By Mark Bland, Partner, Stephen Putnins, Partner and Geoffrey McCarthy, Special Counsel

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.

Argos Breach Consult – we are excited to the announce the launch of this breach reporting consultation tool that helps financial firms navigate the labyrinth of assessing a breach for reportability. Please get in touch with us to find out more.

Key Developments

Much focus of industry will be on APRA’s Heatmaps, including in particular the performance of choice products and APRA’s continuing focus on securing the removal of underperforming products.

Last Friday the Government made regulations to remove the AFS licensing exemption for proxy advice services and added additional obligations including independence from its clients. Proxy Advisers will need an AFS licence by the improbable time of 7 February 2022.

The first interim report of the ALRC contains numerous recommendations. It has recommended some for the Government to implement prior to the final report.  The recommendations go beyond form to apparently propose significant changes to regulation.

Trustees should consider commenting on CPS 190 Financial Contingency Planning also taking into account the issues concerning limits on Trustee indemnity highlighted in APRA’s recent discussion paper.

The Government’s announcement of proposed terms of reference for the Review of Quality of Financial Advice, indicates the potential for major further change in regulation on financial advice with a focus on affordability and compliance costs.

Recent Developments

29 November – The Corporations Amendment (Meetings and Documents) Bill 2021 passed the House of Representatives. It is at second reading debate in the Senate and the Greens have given notice of amendments to be moved in committee.

29 November – The Financial Regulation Assessment Authority published a consultation paper for its focussed review of ASIC.30 November – The first Interim Report of the ALRC Review of the Legislative Framework for Corporations and Financial Services Regulation focusing on the use of definitions and concepts including examples from across the Corporations Act (and key related statutes) was published.

30 November – APRA registered CPS 511 Remuneration

1 December – The Investment Funds Legislation Amendment Bill 2021 was passed by the House of Representatives and has been introduced in the Senate.

1 December – ASIC published INFO 267 on limited advice with an example SoA.

1 December – Comments were due on consultation on FASEA Code Standard 3 amendments.

1 December –  The Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 passed Parliament with amendments. It includes provisions updating SISA for insolvency reforms

2 December – The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 was referred to the Senate Economics Legislation Committee for report by 3 February 2022.  It includes the retirement incomes covenant provisions.

2 December – APRA began consulting on CPS 190 Financial Contingency Planning and CPS 900 Resolution Planning to strengthen the preparedness of banks, insurers and superannuation trustees to respond to future financial crises. Comments are due by 29 April 2022.

2 December– APRA Executive Director of Superannuation Division, Suzanne Smith, delivered a speech to the 29th Annual Colloquium of Pensions and Retirement Research.

2 December – ABS published statistics on managed fund assets including superannuation.

2 December – Treasury consulted on miscellaneous amendments including regulations concerning commutation of capped defined benefit income streams.

2 December – RBA published its assessment on LCH’s SwapClear service.

3 December – APRA published additional FAQs on superannuation data transformation.

6 December  – Consultation closed on the Privacy Legislation Amendment (Enhancing Online Privacy and Other Measures) Bill 2021 which includes provisions that enhance the OAIC’s enforcement powers.

6 December – The Government launched a new Digital Directors Training Program, aimed at lifting the digital literacy of company directors.

6 December – ASIC published a report on cyber resilience assessments of financial markets firms.

6 December – The Government registered Corporations (Relevant Providers – Education and Training Standards) Determination 2021, effective from 1 January 2022.

7 December – Security Legislation Amendment (Critical Infrastructure) Act 2021 enacted, bringing potential security obligations to some large superannuation funds.

8 December – The RBA complete Central Bank Digital Currency Research Project.

8 December – Transforming Australia’s Payments System report released by the Treasurer, including responses to recommendations made by Select Committee on Australia as a Financial and Technology Centre.

8 December – Consultations closed on the ATO’s draft replacement standards relating to the Director Identification Number.

10 December – Submissions closed on exposure draft legislation to modernise business communications by improving the technological neutrality of Treasury portfolio laws.

10 December – Submissions closed on the Treasury consultation paper on clarifying the treatment of trusts under insolvency law.

10 December – ASIC completed a review on default income protection insurance and member outcomes in superannuation.

10 December – FASEA announced latest financial adviser examination results.

10 December  – APRA published amendments to SPS 310 Audit and Related Matters.

10 December  – ASIC announced it had signed a MoU with the Croatian Financial Services Supervisory Authority.

13 December – The Security of Critical Infrastructure (Definitions) Rules (LIN 21/039) 2021 instrument was registered, prescribing superannuation funds with more than $20 billion gross assets as critical infrastructure.

14 December – The Government released a draft Data Strategy presenting a whole-of-economy vision for data. Consultation on this Data Strategy ends on 30 June 2022.

14 December – APRA and ASIC published notes from Superannuation CEO Roundtable hosted in December 2021.

14 December – ASIC welcomed the new International Sustainability Standards Board and updated climate-related disclosure guidance in a media release.

15 December – The Treasury Laws Amendment (Measures for Consultation) Regulations 2021 addressed commutations of certain capped defined benefit incomes streams.

15 December – APRA and ASIC published their annual update on engagement between the two regulators.

15 December – The Government consulted on a Business eInvoicing Right (BER) with BER to bring cost savings to the parties involved in a transaction.

15 December – The Government commenced public consultation on the Exposure Draft Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022.

15 December – The Australian Taxation Office published the draft taxation determination TD 2021/D6 concerning payments that don’t meet payment standards for public comment.

15 December– APRA published annual statistics on individual superannuation funds and their trustees.

15 December – Comments were due on Miscellaneous amendments to Treasury portfolio laws 2022 including regulations affecting superannuation.

16 December – APRA published Heatmaps for MySuper and certain choice products and associated Insights, Technical and Methodology papers on the Choice Heatmap.

16 December – The Government published for comment Terms of Reference for the Review of the Quality of Financial Advice.

16 December – The Government published for comment a Policy Paper on Financial Adviser Educational Standards.

16 December – The Corporations (Fees) Regulations 2001 amended to support the amendments in the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021.

17 December – The Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 were registered.

17 December – APRA Board Member Margaret Cole’s remarks covering Heatmaps were published.

17 December – Final report released by Parliamentary Joint Standing Committee on Trade and Investment Growth.

Upcoming

1 January – Portfolio Holding Disclosure commences

1 January – Financial Services and Credit Panel given new powers

10 January – Comments due on Privacy Act Review consultation