In the media

ASIC expands network of fintech cooperation agreements to Switzerland
ASIC – 27 October 2017 - On 18 October 2017, the Australian Securities and Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA) entered a new agreement to cooperate on innovation in the financial sector.  More...

SCT proving efficient in face of impending closure
MEDIA – 26 October 2017 - Even as the Federal Government seeks to wind down the Superannuation Complaints Tribunal (SCT) amid concerns about inefficiency and unnecessary expenditure, the tribunal’s annual report shows it has improved its effectiveness at responding to complaints.  More...

ASIC overhauls funds management guidance
ASIC – 26 October 2017 - The six new and updated regulatory guides have been developed in advance of the upcoming new Asia Region Funds Passport and corporate collective investment vehicle (CCIV) legislation, taking into account these new areas as well as bringing ASIC's funds management policy up to date across the board.  More...

Reform necessary to give shareholders a greater voice on ESG issues
ACSI – 26 October 2017 - The current framework for shareholder resolutions is flawed and needs reform.  That’s the conclusion reached by the Australian Council of Superannuation Investors (ACSI), based on new research published today.  More...   More...

APRA challenges union/employer board nominations
MEDIA – 26 October 2017 - The Australian Prudential Regulation Authority (APRA) has sent a clear signal to superannuation funds that it is unhappy with the manner in which some unions and employer bodies can nominate their officials to the boards of superannuation funds virtually without challenge.  More...

Trustees must raise bar on good governance: APRA
MEDIA – 26 October 2017 - Superannuation trustees must do more than comply with a code to improve governance practices, particularly when it comes to board appointments and composition, APRA deputy chair Helen Rowell said.  More...

SMSF members benefit from voluntary super contributions
SMSF ASSOCIATION – 24 October 2017 - The ability for all Australians to make tax-deductible voluntary superannuation contributions is benefiting many self-managed super fund (SMSF) members, says SMSF Association CEO John Maroney.  More...

Coalition pushes not-for-profit super funds to emulate ‘extraordinarily incompetent’ big bank board model
ISA – 23 October 2017 - The Coalition chair of the bank oversight committee has torpedoed the government’s campaign to make not-for-profit industry super funds more like the banks by delivering a withering assessment of the majority independent Commonwealth Bank board during hearings in Canberra.  More...

Long term performance of Industry Super Funds shows success of member-focused governance
ISA - 20 October 2017 - The latest independent data on the performance of Australia’s superannuation funds provides further evidence that the government’s proposed changes to not-for-profit super funds miss the mark.  More...

Government introduces BEAR legislation
MEDIA – 19 October 2017 - The federal Treasurer has formally tabled legislation introducing new rules and accountability measures for executives in the banking and financial services, with new bills outlined here.  More...

Government backs ASIC on product intervention
MEDIA – 16 October 2017 - The Government has been urged to ensure ASIC does not get to pocket the proceeds of its successful regulatory prosecutions to prevent the emergence of a ‘prosecutorial culture’. The Federal Government will support moves to hand new regulatory powers to the corporate regulator for product intervention.  More...

Published – articles, papers, reports

Shareholder Resolutions in Australia
ACSI: 26 October 2017
This report examines the framework for shareholder resolutions in Australia and overseas. We recommend the introduction of a non-binding shareholder resolution to give investors a greater voice when a company is resisting change.  More...

'Superannuation governance in 2017: What does good look like?' to the AIST Governance Ideas Exchange in Melbourne
APRA Helen Rowell’s speech, 25 October 2017
More...

Address to the AFA 2017 National Adviser Conference, Gold Coast
The Hon Kelly O’Dwyer MP, Speech, 13 October 2017
More...

In practice and courts

ASIC Cost Recovery Implementation Statement (CRIS)
The CRIS is part of ASIC's commitment to transparency under industry funding, which took effect on 1 July 2017. Regulated entities have been categorised into 48 subsectors across all corporate entities subject to the Corporations Act, auditors, insolvency practitioners, credit licensees, Australian financial service licensees and other regulated entities and individuals. 

FPA Submissions
Insurance in Superannuation Code of Practice
The Insurance in Superannuation Working Group – Project management office.  20 October 2017
Exposure Draft TPB Practice Note on outsourcing, offshoring and the Code of Professional Conduct  - Tax Practitioners Board – 12 October 2017

Current Senate Inquiries

Economics Legislation Committee
Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Bill 2017

Legal and Constitutional Affairs Legislation Committee
Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 [Provisions]

Cases

Service v Post Super Pty Ltd (ACN 064 225 841) (as Trustee of the Australia Post  Superannuation Scheme) & Independent Claims Management Pty Ltd [2017] VCC 1500
SUPERANNUATION: Claim for lump sum payment for Total and Permanent Disability – whether decision to refuse the plaintiff’s claim was unreasonable. Superannuation Industry (Supervision) Act 1993 (Cth). 
BREACH OF WARRANTY OF AUTHORITY - Cause of action – Belief of plaintiff in existence of authority - Inducement for plaintiff to enter into contract with third party- Whether loss caused by freight forwarder’s breach of warranty.
DAMAGES - Statutory - Competition and Consumer Act 2010 - Measure of damages - Identification of loss or damage required - Causation of loss or damage - Quantification of damage caused "by conduct of" person in breach of s 18.
DAMAGES - Common Law - Breach of warranty of authority - Measure of damages - Whether plaintiff entitled to contractual or court rate of interest.
The business of the plaintiff is the lending of money to local companies some of which have a Chinese background. The plaintiff required security from any borrower. The loan was for $2 million and security was to be two real property mortgages, a fixed and floating charge over the present and future property of ASSH, and charges over personal property owned by Mr Lee, Ms Yang and Mr Ba.

