RegTracker 18 October 2021

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By Mark Bland, Partner, Stephen Putnins, Partner, Geoffrey McCarthy, Special Counsel, Donica Dieng, Lawyer and Ashley Kasner, Lawyer

This update is designed to help superannuation trustees track and manage regulatory change. We look ahead to forthcoming developments and look back at recent changes.

We have collaborated with Argos Reg-Tech to create Argos, an online platform where subscribers can find detailed analysis of regulatory reforms, updated on a daily basis. Contact us if you would like to learn how Argos can help your firm manage the risks of regulatory change.

Key developments

In enforcement news, ASIC commenced civil penalty proceedings against superannuation trustee, Diversa Trustees Limited (Diversa). Diversa’s business model relies on outsourcing to promoters and other third parties to manage its superannuation funds.  ASIC alleges that Diversa did not act efficiently, honestly and fairly because it failed to provide proper oversight of one such third party. ASIC also alleges for the same reasons that Diversa failed to take reasonable steps ensure that the third party (who ASIC argues was Diversa’s representative) complied with the financial services laws.  This case and any judgement arising out of it should be of keen interest to any superannuation trustee who relies heavily on outsourced service providers.  However it also relates to the oversight of payment of advice fees which has also been a focus of both ASIC and APRA.

ASIC issued a warning about compliance with whistleblowing requirements and issued updated information sheets relating to the distribution of superannuation products through employers.

APRA published about its pilot intended risk culture surveys including superannuation in Q2 2022.

Last week also saw the close of numerous consultations. Consultation closed for exposure drafts  of the Retirement Income Covenant bill, the Better Advice Bill regulations, and the ministerial determination of education and training standards. Consultation also closed for the occupational exclusions in default insurance for MySuper products.

Last week

11 October –  Public hearing was held in Standing Committee on Economics in relation to the Review of the Four Major Banks and other Financial Institutions concerning EISS Super

11 October – Public hearing was held on Inquiry into implication of common ownership and capital concentration by the House of Representatives Standing Committee on Economics.

11 October ASIC commenced proceedings against superannuation trustee Diversa Trustees Limited.

13 October – ASIC wrote to Australian CEOs and trustees asking them to review whistleblower policies.

13 October – ASIC registered instrument to extend some COVID-19 related advice relief.

14 October – Consultation closed for the Review of occupational exclusions in default insurance offered through MySuper products.

14 October Senate Economics Legislation Committee published report on Treasury Laws Amendment (2021 Measure No. 7) Bill 2021.

14 October – APRA releases its observations from its pilot survey regarding risk culture.

15 October – Consultation closed for exposure draft regarding the Retirement Income Covenant.

15 October – Consultation closed for exposure draft regulations for the Better Advice Bill.

15 October –  Consultation closed for exposure draft ministerial determination of educational and training standards.

15 October –  ASIC released its Annual Report for 2020-21.

15 October –  ASIC released updated information sheets for employers and trustees about the distribution of superannuation products. The information sheets touch on recent reforms including DDO, anti-hawking, the ‘stapling’ measure and influencing employers through inducements.

15 October – Treasury consulted on clarifying the treatment of trusts under insolvency law.

This week

18 October Treasury Laws Amendment (2021 Measures No. 7) Bill 2021 to be debated in the House of Representatives.

18 October Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021 to be debated in the Senate.

18 October – Investment Funds Legislation Amendment Bill 2021 to be debated in the House of Representatives. This bill seeks to streamline the operation of the Government’s investment funds.

For further information, please do not hesitate to contact us.

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