Policy & Research

Treasury releases draft regulations to require:

• trustees of SMSFs to consider insurance for their members as part of the fund’s investment strategy;
• money and other assets of an SMSF be kept separate from money and assets held by a trustee personally and by a standard employer-sponsor or an associate of a standard employer sponsor; and
• SMSFs to value the assets of the fund at net market value for reporting purposes.

The draft regulations are available on the StrongerSuper website here.

ASFA’s submission is available here.

The regulations as registered are available here.

Legislation enabling the SuperStream Levies were introduced into Parliament and immediately referred to the Parliamentary Joint Committee on Corporations and Financial Services.

See the Superannuation Supervisory Levy Imposition Amendment Bill 2012 here.
See the Superannuation Legislation Amendment (Stronger Super) Bill 2012 here.
ASFA’s submissions to the PJC is available here.

Draft Regulations exposed for comment.

See the FoFA website here.

Treasury releases a consultation paper on the SuperStream levies.

See the Treasury website here.

Comments closed 15 June 2012.

See ASFA's submission of 19 June 2012 here.

ASIC will release a series of consultation papers to support the implementation of FoFA. The topics to be included are:

• The best interest duty
• Scaled advice
• Conflicted remuneration
• ASIC powers
• FoFA anti-avoidance provisions

The Government has announced delayed starting dates for a number of SMSF reforms. Full details are available on the Stronger Super website here.

In summary the following implementation dates have been delayed:

• The introduction of a new range of administrative penalties (1 July 2013)
• Powers to require specific contraventions to be rectified (1 July 2013)
• Mandatory trustee education (1 July 2013)
• The acquisition and disposal of assets between SMSFs and related parties (1 July 2013)
• Criminal and civil sanctions to enable the ATO to penalise and discourage illegal early release scheme promoters (on Royal Assent)
• Amendments to existing tax laws so that amounts illegally released early are taxed at the superannuation non-complying tax rate (1 July 2013)

The Government releases exposure draft legislation on SMSF Auditor Registration.

Access the exposure draft on the Stronger Super website here.

Comments closed 3 August 2012.

Commencement date for the majority of the FoFA reforms, including the prospective ban on conflicted remuneration structures, adviser charging regime and statutory best interests duty. However, the Government announced a “soft regulatory” approach to the implementation of FoFA in the first 12 months.

See the Minister’s media release here.

First package of FoFA regulations Corporations Amendment Regulation 2012 (No. 4) is registered.

The Regulations are available here.

ASFA submission on the draft prudential standards lodged with APRA and is available here.

The Government releases the following:

Exposure Draft – Superannuation Fund Notification: Superannuation Legislation Amendment (Stronger Super and Other Measures) Bill (No. 2) 2012: Reporting to members

See Treasury website here.

See ASFA submission on 17 August here.

Exposure Draft – Intra fund consolidation of superannuation interests: Superannuation Legislation Amendment (Stronger Super and Other Measures) Bill (No. 2) 2012: Intra-fund consolidation of superannuation interests

See Treasury website here.

See ASFA submission on 24 August here.

Exposure Draft - Superannuation Data and Payment Standards: Enabling Services: Superannuation Legislation Amendment (Stronger Super and Other Measures) Bill (No. 2) 2012: Data standards tranche 2

See Treasury website here.

Comments closed 29 August 2012.

See ASFA submission on 29 August here.

ASIC releases consultation papers on aspects of FoFA.

CP 182 Future of Financial Advice: Best interests duty and related obligations is available here (pdf).

CP 183 Giving information, general advice and scaled advice is available here (pdf).

Closing date for comments 20 September 2012.

Second tranche of MySuper – Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 – passed by Parliament and awaits Royal Assent.

Access the second tranche here.

Exposure draft legislation released by Treasury regarding –

Administrative consequences and Penalties for Trustees of SMSFs
This measure will provide the Commissioner of Taxation (Commissioner) with additional tools and more flexibility to deal with non-compliance with the law. These new tools will be available in conjunction with the Commissioner's existing powers to regulate the SMSF sector.
See Treasury website here.

