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Inside track: Superannuation, Funds Management & Financial Services

09 March 2021

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

Shameful ASIC fee increase warrants immediate review
Five of Australia’s largest financial advice industry associations have condemned an increase in financial adviser licence fees as “shameful” and called for an immediate review of the ASIC industry funding model (05 March 2021).  More...

Dover Financial Advisers to pay $1.2 million penalty and its sole director to pay $240,000 penalty for false or misleading conduct
The Federal Court has ordered that Dover Financial Advisers Pty Ltd (Dover) pay a $1.2 million penalty for engaging in false or misleading conduct, and that Terrence (Terry) McMaster, Dover’s sole director, pay a $240,000 penalty for being knowingly concerned in Dover’s conduct (05 March 2021).  More...

Increasing SG would stem growing inequality
The Government’s proposal to reduce the penalty for late SG payments has been welcomed by accountants who say will help small businesses.  Going through with the legislated superannuation guarantee (SG) increase over the next five financial years is a good step in stemming the growing inequality in the country, according to Rice Warner (04 March 2021)..  More...

Superannuation assets reach all time high in 2020
The Morrison Government welcomes the release of December quarter 2020 superannuation data by the APRA. The data shows our robust superannuation system reached an all-time high in 2020 despite financial volatility caused by COVID-19 (2 March 2021).  More...

ASFA welcomes super reforms
The Association of Superannuation Funds of Australia (ASFA) has welcomed the Reuniting More Superannuation Bill as it improves efficiency and more super being reunited with members (2 March 2021).  More...

ASIC commences civil penalty proceedings against REST for misleading and deceptive representations to members
ASIC has commenced civil penalty proceedings in the Federal Court against Retail Employees Superannuation Pty Ltd (REST)(02 March 2021).  More...

ASIC commences civil penalty proceedings against CommSec and AUSIEX for systemic compliance failures
ASIC has commenced civil penalty proceedings in the Federal Court against Commonwealth Securities Limited (CommSec) and Australian Investment Exchange Limited (AUSIEX) for alleged breaches of the Market Integrity Rules, Corporations Act and ASIC Act (CommSec only) relating to systemic compliance failures in the delivery of financial services (01 March 2021).  More...

Don’t blame and name us for others’ actions say super funds
Complaints lodged because of financial advice or insurance provided by superannuation funds should not necessarily be regarded as the responsibility of the superannuation funds themselves, according to a submission lodged with the ASIC (26 February 2021).  More...

Industry, consumer body back new super laws
A superannuation industry body and a consumer advocate have shown support for the passage of two bills related to superannuation. Under the legislation, advisers will need to obtain written consent prior to deducting fees, and other  legislation will facilitate the exit of all ERFs from the market by early 2022, by removing the large numbers of duplicate super accounts from the system (26 February 2021).  More...

Reuniting Australians with more lost superannuation
The Treasury Laws Amendment (Reuniting More Superannuation) Act 2021 requires that accounts transferred from Eligible Rollover Funds to the ATO will, where possible, be proactively reunited with a member’s superannuation account, or directly with the individual where eligible, within 28 days. This will remove large numbers of duplicate superannuation accounts from the system (25 February 2021).  More...

Financial sector cannot ignore modern slavery: KPMG
As the reporting deadline for the Modern Slavery Act creeps closer, KPMG and the Australian Human Rights Commission have warned that after the royal commission, banks and super funds cannot afford to risk public trust (24 February 2021).  More...

ASIC will offer immunity to financial criminals
ASIC will now consider extending immunity to serious financial criminals if they assist it in its investigations and enforcement actions. The immunity policy enhances ASIC’s ability to identify and take enforcement action against complex markets and financial services contraventions,” according to ASIC (24 February 2021).  More...

Commissioner appointed to ALRC Financial Services Legislation Inquiry
The Australian Law Reform Commission (ALRC) has welcomed the appointment by the Commonwealth Attorney-General, the Hon Christian Porter MP, and  Hon Justice Craig Colvin as a part-time Commissioner for the review of the legislative framework for corporations and financial services regulation (22 February 2021). More...

In practice and courts

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 here.

