By Mark Bland, Partner, Stephen Putnins, Partner, Matthew Farnsworth, Partner, Geoffrey McCarthy, Special Counsel, Sheridan Handley, Senior Associate, Emma Higgs, Senior Associate, Vijay Adithya, Lawyer, Amiinah Dulull, Lawyer and Jules Ionnidis, Lawyer.

Key developments

Late April saw two key developments. On 26 April 2023, APRA published its latest Choice Heatmap. This report includes 163 products, which account for almost 50% of the funds managed in the Choice accumulation sector, and a total of $292 billion in members’ benefits. According to the most recent Heatmap, one out of every five Choice investment options with an eight-year track record significantly lagged behind the heatmap benchmarks, which is an improvement from one out of every four options in the 2021 report.  APRA will be looking to significantly improve future figures by having poor products close down.

On 27 April 2023, ASIC published updates to Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees. In particular an indication is given about the extent of detail. Ongoing consultations with stakeholders are being conducted to address other problems with the reportable situations regime.

ASIC enforcement has continued to focus on alleged greenwashing, unfair contracts, misleading conduct and the design and distribution obligations.

On 9 May 2023, the Government released its Budget measures. These measures included confirming the requirement of employers to pay super at the same time as their salary and wages from 1 July 2026; funding for AUSTRAC to consult on modernising the AML/CTF regime and evaluate it against FATF global standards and funding for a sovereign green bond to support environmental and climate change programs.

Looking Back

26 April – Brett Gordon, a former financial adviser pled guilty to nine counts of fraud, amounting to $652,500.

26 April – APRA published its latest Choice Heatmap.

27 April – ASIC published updates to Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees.

27 April – the Parliamentary Budget Office published an explainer about taxes on superannuation in Australia.

28 April – The Prime Minister announced incentives for newly constructed build-to-rent properties by reducing withholding tax from eligible managed investment trusts.

28 April – AFCA announced that it had entered a memorandum of understanding with APRA.

28 April – Senate Education and Employment Legislation Committee has tabled its report on the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023.

28 April – The ASIC Corporations (Amendment) Instrument 2023/282 on internal dispute resolution was registered.

2 May – ASIC announced that it had issued an infringement notice to Future Super for greenwashing.

2 May – the Senate Economics Legislation Committee held a public hearing on the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023.

3 May – ASIC announced that it had issued Ord Minnett Limited Ltd issued with $888,000 infringement notice for market breaches.

3 May – ASIC released Report 762 Design and distribution obligations: Investment products.

3 May – Minister Jones addressed on climate related issues.

3 May – ASIC announced that Gabriel Govinda was sentenced to two and a half years of prison due to market manipulation.

3 May – The Government announces the appointment of a standalone Privacy Commissioner.

5 May – ASIC update to breach report form reflecting updates to RG 78 to become effective.

5 May – Treasury begins consultation on Treasury Laws Amendment (Measures for Consultation) Regulations 2023: Military superannuation benefits.

5 May – ASIC announced that it updated the implementation timeframe for IDR data reporting framework, with most of the remaining superannuation trustees included in the 2nd tranche of 31 August 2023.

5 May – The Australian National Registry of Emissions Units Rules 2023 (Cth) are registered covering characterisation as a financial product.

8 May – ASIC announced that a former Courtenay House contractor and promoter sentenced in relation to unlicensed financial services business.

8 May – The Australian Law Reform Commission released a background paper covering post-legislative scrutiny.

9 May – APRA published updates to the ‘Frequently Asked Questions – Superannuation Data Transformation’ page.

9 May – The Budget papers include a proposal to amend the NALI provisions to exempt large APRA funds from the NALI provisions for both general and specific expenses of the fund and for exempting expenditure that occurred prior to the 2018-19 income year.

9 May – Budget measures included a commitment to implement the reduced tax concessions for balances exceeding $3 million from the financial year commencing 1 July 2025.

