ASFA Action Issue 972
In this issue:
Sustainability reporting: consultation on draft ASIC regulatory guide
ASIC has released Consultation Paper CP 380 Sustainability reporting, which includes a draft of a new regulatory guide on its approach to sustainability reporting.
As reported in recent ASFA Actions, amendments to the Corporations Act 2001 by the Treasury Laws Amendment (Financial Market Infrastructure & Other Measures) Act 2024 have introduced mandatory requirements for large businesses and financial institutions – including superannuation funds – to make disclosures relating to climate in accordance with sustainability standards made by the Australian Accounting Standards Board (AASB). (See ASFA Action issue 965 regarding passage of the legislative amendments and issue 967 in relation to the AASB’s finalised reporting standards.)
The reporting requirements will be phased in over the next three years across three groups of reporting entities, with the first reporting cohort required to prepare annual sustainability reports for the financial year commencing on or after 1 January 2025. The second and third reporting cohorts are required to prepare annual sustainability reports for the financial years commencing on or after 1 July 2026 and 1 July 2027 respectively. Registrable superannuation entities will be in the second or third reporting cohorts depending on their size.
The draft regulatory guide includes guidance on who must prepare a sustainability report, how the regime will interact with existing legal obligations and how ASIC will administer the sustainability reporting requirements. This includes specific guidance on ASIC’s approach to granting relief from the regime and use of its new directions power. The draft also addresses specific issues in relation to the contents of the sustainability report and sustainability-related financial disclosures outside the sustainability report.
ASIC notes that that there will be a period of transition while entities build their capability, as reflected in the phasing in of requirements and modified liability provisions. ASIC Commissioner Kate O’Rourke said “During this transition period, we will take a proportionate and pragmatic approach to supervision and enforcement.”
ASIC is urging all reporting entities to prepare for the new climate disclosure regime. The ASIC website has a dedicated information page for the sustainability reporting measures.
If you have any feedback you would like ASFA to consider in relation to the consultation paper and draft regulatory guide, please forward it to Andrew Craston by close of business Thursday 5 December.
Bills update: scams prevention, privacy
Scams Prevention Framework
The Government has introduced into the House of Representatives the Scams Prevention Framework Bill 2024.
The Bill creates the Scams Prevention Framework (SPF) for preventing and responding to scams impacting the Australian community. The SPF will have the following features:
- overarching principles (SPF principles) that apply to regulated entities
- sector-specific codes (SPF codes) that apply to regulated entities in certain regulated sectors
- rules (SPF rules) to support the effective operation of the framework
- a multi-regulator framework
- regulatory and enforcement mechanisms, including a two-tier civil penalty framework
- dispute resolution mechanisms.
The SPF applies to regulated entities in regulated sectors with respect to the regulated services of those entities. A Treasury Minister may designate a sector of the economy to be a regulated sector. The Government’s intention is to initially designate telecommunications services, banking services and certain digital platform services.
The Government has undertaken two prior consultations, including on an exposure draft of the Bill (see ASFA Action issues 964 and 925 for background). As part of its initial consultation, the Government noted that sectors designated to be covered by the Framework in future could include superannuation.
Privacy reforms
The Privacy and Other Legislation Amendment Bill 2024 has been passed by the House of Representatives without amendment. See ASFA Action issue 964 for background.
RSE auditor appointment, resignation or removal: fee regulations
The Government has made the Corporations (Fees) Amendment (RSE Auditors) Regulations 2024, related to recent legislative amendments to the financial reporting and auditing requirements for registrable superannuation entities (RSEs)
Those legislative amendments, made by the Treasury Laws Amendment (2022 Measures No. 4) Act 2023, broadly sought to align the financial reporting and auditing requirements for RSEs with those applicable to public companies and registered schemes (see ASFA Action issue 904 for background). The amendments commenced on 1 July 2023. Those amendments included a requirement that RSE auditors and superannuation trustees must apply to ASIC for the appointment, resignation or removal of an RSE auditor.
The Regulations prescribe that there is no fee for applications made to ASIC for the resignation, removal or appointment of RSE auditors, in line with the treatment of similar entity types such as managed investment scheme auditors.
The Regulations commenced on 8 November (the day after their registration) but have retrospective application from 1 July 2023.
ASIC industry funding model: legislative instruments
ASIC has registered two legislative instruments relevant to its industry funding model:
- The ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2024/882 specifies matters about the size and composition of ASIC’s regulated population and the metrics that apply to each industry sub-sector within that regulated population for the 2023-24 financial year
- The ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2024/821 specifies ASIC’s regulatory costs and their attribution to each industry sub-sector for the 2023-24 financial year.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
