Issue 852, 17 May 2022
In this issue:
Assisting members who lack conventional forms of ID: AUSTRAC consultation Working Group
AUSTRAC is seeking feedback on updated draft guidance to assist reporting entities to use a flexible approach to identify customers who don’t have conventional forms of identification.
In 2016-17 AUSTRAC first published guidance on Identifying customers who don’t have conventional forms of ID. AUSTRAC’s updated draft guidance:
- assists reporting entities to use alternative identification for customers from diverse backgrounds, facing adverse circumstances or who otherwise have difficulty providing conventional identification documents when accessing financial services
- expands on those customers who may, for a range of reasons, have difficulty providing conventional identification
- encourages reporting entities to take a flexible, sensitive and compassionate approach to assist these customers to access financial services they need and to enhance financial inclusion
- encourages businesses to undertake a risk-based assessment to determine the suitability of the alternative identification documentation provided by customers.
Customers that may be affected include:
- Aboriginal and Torres Strait Islanders
- people affected by natural disasters such as floods or bushfires
- people affected by family and domestic violence
- people experiencing periods of homelessness
- people who are or have recently been in prison
- refugees and asylum seekers
- transgender, intersex and gender diverse people
- people living in remote areas
- people who have difficulty providing identification due to health or ageing-related reasons.
The consultation closes on 22 June.
AUSTRAC has provided ASFA with a copy of the updated draft guidance and we are looking to form a Working Group to provide feedback on the draft guidance. It is anticipated that, due to the limited nature of the consultation, the Working Group will meet only once.
If you would be interested in participating in the Working Group, please email Fiona Galbraith by close of business Friday 20 May.
Derivative transaction reporting rules: ASIC consultation
ASIC has published its second consultation paper on proposals to update the ASIC Derivative Transaction Rules (Reporting) 2013.
ASIC’s webpage ASIC Consultation Paper 361 contains the consultation materials, including:
- Consultation Paper 361 Proposed changes to simplify the ASIC Derivative Transaction Rules (Reporting): Second consultation (CP 361)
- Attachment 1 to CP 361: Draft remade ASIC Rules (as ASIC Derivative Transaction Rules (Reporting) 2022 with effect from 1 October 2023)
- Attachment 2 to CP 361: Draft amended ASIC Rules (as ASIC Derivative Transaction Rules (Reporting) with effect from 1 April 2024)
An overview of the project, including the indicative timeline, is available on ASIC’s webpage: Upcoming Rules and Exemptions changes.
The consultation closes on 8 July. If you are interested in engaging with ASIC on this matter, please contact them via otcd@asic.gov.au.
2022 Election: superannuation policies
As part of its 2022 Election campaign, the Government has announced it will, if re-elected, allow first home buyers to access their superannuation and reduce the eligibility age at which homeowners can ‘downsize’ and contribute proceeds to superannuation.
Under the Super Home Buyer Scheme, first home buyers will be able to invest up to 40 per cent of their superannuation, up to a maximum of $50,000 to help with the purchase of their first home. The Scheme will apply to both new and existing homes with the invested amount to be returned to the individual’s superannuation fund when the house is sold, including a share of any capital gain.
No income or property caps will apply under the Scheme however eligibility will be restricted to first homebuyers who must have separately saved five per cent of the deposit. It appears that the Scheme would apply in addition to the existing First Home Super Saver Scheme, and it would commence by 1 July 2023.
The Government has also announced that it will, if re-elected, reduce the age for the superannuation downsizer scheme to 55 years from 1 July 2022. The downsizer scheme allows eligible individuals to sell their home and contribute up to $300,000 into superannuation without impacting their contributions caps. The eligibility age is currently 65 years however it was due to reduce to 60 from 1 July 2022 under an announcement from last year’s Budget, which had already been legislated via the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2022 (see ASFA Action issue 841).
The Government will also extend the time pensioners have to structure their assets following a sale of their family home, without impacting their pension, from one year currently to two years from 1 January 2023.
The Opposition has indicated it will, if elected, match the Government’s announcement in relation to the downsizer contribution but does not support the measure to allowing access to superannuation for a home purchase.
Separately, the Prime Minister has indicated that the legislated increases to the Superannuation Guarantee contribution rate will continue if the Government is re-elected, saying: “we haven’t made any changes to that legislation and we stand by the legislation as set out”.