9 May – Budget measures confirmed the requirement of employers to pay super at the same time as their salary and wages is to apply from 1 July 2026.

9 May – Budget measures include $5 million over 5 years from 2023-24 to “continue a superannuation consumer advocate to improve members’ outcomes, offset by an increase in the Superannuation Supervisory Levy administered by the Australian Prudential Regulation Authority.”

9 May – Budget measures indicate that the frequency of FRAA reviews will reduce from every two to every 5 years.

9 May – Budget measures include funding for AUSTRAC to consult on modernising the AML/CTF regime and evaluate it against FATF global standards.

9 May – In Budget measures the Government announced it is allocating $86.5 million to establish a National Anti-Scam Centre, boost ASIC’s work to disrupt investment scam websites, and establish Australia’s first SMS Sender ID Registry to prevent scammers imitating trusted brand names.

9 May – The Budget measures include a commitment to establish a public registry of beneficial ownership of companies and other legal vehicles, including trusts.

9 May – The Budget measures include funding for a sovereign green bond to support environmental and climate change programs, funding for ASIC to fight sustainable finance misconduct and a sustainable finance taxonomy.

9 May – The Budget measures included establishing an Anti-Slavery Commissioner.

9 May – The Budget measures will extend the clean building managed investment trust (MIT) withholding tax concession to data centres and warehouses.

10 May – The Senate was scheduled to debate Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022.

10 May – The Office of the Australian Information Commissioner and the New Zealand Office of the Privacy Commissioner commenced a joint investigation into Latitude group’s personal information handling practices.

10 May – APRA released findings on the review of amendments to the SGAA introduced by the Treasury Laws Amendment (Your Superannuation, Your Choice) Act 2020. APRA found no need for further amendment to the SGAA or any other Act as a result of that Act.

10 May – APRA released a report on claims trends and affordability of liability insurance in Australia, focusing on public and product liability, professional indemnity, and directors and officers insurance.

10 May – ASIC released  Report 763 ASIC’s Recent Greenwashing Interventions.

11 May – Consultation closed for the Proposed technical determination for combining MySuper product performance histories.

11 May – ASIC commenced civil proceedings in the Federal Court against HCF Life Insurance Company Pty Limited alleging that three types of insurance policies issued by it contain unfair contract terms and could mislead the public.

11 May – ASIC announces that the Commonwealth Director of Public Prosecutions has directly indicted Vaughan Bowen for insider trading.

12 May – Commonwealth Director of Public Prosecutions directly indicts Vaughan Bowen for insider trading.

17 May – APRA Deputy Chair Helen Rowell delivered a speech to the Governance and Risk Management Forum.

18 May – ASIC revoked eight interim stop orders issued against Saxo Capital Markets after it amended its TMDs.

18 May – APRA announced it had finalised CPS 900 Resolution Planning, CPG 900 and CPG 190.

18 May – Federal Court penalises MLC for misleading consumers.

19 May – Federal Court penalises AMP entities for not doing what is necessary to ensure that their financial services were provided efficiently, honestly and fairly.

19 May – Federal Court upheld AFCA’s decision in favour of the Trustee for a death benefit division by the Trustee because it was within the range of what was fair and reasonable in Tratter v Aware Super.

19 May – APRA announces changes to Superannuation Data Transformation phase 2 roadmap.

22 May – The Life Code Compliance Committee issued Version 2 of the Transition to Code 2.0 Guide.

22 May – ASIC bans former fund manager for naked short selling.

22 May – ATO makes Taxation Administration (Remedial Power – Work Test for Personal Superannuation Contributions) Determination 2023 on work test.

Looking Ahead

22 May – Comments due on AFCA Rules Changes.

23 May – Consultation on APRA’s draft RSE class exemption closes.

26 May – Senate Economics Legislation Committee due to report on Treasury Laws Amendment (2023 Measures No. 1) Bill 2023.