Penalties for Promoters of Illegal Early Release Schemes
This measure will deter promoters of illegal early release schemes from undermining the Government’s retirement policy and harming members in the process.
See Treasury website here.

Roll-overs to SMSFs
As part of this measure, roll-overs to SMSFs will be captured as a designated service under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
See Treasury website here.

ASFA's submission of 19 September 2012 on the draft legislation is available on the ASFA website here.

First tranche of MySuper – Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 – passed the House of Representatives with amendments successfully moved by the Government and the Greens.

Access the Government and Greens’ amendment and the supplementary memorandums here.

APRA's enhanced data collection consultation paper is released. The discussion paper outlines APRA’s proposed revised reporting requirements for APRA-regulated superannuation funds. The consultation package includes 31 draft reporting forms and instructions.

Comments are due 16 November 2012.

Access the APRA media release and discussion paper here.

To assist you to focus your comments and help ASFA in the compilation of our response it would be appreciated if your comments could address the matters in the order set in the paper titled CALL FOR COMMENTS: Draft APRA Reporting Standards.

Stronger Super

SuperStream

SMSF

Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 tabled in Parliament. The Bill –

• Provides CGT relief for funds that merge in response to the Stronger Super reforms
• Introduces a registration regime for SMSF auditors
• Expands the existing reporting obligation for superannuation providers
• Amends the SIS Act, and the Retirement Savings Accounts Act 1997, to improve the quality of information in the superannuation system and to facilitate fully effective e-commerce

ASIC released Consultation Paper 189 Future of Financial Advice: Conflicted remuneration

It outlines the ban on conflicted remuneration includes commissions and volume-based payments in relation to the distribution of and advice about retail investment products.

Treasury releases for consultation draft regulations for the provision of information to the Fund Details Register, Rollovers and Contributions.

The draft regulations are available on the Treasury website here.

A further tranche of FoFA regulations were registered. Corporations Amendment Regulation 2012 (No. 8) implements grandfathering arrangements for payments made by platform operators with respect to the ban on conflicted remuneration.

The legislative instruments that support the prudential standards were registered in November. The Superannuation (prudential standards) determinations and the supporting explanatory statements are available below:

1. Superannuation (prudential standard) determination No. 1 of 2012 - Prudential Standard SPS 114 - Operational Risk Financial Requirement. This instrument determines Prudential Standard SPS 114 Operational Risk Financial Requirement
2. Superannuation (prudential standard) determination No. 2 of 2012 - Prudential Standard SPS 220 - Risk Management. This instrument determines Prudential Standard SPS 220 Risk Management.
3. Superannuation (prudential standard) determination No. 3 of 2012 - Prudential Standard SPS 231 - Outsourcing. This instrument determines Prudential Standard SPS 231 Outsourcing.
4. Superannuation (prudential standard) determination No. 4 of 2012 - Prudential Standard SPS 232 - Business Continuity Management. This instrument determines Prudential Standard SPS 232 Business Continuity Management.
5. Superannuation (prudential standard) determination No. 5 of 2012 - Prudential Standard SPS 250 - Insurance in Superannuation. This instrument determines Prudential Standard SPS 250 Insurance in Superannuation
6. Superannuation (prudential standard) determination No. 6 of 2012 - Prudential Standard SPS 510 - Governance. This instrument determines Prudential Standard SPS 510 Governance.
7. Superannuation (prudential standard) determination No. 7 of 2012 - Prudential Standard SPS 521 - Conflicts of Interest. This instrument determines Prudential Standard SPS 521 Conflicts of Interest.
8. Superannuation (prudential standard) determination No. 8 of 2012 - Prudential Standard SPS 530 - Investment Governance. This instrument determines Prudential Standard SPS 530 Investment Governance.

