution Obligation and Product Intervention Powers) Bill 2019. The changes mean financial services providers are now required by law to take a customer focused approach when offering products (04 April 2019). More...
ASIC super disclosure changes ‘reinforce’ fee opacity
ASIC’s latest proposed changes to superannuation fee disclosure have failed to provide transparency around fees and costs in super funds and managed investment schemes, according to Industry Super Australia. The body provided input on the regulator’s intended modifications to Regulatory Guide 97, saying the proposal does not fully address the complexity of fee disclosure, leaving consumers unable to make informed decisions based on cost comparisons (04 April 2019). More...
Members win in new laws to end super gravy train
After more than a year and half languishing before parliament, Australian workers will finally benefit from stronger laws designed to protect their retirement savings from being eroded by underperforming products and funds, Industry Super Australia says (04 April 2019). More...
FSC welcomes new board members
The Financial Services Council welcomes Alex Wade, CEO of AMP’s Australian Wealth Management, Andrew Tobin, CFO Challenger Limited and Jason Yetton, CEO of Commonwealth Bank’s NewCo as Directors to the FSC Board (04 April 2019). More...
Industry funds want relaxation of advice rules
Industry superannuation funds are better positioned than most to provide low cost financial advice to members in a post-Royal Commission world, according to industry funds groups the Australian Institute of Superannuation Trustees (AIST) and Industry Funds Services (IFS) ( 04 April 2019). More...
General advice should not be labelled advice at all, says FPA
Following the recent research from ASIC that found many consumers are confusing ‘general’ and ‘personal’ advice, the Financial Planning Association of Australia (FPA) is once again calling for the separation of financial advice from financial product marketing and product information (03 April 2019). More...
Proposed super fee disclosure changes still too confusing for consumers
Proposed changes to superannuation fee disclosure still don’t solve the problem, Industry Super Australia’s latest submission to ASIC warns. Industry Super Australia has provided input on ASIC’s proposed changes to Regulatory Guide 97 (RG97), which aims to improve transparency around how superannuation funds and managed investment schemes reveal their fees and costs to consumers (03 April 2019). More...
ASIC re-issues practical guidance for foreign financial services providers in Information Sheet 157
ASIC has re-issued Information Sheet 157 Foreign financial services providers – practical guidance (INFO 157) for foreign financial services providers (FFSPs) seeking to provide financial services only to wholesale clients in Australia (03 April 2019). More...
A balanced budget for all Australians, says FPA
FPA welcomes tax cuts for low to middle-income Australian households, more super flexibility, and post-Royal Commission clean-up funds The Financial Planning Association of Australia (FPA) welcomes measures to bring forward tax breaks for low and middle-income workers, introduce greater flexibility into the superannuation system, and an ongoing investment in reducing misconduct in financial services (02 April 2019). More...
The financial services council response to 2019 budget
The Financial Services Council (FSC) welcomes the confirmation that the Budget will return to surplus in 2019-20 after a lengthy period of deficits. The improving Budget position means the Budget can afford personal tax reductions, which will help address the growing tax burden, boost household incomes and help Australians create wealth (02 April 2019). More...
Modest changes to superannuation won’t help most Australians build their nest eggs
The changes to the rules for voluntary super contributions in the 2019 Federal Budget are good news for older members who can afford to make additional contributions to their superannuation savings, however they will have minimal impact on the retirement outcomes of most Australians (02 April 2019). More...
Coalition to scope superannuation consumer advocate options
The Morrison Government is continuing to put superannuation members first, announcing our intention to establish a superannuation consumer advocate and calling for expressions of interest. The complex and compulsory nature of superannuation means we need an independent consumer body with specialist knowledge (02 April 2019). More...
APRA begins consultation on Financial Sector (Shareholdings) Rules 2019
The Australian Prudential Regulation Authority (APRA) has begun a consultation on draft rules that give clarity to owners of new entrant financial sector companies on whether they are likely to be approved under the Financial Sector (Shareholdings) Act 1998 (FSSA) (02 April 2019). More...
Super boost: more flexibility for retirement
The Morrison Government is taking action to help Australians boost their retirement savings by giving them greater flexibility as they near their retirement years. From July 1 2020, Australians aged 65 and 66 will be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the Work Test (01 April 2019). More...
ASIC rejects criticism of new ‘mandate’
Chair of the corporate regulator, James Shipton, has addressed “push back” from ASIC’s “clear mandate” to use its new enforcement powers to monitor and penalise financial institutions for compliance breaches (29 March 2019). More...
Taking action on the Banking, Superannuation & Financial Services Royal Commission
Going further: Consultation on superannuation binding death benefit nominations & kinship structures The Coalition Government has released a discussion paper focusing on the difficulties that Aboriginal and Torres Strait Islander people face when making superannuation binding death benefit nominations (29 March 2019). More...