Cybersecurity risks: ASIC’s expectations of AFS licensees
ASIC has published an article on its website outlining its expectations of Australian Financial Services (AFS) licensees in relation to cybersecurity risks, following a recent court judgment.
The article notes that the Federal Court found an AFS licensee to have breached its licence obligations by failing to do all things necessary to ensure the financial services covered by the licence were provided efficiently and fairly, and by failing to adequately manage its cybersecurity risks (ASIC v RI Advice Group Pty Ltd [2022] FCA 496).
ASIC has commented that:
- AFS licensees must adequately manage cybersecurity risks as part of their licence obligations
- adequate technological systems, policies and procedures should be in place to ensure sensitive consumer information is protected and to minimise the risk of consumer harm
- ASIC will take enforcement action when an AFS licensee does not meet these obligations.
The article notes that while ASIC does not prescribe technical standards nor provide expert guidance on operational aspects of cybersecurity, or prescribe specific requirements for individual licence holders, it expects licensees to address cyber risk as part of their AFS licence obligations, including risk management. Dual regulated AFS licensees (such as registrable superannuation entity licensees) will also have obligations to comply with the standards of other regulators, such as APRA.
Superannuation Data Transformation: APRA FAQs
On 5 May, APRA published five new frequently asked questions (FAQs) in relation to the reporting standards issued under Phase 1 of its Superannuation Data Transformation project.
The new FAQs are as follows:
- historical Data FAQs: 1.11 – how registrable superannuation entity licensees should report historical insurance data under SRF 251.2 – insurance payments
- FAQ: 251.3 h –reporting of tax rebates from insurance premiums in SRF 251.3
- FAQ 332.0 r – classification of expenses when considering APRA’s look-through requirements
- FAQ 550.0 q – reporting a benchmark allocation to the ‘currency exposure’ strategic sector or a currency hedging ration to internationally domiciled strategic sectors
- FAQ 705.1 f – reporting ‘investment horizon years number’ in SRF 705.1 where the investment time horizon in the relevant return objective is not specified.
Annual member meeting notices: ASIC response to questions
ASIC has provided ASFA with responses to two questions that have been raised with respect to annual member meeting (AMM) notices as follows:
- Does SIS reg 2.10(3) require the ‘extra information’ within the meaning of that regulation to be accessible by the member at the time the AMM notice is given or is the requirement that it be accessible by the member before the meeting is held?We consider that the extra information does not necessarily need to be accessible by the member at the time the AMM notice is given although this is preferable and would be expected for most information described in SIS reg 2.10(1)(b) – (h). If information described in SIS reg 2.10(1)(b)-(h) is not to be accessible by a member at the time the AMM notice is given to that member, the notice must provide details of how to access the extra information, including when the information will be accessible. The information must then be available for the member to access before the meeting is held so that they are sufficiently informed and equipped to ask questions about the information at the AMM.
- Does the short-form summary (within the meaning of SIS reg 2.10(1)(a)) need to be included on the first page of the information accompanying the AMM notice or the first page of the notice itself?We consider the summary should be included on the first page of the additional information accompanying the AMM notice.
ASIC website: superannuation resources
ASIC has identified several superannuation related resources on its website that may be of particular interest to ASFA members:
- Superannuation funds – this page contains guidance for superannuation trustees about their legal obligations, publications by ASIC in relation to superannuation, and other regulatory resources. ASIC’s latest publications can be accessed via the ‘What’s new’ bar on the right hand side of the page
- Further resources on superannuation – this page provides links to ASIC’s guidance, relief and legislative instruments, current projects and consultations, and news and reports relevant to superannuation trustees
- New and updated ASIC regulatory documents in 2022 – this page tracks new and updated regulatory documents and regulatory document update tables.
In addition, other available resources include:
- ASIC Corporate Plan 2021–25: Focus 2021–22
- Six monthly enforcement updates – most recently, 22-066MR ASIC enforcement update July to December 2021 – this report provides an update on ASIC’s enforcement action between 1 July and 31 December 2021, including several superannuation related matters.
- Quarterly updates – most recently, REP 725 ASIC quarterly update January to March 2022 – this report provides an update on ASIC’s work undertaken between 1 January and 31 March 2022, particularly, how ASIC is acting against misconduct, implementing new obligations and protecting consumers and investors.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.