Combatting modern slavery in the financial services industry
The Australian Human Rights Commission and KPMG Australia have launched a new, practical guide to support the financial services sector to respond effectively to these risks, using a human rights-based approach. Financial Services and Modern Slavery: Practical responses to managing risks to people is a guide to help the sector respond effectively to the Modern Slavery Act 2018 (Cth) and other global human rights reporting obligations (24 February 2021). 

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.

ATO alerts
04/03/2021 SuperStream Rollover v3
Supporting documentation to assist DSPs and APRA funds in implementing SuperStream Rollover v3

26/02/2021 Self-managed super funds: A statistical overview 2018-19
The self-managed super fund (SMSF) analysis and statistics annual overview 2018–19 includes key data on the Australian SMSF sector.

25/02/2021 Avoid Family Trust Distribution Tax by reviewing your elections
Regularly review family trust and interposed entity elections to avoid paying family trust distribution tax

25/02/2021 How we deal with non-compliance
Our main focus is encouraging SMSF trustees to comply with the super laws, but there are occasions when stronger responses are warranted

25/01/2021 Missed, underpaid or late super payments
If you missed the 28 January super guarantee due date, you need to lodge a superannuation guarantee charge statement by 1 March to avoid penalties

ASIC Papers open for public comment

Industry funding: 2019-20 Cost Recovery Implementation Statement
ASIC published the final 2019-20 Cost Recovery Implementation Statement (CRIS). The CRIS provides regulated entities with details of ASIC’s forecast regulatory costs and activities by industry and subsector. The final CRIS has been updated to include some of the feedback that arose during consultation on the draft document published in June 2020. ASIC has also published a summary of its actual regulatory costs and actual levies. Levy invoices will be issued shortly (04 March 2021).

ASIC regulatory documents

ASIC Corporations, Superannuation and Credit (Amendment) Instrument
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.  More...

APRA superannuation statistics for December 2020
The Australian Prudential Regulation Authority (APRA) has released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the December 2020 quarter (2 March 2021). More...

APRA consultation paper: Implementation of AASB 17 for insurance capital and reporting
The APRA consultation to update the insurance capital and reporting frameworks in recognition of the implementation of Australian Accounting Standards Board 17 Insurance Contracts (AASB 17). The consultation will close on 31 March 2021. The discussion paper is available on the APRA website here. Information regarding the regulatory responsibilities and approach of ASIC to AASB 17 implementation is available here.

Legislation

Commonwealth

Act compilation

Superannuation Industry (Supervision) Act 1993
02/03/2021 - Act No. 78 of 1993 as amended

Acts

Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021
05/03/2021 - Act No. 19 of 2021 as made

Bills

Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020
Senate Bill agreed to, subject to requests 25 Feb 2021; House of Representatives Consideration of Senate message; House made Senate requested amendments 25 Feb 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.

Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020
Assent Act no: 19 Year: 2021 02 March 2021
Amends the: Corporations Act 2001 to: require financial services providers that receive fees under an ongoing fee arrangement to: provide clients with a document each year which outlines the fees they will be charged and the services they will be entitled to in the following 12 months and which seeks annual renewal for all ongoing fee arrangements; and obtain written consent before fees under an ongoing fee arrangement can be deducted from a client’s account; require a financial services licensee or authorised representative to give a written disclosure of lack of independence where they are authorised to provide personal advice to a retail client; and make consequential amendments; and Superannuation Industry (Supervision) Act 1993 to: provide that a superannuation trustee can only charge advice fees to a member where certain conditions are satisfied; and remove a superannuation trustee’s ability to charge fees under an ongoing fee arrangement for financial product advice from MySuper products.

Regulations

ASIC Supervisory Cost Recovery Levy Amendment (Claims Handling and Settling Services Providers) Regulations 2021
22/02/2021 - These regulations amend the ASIC Supervisory Cost Recovery Levy Regulations 2017 to allow the Australian Securities and Investments Commission to recover costs from its regulation of activities undertaken by people who handle insurance claims. 72AA Claims handling and settling services providers
(a) leviable entity forms part of the claims handling and settling services providers sub‑sector in a financial year if: (a)  the entity holds, at any time in the financial year, an Australian financial services licence; and (b)  the licence authorises the holder to provide claims handling and settling services. 

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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