‘Mind the gap’ – consumers confusing different types of financial advice
The ASIC report, Financial advice: Mind the gap (REP 614), presents new independent research on consumer awareness and understanding of general and personal financial advice, identifying substantial gaps in consumer comprehension (28 March 2019). More...
Taking action on the Banking, Superannuation & Financial Services Royal Commission. Recommendation 4.13: Universal terms review
The merits of legislating universal key definitions, terms and exclusions for default insurance cover within MySuper products will be explored through a consultation paper, with the view to improve consumers’ understanding of insurance in superannuation (28 March 2019). More...
Underperforming funds under the microscope
APRA has released its expectations of superannuation licensees and its areas of focus for the year ahead and have highlighted underperforming fund as one area of focus. APRA had eight main areas of focus for the industry over the next twelve months which ranged from trustee board capabilities to data and remuneration (28 March 2019). More...
Moving super guarantee to 12 per cent is critical for retirement income adequacy
The Super Guarantee (SG) should be moved to 12 per cent as soon as possible, rather than from 2021, according to the Association of Superannuation Funds of Australia (ASFA). In the lead up to the Federal Election, ASFA has released a proposed toolkit for the Government, Strengthening Australia’s Superannuation System, to ensure the system continues to provide significant and material benefits (28 March 2019). More...
Super trustees back self-regulation on balance erosion
Most superannuation fund trustees and executives believe adherence to the insurance inside superannuation fund code of conduct should have been made compulsory (26 March 2019). More...
APRA puts heat on climate change
The APRA has announced it intends to increase its interest in the extent to which the Australian financial sector includes the risk of climate change in its activities. Reputational damage, flooding, regulatory changes and cyclones were nominated as the top climate-related financial risks (25 March 2019). More...
ASIC winds up managed investment schemes
The corporate regulator has confirmed orders from the Federal Court of Australia that Endeavour Securities and Linchpin Capital Group are in liquidation after both contravened multiple provisions of the Corporations Act (25 March 2019). More...
$35 million to extend the Federal Court’s jurisdiction to corporate crime
For the first time, the jurisdiction of the Federal Court of Australia will expand to include corporate crime, with the Coalition Government providing more than $35 million in the 2019-20 Budget to support this expansion. The expansion and funding will ensure that those who engage in financial sector criminal misconduct are prosecuted (23 March 2019). More...
FPA rolls out online diagnostic tool designed to help identify fintech solutions
The FPA announces the launch of a new online diagnostic tool designed to help identify fintech solutions that can improve the profitability and efficiency of financial planning practices (22 March 2019). More...
APRA consultation: The Financial Sector (Shareholdings) Rules 2019 (the Rules)
In particular, APRA has proposed Rules setting out the matters that must be considered in determining if a person is “fit and proper” for the purposes of the FSSA. The consultation period on the proposed Rules has now commenced, with APRA accepting submissions until 27 May 2019. Copies of the draft Rules and explanatory material are available here.
ASIC: Financial advice: Mind the gap report
The results highlight there is significant confusion among consumers, and within industry, media and Government about the definitions and roles of a qualified financial planner who provides personal advice, and institutions and non-qualified individuals who simply sell financial products (28 March 2019). More...
Consultation on AFCA rules changes
The AFCA is seeking submissions on proposed changes to its Rules which will expand its jurisdiction to deal with eligible complaints about conduct dating back to 1 January 2008. This expanded jurisdiction would operate for a period of 12 months from 1 July 2019. Submissions close on 12 April 2019. See further details here . More...
ASFA reminder: Recovering your unclaimed money
From the 27th June 2019 applications for unclaimed monies under s254 of the Bankruptcy Act can be made directly to Australian Financial Security Authority (AFSA) replacing the current Court application process. An application form and further information about the new process will be published closer to the commencement date. More...
ASFA research and papers 2019
March 2019 Strengthening Australia’s Superannuation System – ASFA’s proposed toolkit for the Government
29 Mar 2019 - Retirement Income Disclosure Consultation Paper
Description: AIST does not support the requirement to mandate CIPRs as a default retirement income product to members. AIST supports effective disclosure and continuing efforts to simplify and improve disclosure for members
22 Mar 2019 - Ending grandfathered conflicted remuneration for advisers
AIST supports this exposure draft legislation which will see the end of grandfathered conflicted remuneration on financial products.
CP308 – RG 97: Disclosing fees and cost in periodic statements and product disclosure
statements – ASIC 2 April 2019
Draft Relevant Providers Degrees, Qualifications and Courses Standard (Amendment No.1) Legislative Instrument
FASEA 1 April 2019
Ending Grandfathered Conflicted Remuneration for Financial Advisers
Treasury 22 March 2019
AFCA News, contains case studies, articles and information that is relevant to members and consumers.
