In the media
ASFA calls for public feedback on gig economy
MEDIA – 28 September 2017 - The gig economy will continue to challenge the effectiveness of the superannuation system, and stakeholders should be continuing having their say on issues raised relating to new policy development, according to the Association of Superannuation Funds of Australia (ASFA). More...
ASIC backs super funds paying for AFCA
MEDIA – 28 September 2017 - The Australian Securities and Investments Commission has backed super funds having to pay for use of the new Australian Financial Complaints Authority and has argued it might give rise to more effective conduct by trustees. More...
Expert advisory panel on whistleblower protections
TREASURY – 28 September 2017 - The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, has released the terms of reference for the Expert Advisory Panel on whistleblower protections and confirmed its members (28 September 2017). More...
FPA submits financial advice competition recommendations to Productivity Commission
FPA - 27 September 2017 - The Financial Planning Association of Australia (FPA) has submitted recommendations to the Productivity Commission’s inquiry into competition in the Australian financial system, designed to help enhance innovation, choice, efficiency and the quality of financial advice services for consumers. More...
ASIC remakes relief for financial counselling agencies providing advice or credit assistance
ASIC –27 September 2017 - ASIC has made two new instruments relating to financial counselling agencies to continue the relief provided by class orders that were due to expire ('sunset'). More...
Innovation in superannuation slowed by lack of retirement focus
FSC – 26 September 2017 - A new report by the FSC and Tailored Superannuation Solutions (TSS), ‘Innovation in Superannuation: Smart MySuper Defaults’, finds that significantly higher levels of retirement savings can be achieved through reconsidering the traditional design of MySuper products. More...
Flawed super disclosure rules a risk to consumers: Action needed to clean up ‘Fee-asco’
ISA - 26 September 2017 - New fee and cost disclosure rules set to take effect in less than a week, are fundamentally flawed, “creating risk” to investors and providing “substantial advantage” to some funds over others, an independent superannuation ratings agency confirms. More...
SCT still open for business
MEDIA – 26 September 2017 - The Superannuation Complaints Tribunal (SCT) has reinforced that it remains open for business and able to deal with superannuation-related complaints, notwithstanding the Government introducing the legislation underpinning the Australian Financial Complaints Authority (AFCA). More...
Draft Legislation – Banking Executive Accountability Regime
TREASURY - 22 September 2017 - The Turnbull Government is continuing to deliver on strengthening accountability in the banking system, today releasing exposure draft legislation for the Banking Executive Accountability Regime (BEAR). The draft legislation provides further clarity on the accountability obligations of banks and their directors and senior executives, and enhanced consequences for being in breach of these obligations. The exposure draft of the legislation is available on the Treasury website. More...
Regional banks urge inquiry to crack down on power of 'big four'
MEDIA – 22 September 2017 - Australia's regional banks are urging a Productivity Commission inquiry to tackle the growing market power and "too big to fail" nature of Australia's big four banks. More...
Australia grows to become Asia-Pacific’s second largest alternative finance market
TREASURY – 21 September 2017 - The Turnbull Government’s strong support for FinTech has helped Australia become the second largest alternative finance market in the Asia-Pacific, with US$610 million raised in 2016. A KPMG, Cambridge Centre for Alternative Finance and Australian Centre for Financial Studies report, shows Australia’s market grew more than 50 per cent over the last year. More...
ASFA call for unclaimed super savings repatriation – ATO should return funds
ASFA – 21 September 2017 - Australia’s peak superannuation body, the Association of Superannuation Funds of Australia (ASFA), is calling again for the Commonwealth Government to amend the law to enable the Commissioner of Taxation to reunite Australians with millions of dollars in unclaimed super. Unclaimed super has risen from $3.2 billion to $3.75 billion, with updated data released today by the ATO. More...
Super industry consultation: draft Insurance Code of Practice to improve outcomes for members
AIST – 20 September 2017 - A new draft Code - outlining a set of industry standards and new measures for all classes of insurance in superannuation, including life, total and permanent disability (TPD) and income protection - has been jointly developed over the past 10 months by the ISWG with input from insurers, super funds and legal and consumer groups, as well as other stakeholders. More...
Best lending standards 'might not be enough': RBA
MEDIA – 20 September 2017 The central bank has clarified its views on Australia’s high levels of household debt and warned that “even the best lending standards” won’t save the industry from an economic shock. More...
ASIC remakes ‘sunsetting’ class orders relating to mortgage offset accounts and factoring arrangements
ASIC – 19 September 2017 - ASIC has remade two class orders relating to mortgage offset accounts and factoring arrangements, which were due to expire (‘sunset’) on 1 October 2017. More...
Financial competition still exists, says APRA
MEDIA – 18 September 2017 - The high level of “concentration” within Australian financial services is not necessarily an impediment to competition, according to APRA). More...
Super reforms get SMSF Association tick of approval
SMSF Association - 18 September 2017 -The SMSF Association has thrown its weight behind the superannuation reforms introduced into the Parliament last week, believing they will improve accountability and member outcomes. More...