Exposure Draft – Accountants' exemption replacement regulations

Under the proposed arrangements, accountants will be able to access a new form of limited licence from 1 July 2013 which will enable them to discuss a range of financial products with their clients. The range of products includes SMSFs, superannuation, securities, simple managed investment schemes, general insurance, life risk insurance and basic deposit products.

See ASFA's submission of 21 December 2012 here.

Income Tax Rates Amendment (Unlawful Payments from Regulated Superannuation Funds) Bill

Tabled in Parliament. The bill imposes the superannuation fund non-complying tax rate of 45% on those amounts that are released early from superannuation by illegal means.

Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Bill 2012

Tabled in Parliament. This bill introduces civil and criminal sanctions for a person who promotes a scheme that has resulted, or is likely to result, in the illegal early release of superannuation benefits.

MySuper Tranche 4 Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2012

Tabled in Parliament. The bill was subsequently referred to the PJC on Corporations and Financial Services – submissions due 17th January for report 4th February.

The bill:

• Overrides any provisions in a fund’s governing rules that stipulate that the trustee must use a specific service provider or only invest through in or through specified entities
• Provides powers to APRA to issue infringement notices as an alternative to criminal prosecution
• Provide a requirement on trustees to give reasons for decisions
• Provides more time for members and beneficiaries to lodge complaints with the SCT
• Enhances requirement for dual regulated entities
• Makes some amendments to Trance 2 re director liability

APRA releases draft prudential practice guides (PPGs). The draft PPGs are:

• Prudential Practice Guide SPG 114 Operational Risk Financial Requirement;
• Prudential Practice Guide SPG 220 Risk Management;
• Prudential Practice Guide SPG 231 Outsourcing;
• Prudential Practice Guide SPG 232 Business Continuity Management;
• Prudential Practice Guide SPG 250 Insurance in Superannuation;
• Prudential Practice Guide SPG 510 Governance;
• Prudential Practice Guide SPG 520 Fit and Proper;
• Prudential Practice Guide SPG 521 Conflicts of Interest;
• Prudential Practice Guide SPG 530 Investment Strategy – Formulation; and
• Prudential Practice Guide SPG 531 Investment Strategy – Implementation.

A second set of draft PPGs will be released for consultation in the second quarter of 2013.

The draft PPGs and the discussion paper are available on the APRA website here.

ASIC releases guidance for two aspects of the Future of Financial Advice (FOFA) reforms:

• Regulatory Guide 175 Licensing: Financial product advisers – conduct and disclosure
• Regulatory Guide 244 Giving information, general advice and scaled advice
  contains worked examples of scaled advice.

Exposure draft of legislation relating to acquisitions and disposals of certain assets between self-managed superannuation funds (SMSFs) and related parties as well as the accompanying explanatory material.

Tax Laws Amendment (2013 Measures No.1) Bill 2013: self-managed superannuation funds and related parties and the accompanying explanatory memorandum are available on the Treasury website here.

See ASFA’s submission here.

Intra-fund consolidation of accounts. Where a member has multiple accounts within a fund, funds would be required to identify and consolidate these accounts, where possible.

Proposed that:

• By 1 January 2013 trustees must have appropriate processes and protocols established.
• By 30 June 2014 all multiple accounts to be identified, a decision made as to whether or not to consolidate and any consolidation process to be completed.

See: Tax and Superannuation Laws Amendment (2013 Measures No. 2) Bill 2013 that was tabled in Parliament on 20 March 2013 and referred to the House Standing Committee on Economics on 21 March 2013.

The revised implementation date for the following reforms:

• Amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to capture rollovers to an SMSF as a designated service.
• The introduction of a new range of administrative penalties.
• Powers to require specific contraventions to be rectified.
• Mandatory trustee education.
• The acquisition and disposal of assets between SMSFs and related parties.
• Amendments to existing tax laws so that amounts illegally released early are taxed at the superannuation non-complying tax rate.

Full details are available on the Stronger Super website here.