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Issue 545, 18 August 2014 

In this issue: 


New choice form available 

The ATO has published the new choice form and instructions on its website. The form has been revised so as to capture the information that is specifically needed for employers to deliver contributions in accordance with the new electronic data standards for contributions. The new form is effective immediately. 


ASIC consults on over-the-counter derivative reporting rules 

ASIC has recently released Consultation Paper 221 OTC derivatives reform: Proposed amendments to ASIC Derivative Transaction Rules (Reporting) 2013. 

This consultation paper seeks feedback on a set of proposals to amend the ASIC Derivative Transaction Rules (Reporting) 2013. 

The draft rules attached to the consultation paper set out ASIC’s proposed amendments, which seek to reduce compliance costs for reporting entities and ensure that regulators obtain comprehensive and complete derivative trade data. 

In the consultation paper, ASIC outlines three options to address implementation issues and minimise compliance costs. However, CP221 doesn’t include an option to change the two-sided reporting regime to a one-sided reporting regime (which ASFA and other industry associations have previously advocated for). 

ASIC’s preference is Option 2. Option 1 is to maintain the current rules while Option 3 includes a requirement for foreign subsidiaries to report all derivative transactions (that is, to remove the materiality threshold). 

Under Option 2, ASIC proposes to make the following amendments to the derivative transaction rules: 

If you have questions or concerns about over-the-counter (OTC) derivative trade reporting, or any comments on the consultation paper that you would like ASFA to raise with ASIC, please contact David Graus by close of business Friday 22 August 2014. 


First SuperStream contributions processed 

The first SuperStream contribution transactions have been successfully processed from end to end. This represents a significant milestone for SuperStream implementation. 

The transactions were processed during the second week of August 2014 as part of the first group participating in the SuperStream induction process. Additional groups are scheduled to participate in the SuperStream induction process during August and through to November 2014. 

The ATO reports that the experience of this first group highlights the benefits which SuperStream will bring with an end-to-end flow of data and payments from employers to super funds. 


Lost Member Reporting – full re-report for April 2015 cancelled 

The ATO has recently issued an alert advising that the full re-report of lost members that was scheduled for the reporting period ended 31 December 2014 (due 30 April 2015) will no longer go ahead as originally planned. 

While the full re-report was supported by a number of funds, the ATO is conscious that the industry is currently implementing significant changes to their systems and processes as a result of the recent reforms, and this work is likely continue over the next 12 months. The ATO is therefore of the view that the timing of the proposed full re-report of lost members would not be appropriate given this full re-report would require additional resources and work efforts for both funds and the ATO (including a major IT release) during the period between January and April 2015. 

As a result of this decision, funds will still need to complete their normal incremental Lost Member Statement reporting for the periods ending 30 June 2014 (due 31 October 2014) and 31 December 2014 (due 30 April 2015). 

The ATO’s decision is also supported by the ongoing reduction trends of accounts on the Lost Members Register. 

The ATO has been working closely with funds over recent years to ensure a more accurate and complete Lost Members Register (LMR). The ATO has advised that it is keen to continue these collaborative efforts with the industry to focus on lost accounts where the balances are under $2,000 or the member is aged over 65 years or the member is deceased. 


ASIC launches new National Financial Literacy Strategy 2014-17 

On 1 August 2014, ASIC launched its new National Financial Literacy Strategy 2014–17 (Strategy). 

The new Strategy aims to improve the financial literacy of all Australians by providing a national framework for action for stakeholders across the government, business, community and education sectors, led and coordinated by ASIC, the Australian Government agency responsible for financial literacy. 

Over the last 12 months, ASIC led a comprehensive consultation process with over 200 stakeholders, to shape the new Strategy and identify the key priorities for action. In addition to the feedback and views gathered from stakeholders, the new Strategy is informed by relevant consumer and investor research, including insights from behavioural economics and the experiences of other countries around the world. 

Launching the new Strategy, Parliamentary Secretary to the Treasurer, The Hon Mr Steven Ciobo MP said: “With almost every Australian owning one or more financial products, improved financial literacy can benefit anyone, regardless of age or income, in terms of having greater understanding of financial matters and the ability to meet financial goals for the future. 

“Being able to make the most of your money, manage financial risks and avoid financial pitfalls can have a positive impact on the financial wellbeing of individuals, families and communities.” 

ASIC Chairman Greg Medcraft noted that ASIC has a strategic priority to promote confident and informed consumers and investors in the financial system, whether they are taking out a home loan, planning for their retirement or investing in the market. 

“Promoting greater financial literacy is key to ASIC’s strategic priority,” Medcraft said. 

Under the Strategy, ASIC will continue to enhance its popular MoneySmart website for consumers and investors, and reach more schools through its MoneySmart Teaching program, designed to promote and support financial literacy for schools. 

“Over 400,000 Australians already benefit from visiting ASIC’s MoneySmart website each month to access free and impartial tools and resources to help them make their financial decisions,” Mr Medcraft said. 

Chairman of the Australian Government Financial Literacy Board, Paul Clitheroe, said, “Educating the next generation to be MoneySmart is a key part of the National Strategy. With over 80 per cent of Australian 15 year olds having a bank account, and about 90 per cent of teenagers with a mobile phone, learning good financial skills and habits from an early age can make a difference throughout life.” 

ASIC has welcomed the commitment of many organisations across all these sectors to the delivery of financial literacy initiatives aligning with the priorities set out in the Strategy. ASFA is a strong supporter of the Strategy. One example of this is our Super Guru website: an independent resource that helps people of all ages and life stages to understand and maximise their super. 

ASIC will liaise with relevant stakeholders on the implementation of the 2014-17 Strategy and will report regularly on progress. 


APRA FAQs on reporting and prudential practice guides 

APRA has released several new and updated Frequently Asked Questions (FAQs) on its data reporting requirements and the prudential practice guides. 

Issues covered by the new and updated data reporting FAQs include reporting of: 

APRA has also added a new FAQ clarifying how Funds Under Management (FUM) should be determined in order to calculate an Operational Risk Financial Requirement (ORFR) target amount. This new FAQ addresses an error that has been identified in Prudential Practice Guide SPG 114 Operational Risk Financial Requirement, and makes it clear that, for the purpose of calculating the ORFR target amount, FUM should be taken to be the balance of net assets available to pay members’ benefits. APRA will amend SPG 114 in due course. 


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