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Issue 681, 31 July 2018 
In this issue: 


Superannuation prudential framework: APRA consultation 

APRA has released a third tranche of ‘short topic papers’ as part of its post-implementation review of the superannuation prudential framework introduced following the 2013 Stronger Super reforms. 

As outlined in ASFA Action issues 672 and 679, the review aims to ensure the prudential and reporting standards, and related guidance, have achieved their objectives and continue to remain fit for purpose. 

APRA released an overarching discussion paper and short topic papers on governance and risk management in late May and short topic papers on financial requirements, operational risk and outsourcing and investments in early July. APRA has now released: 

Submissions on all the papers will be due by 26 September. APRA expects to release a final report on the superannuation post-implementation review by early 2019. 

If you have any feedback you would like ASFA to consider in relation to this third tranche of consultation papers—to inform discussion at industry roundtables—please forward it to Fiona Galbraith by close of business Wednesday 8 August. 

If you have feedback you would like ASFA to consider including on the submission on all three tranches of consultation papers please forward it to Fiona Galbraith by close of business Friday 7 September. 



Fees and costs disclosure: expert report on RG 97 

ASIC has released an external report it commissioned into its regulatory guide on fee and cost disclosure in periodic statements and product disclosure statements (PDSs) for superannuation and managed investment scheme (MIS) products, RG 97. (See ASFA Actions issues 667, 652 and 650 for background.) 

The report was commissioned in November 2017 from Darren McShane. As part of his review, Mr McShane consulted widely with the industry in Australia and also looked at other jurisdictions through international benchmarking and case studies. 

The report is a detailed and thorough review of the existing fee and costs disclosure regime. It makes a number of recommendations to assist consumers in making comparisons and decisions in relation to superannuation and MIS products. 

ASIC has welcomed the release of the report and indicated it will release a consultation paper setting out its response to the report before the end of the calendar year. In the meantime, ASIC has advised that its facilitative approach to fees and costs disclosure will continue. 

The report: 

The report makes the point that its recommendations are inter-related and need to be taken as a package. If it is not considered possible to implement the recommendations as a package, the report recommends the substance of the current approach be maintained as the best fall-back. 



Royal Commission: background papers on superannuation 

Ahead of its hearings into superannuation, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has published a number of relevant background papers. 

The papers are: 

Comments can be made on the papers within four weeks of their publication date. 

The Commission is scheduled to undertake two weeks of hearings focused on superannuation from 6 August. 



Trust deficit in superannuation: ASIC Chair’s comments 

The Chair of ASIC, James Shipton, recently delivered a significant speech addressing the trust deficit in financial services, and particularly in superannuation. 

Mr Shipton: 

Mr Shipton highlighted ASIC work in relation to RG 97 (see above item) and enforcement actions in superannuation, and recent reports on SMSFs and financial advice issues in super (see ASFA Action issue 678). He noted that ASIC will shortly release a report on insurance in superannuation, and is doing further work in relation to employers and superannuation, total and permanent disablement insurance and personal advice provided by superannuation funds, and internal dispute resolution policy settings. 

Finally, Mr Shipton flagged that ASIC is looking to implement an enhanced supervisory approach for superannuation. This will include more frequent on-site visits and a more intensive engagement model, where superannuation stakeholders will deal with specific ASIC staff on a more consistent and regular basis. 



ASIC industry funding: reporting of business activity 

ASIC has announced it will require all its regulated entities to complete a business activity statement by 27 September, under its new industry funding arrangements. 

The arrangements, which commenced on 1 July 2017, require organisations regulated by ASIC to contribute toward the associated regulatory costs incurred in the previous financial year. 

To enable ASIC to calculate invoices, organisations must submit or confirm pre-populated business activity metric data on the operation of their business from the previous financial year. This will be done via a new online ASIC Regulatory Portal. 

ASIC indicated that a letter has been sent to each regulated entity’s registered office address, containing instructions to complete the process and a unique industry funding security key which is to be used to launch an online form. 

ASIC has indicated that if an entity has not received their letter by the end of July, they should refer to related information on the ASIC website. 




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

and other regulatory announcements relevant to superannuation.

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