Issue 663, 13 March 2018
In this issue:
- Information security: APRA consultation on new prudential standard
- First home super saver scheme and downsizer contributions: supporting regulations
Information security: APRA consultation on new prudential standard
APRA has released a consultation package containing a discussion paper and proposed new crossindustry prudential standard on information security.
The discussion paper indicates APRA’s intention to implement a cross-industry framework for the management of information security. The paper notes that information security management requires ongoing vigilance, improvement, investment and oversight, while technological developments continue to expand the scope and sophistication of potential malicious activity against financial institutions. APRA considers there is no ‘end-state’ for information security, therefore a continuous cycle of investment in sound practices is required of APRA-regulated entities.
APRA’s proposed requirements are set out in a new cross-industry prudential standard, draft Prudential Standard CPS 234 Information Security. Once finalised, CPS 234 will apply to licensees of registrable superannuation entities as well as authorised deposit-taking institutions, general insurers, life insurers, private health insurers, and authorised or registered non-operating holding companies.
APRA is aiming to finalise the new standard in November, with a view to it commencing 1 July 2019. APRA will also undertake separate consultation on updates to its existing prudential guidance on information security, SPG 234, to reflect the final version of CPS 234.
APRA is seeking comments by 7 June.
This consultation forms part of a project APRA is currently undertaking to update its prudential framework in respect of the qualitative management of operational risk across all APRA-regulated industries. During the second half of 2018 APRA will consult on cross-industry requirements for operational risk management and revised standards for business continuity and outsourcing.
First home super saver scheme and downsizer contributions: supporting regulations
The government has made regulations supporting the First Home Super Saver Scheme (FHSSS) and ‘downsizer’ measures announced in its May 2017 Budget.
The FHSSS allows individuals to make an amount of voluntary contributions to superannuation and then access those contributions and earnings to purchase a first home, subject to a number of conditions. Once released from superannuation, the contributed amounts and associated earnings will be taxed in the hands of the individual on a concessional basis (broadly, at marginal rates with a 30 per cent tax offset).
The downsizer measure allows individuals aged 65 and older to make a contribution to superannuation from the proceeds of sale of their main residence, with the ‘downsizer contribution’ not counted against the individual’s non-concessional contributions cap. An individual’s eligibility to make a downsizer contribution is subject to a number of conditions.
The measures were implemented by the First Home Super Saver Tax Act 2017 and Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act 2017, which received Royal Assent in December (see ASFA Action issues 643, 638, 627 and 654 for background).
The government has now made the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Regulations 2018 to support the FHSSS and downsizer measure.
The regulations:
- prescribe the withholding amount for amounts paid to an individual under the FHSSS, with effect from 1 July 2018 (the first date a withdrawal from the FHSSS can be made)
- amend the contribution rules in the Superannuation Industry (Supervision) Regulations 1994 to ensure superannuation entities are able to accept downsizer contributions from 1 July 2018.
The regulations were previously released in draft in July.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