Wage freezes, penalty rate cuts slashing workers' super: report
MEDIA – 18 September 2017 - Superannuation funds could be drained by as much as $100 billion, with individual retirees losing as much as $270,000, as companies slash wages and force workers out of long-standing enterprise agreements to deliver better returns for shareholders, a union-commissioned report finds. More...
Australian super makes insurance opt-in for under-25s
MEDIA – 18 September 2017 - Australian Super is the first major fund to make insurance an opt-in choice for young people, responding to concerns that premiums are eroding their small account balances. More...
Published – articles, papers, reports
Innovation in Superannuation: Smart MySuper Defaults
Financial Services Council: 26 September 2017
A new report by the FSC and Tailored Superannuation Solutions (TSS) finds that significantly higher levels of retirement savings can be achieved through reconsidering the traditional design of MySuper products. More...
The Consequences of Wage Suppression for Australia’s Superannuation System
Jim Stanford, Ph.D, entre for Future Work at the Australia Institute: 18 September 2017
This report presents results from several quantitative simulations of the impact of wage suppression on superannuation entitlements of affected workers, their long-run retirement incomes, and corresponding fiscal effects on government. More...
In practice and courts
FSC Guidance Note No 35: Money Market Funds naming convention
This Guidance Note sets out features of two types of money market funds to demonstrate which funds are permitted to use the words ‘money market’, ‘cash’, ‘liquid’, ‘ready assets’ or similar terms, in their name (September 2017). More...
Senate Economics Legislation Inquiry into the Treasury Laws Amendment (Putting Consumers First — Establishment of the Australian Financial Complaints Authority) Bill 2017
The Credit and Investments Ombudsman (CIO) welcomes the opportunity to make a submission in relation to the Treasury Laws Amendment (Putting Consumers First — Establishment of the Australian Financial Complaints Authority) Bill 2017 (29 September 2017). More...
ASIC: Applications for crowd-funding licences open 29 September 2017
ASIC has released further details of its approach to the assessment of CSF intermediaries, and the information required for both new licence and variation applications seeking CSF service authorisation. ASIC has also released an update to ASIC Form 206 which can be used to convert an existing company so that it is eligible to use the new CSF regime. ASIC will now accept lodgement of ASIC Form 206 (12 September 2017). More...
CFR: Safe and Effective Competition in Cash Equity Settlement in Australia: Response to Consultation
A Response to Consultation by the Council of Financial Regulators - September 2017. More...
AFSA: Inspector-General Practice Directions
IGPD1: Independence of personal insolvency practitioners
Released June 2017; updated September 2017.
APRA consultation: Financial Claims Scheme data collection
APRA proposes to collect semi-annual Financial Claims Scheme (FCS) data and information relating to total deposit liabilities from all locally incorporated authorised deposit-taking institutions (ADIs). The draft reporting standard ARS 910.0 will be subject to an eight week public consultation and is available on the APRA website. Submissions close on 25 October 2017. More...
APRA Consultation: proposed revisions to its counterparty credit risk framework
APRA has released a consultation on proposed revisions to its counterparty credit risk framework for ADIs. The consultation package is available on APRA’s website.
APRA: Consultation on phased licensing for authorised deposit-taking institutions
APRA is reviewing its licensing approach for authorised deposit-taking institutions (ADIs). The discussion paper seeks views on the proposed amendments to introduce a phased approach to authorisation, designed to make it easier for applicants to navigate the ADI licensing process. Submissions close on 30 November 2017. More... (Discussion Paper) More...
APRA: FAQs for Capital Adequacy: Measurement of Capital
APRA has published updated FAQs for Capital Adequacy: Measurement of Capital (19 September 2017). More...
APRA has published its submission to the Productivity Commission’s Inquiry into Competition in the Australian Financial System (15 September 2017).
COBA’s Submission to the Productivity Commission Inquiry into Competition in the Australian Financial System (15 September 2017). More...
Reminder: Transition period for updated fee and cost disclosures
ASIC has extended the transition period for trustees of superannuation funds and responsible entities of managed funds and other managed investment schemes (issuers) to comply with updated fee and cost disclosure requirements in relation to product disclosure statements (PDSs), until 30 September 2017.
ASIC Enforcement Review Taskforce: consultation on ASIC’s power to ban senior officials in the financial sector
The Government has released the ASIC Enforcement Review Taskforce position paper titled ‘ASIC’s power to ban senior officials in the financial sector’. The position paper is available on the Treasury website. Interested stakeholders are invited to comment on the positions put forward by the Taskforce. Submissions for this consultation close 4 October 2017.
FCC Rules amended
A number of miscellaneous amendments have been made to the Federal Circuit Court Rules 2001. Those in Schedule 2 extend the time a response must be filed and served from 14 days to 28 days of service of the application to which it relates. This amendment commences on 2 November 2017 to ensure parties and practitioners have time to prepare for the change to the timeline. More...
