By Mark Bland, Partner, Stephen Putnins, Partner, Geoffrey McCarthy, Special Counsel and Vijay Adithya, 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.
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The terms of reference for the ‘Quality of Advice Review’ focus on streamlining of the process and providing simpler disclosure requirements and replacing ‘rules based’ regulation with ‘principles based regulation’. This is to address ‘fundamental harms’ and reduce the cost of compliance and indicates that the focus will be on making it easier to provide advice rather than improving its quality – despite the review’s name.
APRA’s explanation about its climate risk management survey demonstrates its intention provide participating entities with de-identified peer comparison results so as to enable them to understand how their approaches and practices compare to peers as well as to publish information on industry-level insights and themes from the results. APRA will also incorporate insights from the survey into its ongoing supervisory approaches to addressing the financial risks of climate change. Completion will therefore be very worthwhile for trustees.
The Government said it had a strong expectation that superannuation funds will take steps to divest any holdings in Russian assets, and APRA said it would not take action against trustees who seek to divest Russian assets in this context where trustees have considered such divestments in accordance with their duties. The Government’s statement says nothing about the requirement it recently had legislated to act in the best financial interests of members as distinct from the wider interests of members. It seems that the Government’s perspective is that some types of public interest such as deterring foreign invasions should be considered by trustees independently of the financial impact but not others such as attempting to minimise or mitigate climate change. APRA’s announcement on the other hand doesn’t let trustees of the hook for considering the best financial interests of members but seems intended to imply Trustees won’t have to justify a divestment decision.
The Regulations for changes to superannuation contribution rules have been made to allow concessional and non concessional contributions from persons from 67 to 74 without the work test applying are yet to be made. This may affect disclosures by Trustees.
1 March – Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022: submissions to the PJCIS review were due.
2 March – Superannuation Industry (Supervision) Self-Managed Superannuation Funds (COVID-19 Rental Income Deferrals – In-House Asset Exclusion) Determination 2022 was made under the Superannuation Industry (Supervision) Act 1993.
2 March – Australian Bureau of Statistics released statistics for the December 2021 quarter, on the assets and liabilities of financial institutions that pool funds for investment.
2 March – APRA released a cross-industry letter to advice on an upcoming climate risk self-assessment.
3 March- ASIC granted relief to allow additional time for certain companies and registered schemes to hold virtual-only meetings, under the ASIC Corporations (Virtual-only Meetings) Instrument 2022/129.
3 March – ASIC Chair delivers a speech regarding ASIC’s corporate governance priorities and the year ahead with focusses on ASIC’s digital transformation and industry’s cyber risk.
3 March – Treasury Laws Amendment (Enhancing Superannuation Outcomes) Regulations 2022 were made, reducing the eligibility age for downsizer contributions and removing the work test for certain contributions from persons 67 to 74 (and up to day 28 of the calendar month in which they turn 75).
3 March – Government urged super funds to divest holdings in Russian assets.
3 March – APRA advised that it will not be taking any action against trustees who seek to divest Russian assets where trustees have considered such divestments in accordance with their duties.
7 March – ASIC published REP 718 on CP 341 Review of ePayments Code.
7 March – APRA and ASIC issued a joint letter on the retirement income covenant.
8 March – ASIC announced sitting dates for financial adviser exams.
8 March – The ASIC Market Integrity Rules (Securities Markets) Determination 2022/134 was registered.
9 March – The ASIC Market Integrity Rules (Securities Markets) Amendment 2022/73 (Amendment) was registered.
10 March – The ASIC Market Integrity Rules (Securities Markets and other ASIC-Made Rules) Amendment Instrument 2022/117 was registered.
10 March – AFCA proposed new funding model for consultation.
11 March – The terms of reference of the Quality of Advice Review and reviewer announced.
11 March – Comments were due in relation to APRA’s discussion paper ‘Strengthening Financial Resilience in Superannuation’.
11 March – Submissions closed for consultation on SPS 310 proposed amendments relating to financial report and audit.
11 March – Consultations closed for 2022 Foreign Investment Reforms Discussion Paper.
15 March – ASIC publishes article urging entities to review its whistleblower policies.
15 March – Treasury opens consultation on Consumer Data Rights focussing on non bank lending with superannuation to come.
16 March – PJCIS public hearing into the second tranche of cyber laws.
17 March – APRA publishes updated data reporting FAQs.
17 March – ASIC released Consultation Paper 360 – ‘Corporate collective investment vehicles: Preparing for the commencement of the new regime’, seeking feedback by 14 April 2022.
17 March – RBA Bulletin issued including articles on COVID-19 and the securities and money markets.
17 March – ASIC publishes statement on ASX24 futures market outage.
17 March – Legislative Instrument Director Identification Number Laws (Application) Data Standard 2022 was registered.
18 March – House of Representatives Standing Committee on Economics published Report on implications of common ownership and capital concentration in Australia.
18 March – PMC issue an Issues Paper on Automated Decision Marking and AI Regulation.
21 March – ASIC published INFO 269 on discussing financial products and services online directed at influencers and licensee that use them.
28 March – Consultations for CP 359 Financial Services and Credit Panel due.
29, 30 and 31 March – Parliament to sit.
30 March – Senate Inquiry report due into unlawful underpayment of employees’ remuneration.
31 March – AML/CTF Inquiry Report from Senate Legal and Constitutional Affairs Committee due.
31 March – Portfolio Holdings must be disclosed.
31 March – AML/CTF Reporting entities’ compliance reports for 2021 due.
1 April – Amendments for meetings scheduled under Corporations Amendment (Meetings and Documents) Act 2022 take effect.