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Issue 596, 21 March 2016 

In this issue: 

 

Portfolio holdings and choice dashboards: bill introduced 

On 17 March 2015, the government introduced into Parliament a bill to amend and defer two key superannuation transparency measures that were due to commence shortly — portfolio holdings disclosure and choice product dashboards. 

The Superannuation Legislation Amendment (Transparency Measures) Bill 2016 amends existing requirements in the Corporations Act 2001 for portfolio holdings disclosure and choice product dashboards. These requirements had previously been deferred by ASIC class order ahead of consultation on a draft bill in December 2015 (see ASFA Action issue 589). 

Importantly, the bill now further defers the start date for both measures. Other key amendments include: 

Regulations to support both measures are yet to be finalised. 

 

Extension of choice of fund: bill introduced 

On 17 March 2016, the government introduced into Parliament a bill to extend the coverage of the choice of superannuation fund rules. 

The Superannuation Legislation Amendment (Choice of Fund) Bill 2016 provides that choice of fund will apply to employees under new workplace determinations or enterprise agreements that are made from 1 July 2016. 

New employees will be required to receive a standard choice form when they commence employment under a workplace determination or enterprise agreement that is made on or after 1 July 2016. Existing employees will not need to be given a standard choice form where a workplace determination or enterprise agreement is made on or after 1 July 2016, however they will be able to request a form and the employer will be required to act on such a request in accordance with the choice rules. 

The bill includes an amendment ensuring that employers who rely on an existing exemption for certain members of a defined benefit scheme are not penalised. 

 

Superannuation guarantee: penalty amendments removed from bill 

On 16 March 2016, the House of Representatives considered the Treasury Legislation Amendment (Repeal Day 2015) Bill 2016, which included proposed amendments to the penalties that can be imposed on employers for breach of their superannuation guarantee obligations. 

During debate, the proposed Superannuation Guarantee amendments were removed from the bill, and will not proceed at this time. 

The bill also contains proposed amendments to allow the Australian Taxation Office (ATO) to pay unclaimed superannuation directly to an individual who is suffering from a terminal medical condition, and remove the requirement for a superannuation trustee to lodge a separate, biannual lost member statement with the ATO. These amendments remain in the bill, which is currently before the Senate. 

 

APRA: superannuation priorities for 2016 

In a statement to the House of Representatives Standing Committee on Economics, the APRA Chairman, Wayne Byres, has outlined three areas that will receive particular focus from APRA in 2016: 

“Firstly, the robustness of strategic and business planning being undertaken by boards. In a rapidly evolving environment, superannuation trustees need to have in place robust processes for setting their strategic direction, establishing business plans, and reviewing their operations, services and performance against appropriate benchmarks. This is an area where we observe industry practices can be improved. 

Second, we will also be looking at board appointment, renewal and performance assessment processes, with a view to highlighting better practices, as well as areas where improvements are required in line with accepted principles for sound governance. 

And third, APRA will be following up our 2014 work on conflicts management, which identified oversight of related party arrangements as a particular area of weakness in superannuation industry practices. Although it did not refer any specific matters to APRA, similar issues were identified by the Royal Commission into Trade Union Governance and Corruption. We will therefore be reviewing more deeply – for a sample of funds across all industry segments – practices in relation to the management and oversight of different types of related party arrangements. This work will assess the extent to which issues we highlighted in our 2014 review have been addressed, and identify where further improvements in practices are still needed.” 

 

Superannuation platforms: ASIC to extend shorter PDS relief 

In ASFA Action issue 592, we reported that ASIC has advised ASFA of its intention to extend, for a further 12 months, existing relief from the shorter product disclosure statement (PDS) rules for superannuation platforms. 

Class Order [CO 12/749] Relief from the Shorter PDS regime has provided optional relief from the shorter PDS regime for superannuation platforms until 30 June 2016. The effect of this relief is that unless the trustee elects to prepare a shorter PDS for a platform, it must comply with the full PDS requirements until that date. [CO 12/749] also has application to some simple managed investment schemes, specifically multi-funds and hedge funds. 

ASIC has now made ASIC Corporations (Amendment) Instrument 2016/56, which extends the relief provided by [CO 12/749] until 30 June 2017, pending further work by government on the application of the shorter PDS regime to superannuation platforms, multi-funds and hedge funds. 

 

Statements by experts and advisers: consolidation of ASIC relief 

ASIC has consolidated the relief previously given from provisions in the Corporations Act regarding the use in various disclosure materials of statements made by, or attributed to, experts and advisors. 

Under section 1013K of the Corporations Act, a product issuer is only permitted to include in a PDS a statement by (or attributed to) an expert or adviser if certain conditions have been met, including that the expert/advisor has given their consent to their statement being included in the PDS. Class Order [CO 02/141] enabled an issuer to make a statement in a PDS without obtaining consent, which cites or is based on statements made by an official person, contained in a public official document or already published in a book, journal or comparable publication. 

Similar rules regarding the use of statements by experts and advisors apply in relation to other Corporations Act disclosure provisions, including those relating to takeover bids and fundraising documents, and similar relief has been provided by ASIC from those provisions. 

ASIC has now issued ASIC Corporations (Consents to Statements) Instrument 2016/72, consolidating and continuing its previously granted relief, including the relief from section 1013K provided by [CO 02/141]. 

[CO 02/141] has been repealed by ASIC Corporations (Repeal) Instrument 2016/171 with effect from 17 March, the date that Instrument 2016/72 commences. 

 

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