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Issue 800, 27 April 2021 
In this issue: 

 

Breach reporting: ASIC consultation

ASIC is consulting on proposed updates to its draft guidance on breach reporting reforms implemented by the Financial Sector Reform (Hayne Royal Commission Response) Act 2020.

Key aspects of the reforms include:
 

The reforms, which will commence on 1 October, flow from the Financial Services Royal Commission and findings from the ASIC Enforcement Review Taskforce.

ASIC notes that it expects a significant increase in the volume of reports received as a wider range of entities will be required to report and a wider range of breaches
will be subject to reporting.

ASIC has released a draft update to Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees, which has been revised to reflect the reforms. ASIC has also released Consultation Paper 340Breach reporting and related obligations, which seeks stakeholders’ views on the proposed regulatory guidance.

ASIC is also seeking feedback on a draft information sheet on the new ‘notify, investigate and remediate’ obligations set to apply to AFS licensees who are financial advisers.

ASIC intends to publish final guidance before the obligations commence on 1 October.

If you have any feedback you would like ASFA to consider in relation to the consultation materials, please forward it to Fiona Galbraith by close of business Friday 14 May.
 

 

Climate change financial risks: APRA consultation 

APRA has released draft Prudential Practice Guide CPG 229 Climate Change Financial Risks (PPG) for consultation. 

The draft PPG is designed to assist APRA-regulated entities in managing climate-related risks and opportunities as part of their existing risk management and governance frameworks under Prudential Standards CPS 220 Risk Management, SPS 220 Risk Management, CPS 510 Governance and SPS 510 Governance. The draft PPG covers APRA’s view of sound practice in governance, risk management, scenario analysis and disclosure.

The draft PPG notes that not all of the outlined practices are relevant for every institution and some aspects may vary depending upon the size, business mix and complexity of the institution.

Subject to feedback, the final PPG is expected to be released before the end of 2021.

If you have any feedback you would like ASFA to consider in relation to the draft PPG, please forward it to Maggie Kaczmarska by close of business Friday 9 July. 

 

Critical Infrastructure Asset Definition Rules: consultation 

The Department of Home Affairs is consulting on asset definition rules as part of the Critical Infrastructure and Systems of National Significance reforms that will have a direct impact on some large registrable superannuation entity (RSE) licensees.

The Security Legislation Amendment (Critical Infrastructure) Bill 2020, which is currently before the House of Representatives, will amend and build on existing regulatory regime created by the Security of Critical Infrastructure Act 2018 (the Act) to enhance security and resilience of critical infrastructure assets. (See ASFA Actions 771, 783 and 790 for background on the reforms.)

The Bill: 

Importantly for superannuation, the draft rules include a recommendation that the Minister make rules to prescribe RSE licensees that hold total assets over $20 billion as critical superannuation assets. 

Submissions in relation to the draft rules are due by 14 May 2021. If you have any comments you would like ASFA to consider including in its submission, please forward them to Byron Addison by close of business Monday 10 May or contact Byron on (02) 8079 0834. 

 

Regulator performance guide: consultation 

As part of its deregulation agenda, the Government is updating how it sets out its expectations for regulator performance and reporting.

The Department of Prime Minister and Cabinet has released a draft Regulator Performance Guide, with three main elements: 

The Department is seeking submissions on the draft guide by 21 May.
 

 

Your Future, Your Super: Senate Committee report deferred 

As indicated in ASFA Action issue 794, the legislation to enact the Government’s Your Future, Your Super reforms was referred to the Senate Standing Committee on Economics for inquiry and report by 22 April. The Committee’s reporting date has now been extended to 29 April.

The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 implements the YFYS reform package announced in the October 2020 Budget. That package contains measures to address underperformance of superannuation products, ‘stapling’ of members to superannuation funds and imposes a ‘best financial interests’ duty on trustees. The Bill also contains some amendments in relation to portfolio holdings disclosure that were not part of the Budget announcement. 

 

APRA Super Data Transformation: FAQs 

As reported in recent ASFA Actions, APRA recently finalised ten reporting standards under phase 1 of its Superannuation Data Transformation project (see issue 799 for the most recent update).

APRA has now published a set of frequently asked questions (FAQs) for registrable superannuation entity (RSE) licensees about these reporting standards.

APRA has indicated it intends to release FAQs on a regular schedule in the lead up to the first submission of data under the standards on 30 September. 

 

Transition to new IDR standards: ASIC letter and survey 

ASIC has written to the CEOs of superannuation fund trustees regarding the transition to the new internal dispute resolution (IDR) standards that commence on 5 October.

The letter emphasises the need for CEO level engagement with the new standards, which are set out in Regulatory Guide 271 Internal dispute resolution, and notes that significant work may be required to ensure the standards are met by 5 October.

ASIC will be undertaking ‘preparedness checks’ with trustees in the coming months. In preparation for this, it is requesting that fund trustees complete a voluntary survey that asks about the trustee’s current level of preparedness to comply with the new IDR standards. (The link through to the survey in the ASIC letter is for information only — trustees should use the link provided to their CEO directly to ASIC in order to complete the survey.) 

ASIC is seeking responses to the voluntary survey by 7 May. 

 

Modernising business communications 

The Government has provided an update on the progress of its work to modernising laws within the Treasury portfolio so they are technology neutral, to enable easier communication between businesses, individuals and regulators.

The Government has indicated that the first phase of legislative reform — which it intends to finalise by the end of 2021— will focus on the key areas raised by stakeholders which are implementation-ready. 

These include: 

Subsequent phases will consider reforms in additional areas that could benefit from greater technology neutrality, including: 

See ASFA Action issue 789 in relation to earlier consultation on the reforms and issue 797 for the latest update on a temporary COVID-19 relief measure (now expired) in relation to electronic execution of documents. 

 

SuperStream standards: SMSF rollovers and electronic release authorities 

The ATO has written to trustees of large superannuation funds reminding them about the transition period to implement the SuperStream Rollovers Version 3 changes.

The Rollovers Version 3 changes incorporate rollovers to and from SMSFs and electronic release authorities into the SuperStream standards.

According to the ATO’s CRT Alert 006/2021, the ATO’s letter: 

See ASFA Action issue 797 for background in relation to these reforms and the Rollovers Version 3 timetable. 

 

 

ASFA REGULATORY WATCHLIST

ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations

and other regulatory announcements relevant to superannuation.

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