In the matter of Inavas Pty Ltd  NSWSC 1312
Order made vesting superannuation interest in fund of which trustee was company since deregistered, including life policy proceeds held by ASIC, in trustee of new superannuation fund by way of rollover. CORPORATIONS – deregistration and reinstatement – vesting of property of deregistered corporation – superannuation entitlement – where trust property vested in Commonwealth – where vesting order under Trustee Act, s 70 available – held, superannuation entitlement vested in another compliant superannuation fund.
Director of Public Prosecutions (Cth) v Petroulias  NSWSC 1290
CRIMINAL ASSETS – superannuation order sought under the Crimes (Superannuation Benefits) Act 1989 (Cth) - whether leave under s 82(1) of the Bankruptcy Act 1989 (Cth) required to commence proceedings –whether offences answer the description of “corruption offences”.
Cantor Management Services P/L & Ors v Booth  SASCFC 122
SUPERANNUATION - PRIVATE SECTOR FUNDS - TRUSTEES - GENERALLY
SUPERANNUATION - BENEFITS – GENERALLY
The deceased was the single member of a self-managed superannuation fund (SMSF). The first appellant is the corporate trustee of the SMSF and the deceased’s brother is the sole director and shareholder of the corporate trustee pursuant to an enduring power of attorney executed by the deceased during his lifetime. The corporate trustee denies that it was served with a binding nomination executed by the deceased directing the trustee to pay his member benefits to his estate upon his death. The executor of the deceased’s estate instituted proceedings seeking a declaration that the trustee of the SMSF is to pay the member’s benefits to the deceased’s estate. The Judge at first instance found in favour of the executor. The appellants were granted permission to appeal to the Full Court. The findings of the Judge at first instance should be affirmed.
Hellessey v MetLife Insurance Limited  NSWSC 1284
INSURANCE — Life insurance — Whether second defendant validly rejected plaintiff’s claim — Whether plaintiff was totally and permanently disabled at the assessment date.
INSURANCE — Claims — Utmost good faith — Whether second defendant breached duty of utmost good faith — Whether second defendant ‘constructively denied’ the plaintiff’s claim.
Legislation Cited: The Trustee has at all material times been the trustee of the First State Superannuation Scheme Scheme), of which Ms Hellessey has been a member. Under the rules governing the Scheme, Ms Hellessey was entitled to a benefit if by reason of illness or injury she satisfied the definition of Total and Permanent Disablement (TPD).
The Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017
Finally passed both Houses 12/09/2017; Assent Act no: 112 Year: 2017 18/09/2017 - Amends the: Corporations Act 2001 to create a safe harbour for company directors from personal liability for insolvent trading if the company is undertaking a restructure outside formal insolvency; and Corporations Act 2001 and Payment Systems and Netting Act 1998 to make certain contractual rights unenforceable while a company is restructuring under certain formal insolvency processes.
Fair Work Amendment (Recovering Unpaid Superannuation) Bill 2017
Registered 11/09/2017; Introduced HR 11/09/2017
The Bill seeks to strengthen the operation of Australia’s superannuation system, specifically by: Including superannuation contributions within the National Employment Standards. This will enable the Fair Work Ombudsman to engage its authority in matters that relate to superannuation contributions, such as recovery of unpaid employer superannuation contributions; this would also provide employees with a direct legal avenue to recover unpaid superannuation.
Guidelines Relating to the Registration and Cancellation of a Registered Debt Agreement Administrator and Ineligibility of an Unregistered Debt Agreement Administrator
28/09/2017 - These guidelines provide information on the factors that will be considered by the Inspector-General in deciding whether to approve an application for registration as a debt agreement administrator; whether to cancel an existing registration; and whether to declare a person ineligible to act as a debt agreement administrator, under the Bankruptcy Act 1966.
PAYG Withholding Variation: Certain superannuation beneficiaries who have not quoted a tax file number
27/09/2017 - This instrument continues to ensure that amounts of non-assessable non-exempt income paid to a superannuation beneficiary are not subject to withholding when the payee has not quoted their tax file number. Without this variation, withholding would be required from these amounts when paid in conjunction with other assessable income.
Superannuation Industry (Supervision) Tax File Number approval No. 1 of 2017
26/09/2017 - This instrument approves the manner of quoting and requesting tax file numbers by superannuation beneficiaries, applicants to become superannuation beneficiaries, trustees of eligible superannuation entities and of regulated exempt public sector superannuation schemes.
ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792
22/09/2017 - This instrument continues the relief given in ASIC Class Order [CO 03/1063].
ASIC Credit (Financial Counselling Agencies) Instrument 2017/793
22/09/2017 - This instrument continues the relief given in ASIC Class Order [CO 11/926] and ASIC Credit (Financial Counselling Agencies) Instrument 2015/992.
ASIC Corporations (Financial Requirements for CSF Intermediaries) Instrument 2017/339
20/09/2017 - The instrument modifies Part 7.6 of the Corporations Act 2001 to provide for financial resource requirements specific to Australian Financial Services (AFS) licensees providing a crowd-funding service.
Chris Lovell, Chairman
T: +61 3 9321 9832
Paul Faure, Partner
T: 61 3 9321 9904
Bill Glover, Partner
T: 61 3 9321 9844
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.