Edition 1, 21 March 2019
AFCA current matters
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 - Stephen McKoy; Lisa McKoy
Notice of Disqualification – Branko Zanko
Notice of Disqualification – Laki Stewart; Sylvia Von Heiderbrandt; Merita Lealamanua; Tolotear Ah-Kin
Notice of Disqualification – Branko Zanco
Notice of Disqualification – Anna Glinatsis
Truan and Commonwealth Superannuation Corporation  AATA 555
SUPERANNUATION – beneficiary – commonwealth superannuation scheme – whether Widow entitled to spouse reversionary pension – marital or couple relationship – whether separation was due to special circumstances – whether marital relationship would exist but for deceased mental health issue of post-traumatic stress disorder (PTSD) – decision set aside and remitted.
Steidler and Australian Prudential Regulation Authority (Taxation)  AATA 601
PRUDENTIAL REGULATION – JURISDICTION – application for review of decision by APRA to issue notice of non-compliance – no decision confirming or varying decision to issue notice of non-compliance made – as beneficiaries of the trust, applicants not persons “affected” by APRA’s decision under the Superannuation Industry (Supervision) Act 1993 – no jurisdiction to review decision of which review sought – applications dismissed
Commissioner of Taxation  FCA 426
TAXATION – income tax – trusts – whether a trust is a “public trading trust ” pursuant to s 102R(1)(b) of the Income Tax Act 1936 (Cth) – whether trust is a public unit trust – application of s 102P(10) – whether the trust ’s “beneficial interest in property” of another trustee estate consists of the units of a unit trust – scope of “beneficial interest” necessary for s 102P(10) – whether trust is a “trading trust ” operations of a trading business – whether trustee not liable under s 99A because it was not entitled to the net income of a trust
TRUSTS – construction of trust deed – whether trust deed ambiguous – where trust deed identified “Second Absolute Beneficiary” as a named company “as trustee for” a specified superannuation fund – need to consider surrounding circumstances – whether named company or the trustee of the superannuation fund at the time the trust deed was made should be preferred
TRUSTS – rectification of trust deed – whether rectification available as an alternative to construction – where deed of rectification entered into – use that can be made of deed of rectification – whether order of rectification would be appropriate as an alternative to construction
Superannuation Industry (Supervision) Act 1993 (Cth); Taxation Administration Act 1953 (Cth) s 14ZZO, Pt IVC; Partnership Act 1891 (Qld) ss 5, 12; Inheritance Tax Act 1984 (UK) s 142;
Wainwright and Commissioner of Taxation (Taxation)  AATA 333
TAXATION – self managed superannuation fund – superannuation funds accessed before conditions of release met – superannuation funds used to meet personal expenses – benefits received not included in income tax return – whether benefits to be assessed in the year that they were received – administrative penalty and shortfall interest charges – whether Commissioner should have exercised his discretion to not include benefits in assessable income – unreasonable for the Commissioner to include a benefit in the Applicant’s assessable income – decision under review affirmed – decision under review set aside and substituted.
Treasury Laws Amendment (2019 Measures No. 1) Bill 2019
Finally passed both Houses 03 April 2019 - The bill amends the: Superannuation Industry (Supervision) Act 1993, Income Tax Assessment Act 1997 and Superannuation (Unclaimed Money and Lost Members) Act 1999 to: increase the maximum number of allowable members in self-managed superannuation funds (SMSFs) from four to six; align provisions that relate to SMSFs and small Australian Prudential Regulation Authority funds with the increased maximum number of members for SMSFs; and make contingent amendments to four Acts;
Treasury Laws Amendment (Design and Distribution Obligation and Product Intervention Powers) Bill 2019
Finally passed both Houses 03 April 2019 - The new law requires financial service providers to design and sell products with a target market in mind. While the vast majority of Australians benefit from quality products, this new regime offers an extra layer of protection
The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Bill 2019
Finally passed both Houses 04 April 2019 - Provides APRA with a broad and long sought-after directions power. It also gives APRA the power to take civil penalty action against trustees and their directors for breaching their obligations to members, including the duty to act in the best interests of members.
Superannuation (Unclaimed Money and Lost Members) Act 1999
04/04/2019 - Act No. 127 of 1999 as amended
ASIC (Fees—Complexity Criteria) Amendment Instrument 2019/130
27/03/2019 - This instrument amends ASIC (Fees - Complexity Criteria) Instrument 2018/578 to determine a 'fees for service' determination criteria for whether certain applications are of low, medium or high complexity.
Chris Lovell, Chairman
T: +61 3 9321 9832
Paul Faure, Partner
T: 61 3 9321 9904
Bill Glover, Partner
T: 61 3 9321 9844
Kylie Wilson, Partner
T: 61 7 3135 0514
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.