ASFA Action Issue 955, 16 July 2024
In this issue:
- ASIC and APRA issue final rules and information for the Financial Accountability Regime
- Bill updates: Delivering Better Financial Outcomes
- Housing Australia Future Fund Facility – establishment of financing arrangements
ASIC and APRA issue final rules and information for the Financial Accountability Regime
ASIC and APRA have published new information to help insurers and superannuation trustees prepare for the commencement of the Financial Accountability Regime (FAR).
The FAR takes effect for the insurance and superannuation industries from 15 March 2025. It imposes a strengthened responsibility and accountability framework to improve the risk governance cultures of APRA-regulated entities, their directors and most senior executives.
The new information package includes:
- an amendment to the Regulator rules, which prescribes key functions information for inclusion in the FAR register of accountable persons for insurance and superannuation industries; see Financial Accountability Regime Regulator Rules Amendment Instrument No. 1 of 2024 and Financial Accountability Regime Act (Information for register) Regulator Rules 2024; and
- a joint ASIC and APRA letter summarising key issues raised during consultation and their response, including the concept and application of key functions.
It updates previously released information to reflect the final Regulator rules, including:
- an updated information paper to assist entities and their accountable persons in understanding and complying with their obligations under the FAR, with changes made to reflect the final list of key functions and their descriptions;
- an updated accountability statement guide and template to help entities subject to the FAR enhanced notification obligations to prepare accountability statements; and
- reporting form instructions to assist insurance and superannuation entities in providing the required information to ASIC and APRA.
The release of these materials follows a joint public consultation on the draft amendment to the Regulator rules and draft key functions descriptions for the insurance and superannuation industries.
Guidance materials for the new information package are available at: Financial Accountability Regime on ASIC’s and APRA’s websites. For the Regulators’ response and non-confidential submissions to the consultation, please refer to the FAR consultation page.
This information completes the total package of FAR guidance materials.
Further details on proposed industry engagements and implementation timeframes are available on the new FAR implementation for insurance and superannuation entities page on APRA’s website.
Bill updates: Delivering Better Financial Outcomes
On 9 July the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 received Royal Assent.
As reported in ASFA Action Issue 954 the Bill had been passed by both Houses with significant amendments to the proposed rewrite of provisions specifying when a fund trustee may deduct advice fees from a member’s superannuation account.
Housing Australia Future Fund Facility – establishment of financing arrangements
The Housing Australia Investment Mandate Amendment (2024 Measures No. 1) Direction 2024 has been issued by authority of the Minister for Housing, Minister for Homelessness and Minister for Small Business.
The purpose of the Instrument is to amend Housing Australia’s Investment Mandate to establish the financing arrangements for the Housing Australia Future Fund Facility (HAFFF) and the National Housing Accord Facility (NHAF).
Specifically, Housing Australia can provide availability payments, which are recurring grants made over a period of 25 years, to finance HAFFF projects and NHAF projects. Housing Australia can also issue concessional loans, which will be no interest, to support the delivery of HAFFF projects and NHAF projects. In relation to HAFFF projects only, Housing Australia can provide upfront grants, which are one-off grants, to finance HAFFF projects that increase available social housing.
The Instrument also amends the Investment Mandate to:
- increase the maximum limit on capacity building contracts from $1.5 million to $3 million, supporting further expansion of capacity building assistance provided to eligible registered community housing providers;
- increase the maximum amount that can be allocated to the Affordable Housing Bond Aggregator (AHBA) reserve from $1 billion to $4 billion, supporting further expansion of the AHBA; and
- increase the cap of Housing Australia’s total liabilities (Liability Cap) by $2.5 billion, from $7.5 billion to $10 billion.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