Park & Muller (liquidators of LM Investment Management Ltd) v Whyte No 3 [2017] QSC 230
CORPORATIONS – MANAGED INVESTMENTS – WINDING UP – where the second applicant was the responsible entity of a number of registered investment schemes – where the first applicants were appointed administrators and later liquidators of the second applicant – where the respondent was appointed by order to take responsibility for ensuring that the largest registered investment scheme was wound up in accordance with its constitution and the order – where the first applicants made claims for expenses for legal costs, assessors costs and insurance premiums incurred in the liquidation of the second applicant – whether the first applicants’ expenses were reasonably incurred and should be paid from the trust property of the registered investment scheme.
CORPORATIONS – MANAGED INVESTMENTS – WINDING UP – where the second applicant was the responsible entity of a number of registered investment schemes – where the first applicants were appointed administrators and later liquidators of the second applicant – where the respondent was appointed by order to take responsibility for ensuring that the largest registered investment scheme was wound up in accordance with its constitution and the order – where the first applicants made claims for indemnity for expenses for legal costs, assessors costs and insurance premiums incurred in the liquidation of the second applicant – where the respondent alleged that the second applicant’s claims for indemnity should be set off against a number of potential claims against the second respondent for breaches of trust or duty – where the first applicants argued they had a right of direct payment of the indemnity amounts from the trust property to which such a set off would not apply – whether any successful indemnity claims by the first applicants should be reduced by the amount claimed against the second applicant.
On 2 April 2015, ASIC suspended LMIM’s Australian Financial Services  Licence No 220281 for a period of 2 years. However, by Schedule A of the notice of suspension it was provided that for the provision of  financial services  which are reasonably necessary for or incidental to, inter alia, preserving the assets and affairs of, or the winding up of the FMIF, the licence continued in effect as though the suspension had not happened.

Bert v Red 5 Limited [2017] QCA 233
CORPORATIONS –  FINANCIAL SERVICES  AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the appellants were shareholders in the first respondent – where the respondent’s main asset was an open cut gold mine – where the Board of the company resolved to raise $15,000,000 for working capital and $10,000,000 for exploration – where the second respondent was the director of the first respondent – where the first appellant claimed that the second respondent told him that the capital was being raised for the purpose of exploration – where the first appellant claimed that the second respondent never told him that working capital was being raised – where the second respondent denied that he misled the first appellant as alleged – where the trial judge found the second respondent to be a more credible witness than the first appellant – whether the trial judge erred in accepting the second respondent’s evidence over the first appellant’s evidence.
CORPORATIONS – FINANCIAL SERVICES AND MARKETS – DISCLOSURE – where the appellants claim that the first respondent failed to disclose the significant presence of groundwater in the mine – whether the first respondent breached its disclosure obligations under s 674 of the Corporations Act.
CORPORATIONS –  FINANCIAL SERVICES  AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the first respondent initially stated that the pit dewatering process was complete and later stated that it was not complete – where the first respondent was aware that water levels had increased – whether the statements regarding pit dewatering were misleading or deceptive.

Legislation

Commonwealth

Bills

Superannuation (Excess Non-concessional Contributions Tax) Amendment (National Disability Insurance Scheme Funding) Bill 2017
House of Representatives Third reading agreed to 25/10/2017 - Part of a package of 11 bills to fund the Commonwealth’s contribution to the National Disability Insurance Scheme, the bill amends the Superannuation (Excess Non-concessional Contributions Tax) Act 2007 to increase from 47 per cent to 47.5 per cent the rate at which excess non-concessional contributions tax is payable on an individual’s excess non-concessional contributions.

Bankruptcy Amendment (Enterprise Incentives) Bill 2017
19/10/2017 - The Bill contains measures to implement significant reforms to Australia’s bankruptcy laws by reducing the default period of bankruptcy from three years to one year.  Other time periods associated with bankruptcy will also be reduced to one year. These include disclosure of bankrupt status when applying for credit, seeking permission for overseas travel and the attainment of certain licences and entering into certain professions.
The Bill also contains measures that extend income contribution obligations for discharged bankrupts for a minimum period of two years following discharge or, in the event that a bankruptcy is extended due to non-compliance, for five to eight year.


Contacts:

Melbourne

Chris Lovell, Chairman
T: +61 3 9321 9832
E: chris.lovell@holdingredlich.com

Paul Faure, Partner
T: 61 3 9321 9904
E: paul.faure@holdingredlich.com

Bill Glover, Partner 
T: 61 3 9321 9844
E: bill.glover@holdingredlich.com


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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