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Issue 726, 4 November 2019 
In this issue: 

 

PMIF: ASIC’s expectations about member communications 

With trustees due to make communications by 1 December about the changes to default insurance cover as a result of the Treasury Laws Amendment (Putting Members’ Interests First) Act 2019 (PMIF Act), ASIC has outlined its expectations of trustees in relation to member communications. 

The PMIF Act contains provisions making insurance opt-in for members under 25 or with account balances under $6,000 (see ASFA Action issues 721, 717 and 715). By 1 December, trustees are required to provide certain notices in writing to members potentially affected by the reforms, including those who have balances under $6,000 and hold insurance cover. Other disclosure obligations include updates to product disclosure statements and, potentially, significant event notices. 

ASIC has emphasised that trustees’ communication plans should be holistic and centred around members. It has outlined a number of key considerations for trustees in communicating with members. Trustees must: 

 

 

Complaints handling: update on ASIC consultation 

ASIC has indicated to ASFA that while it intends to publish an updated version of its s handling regulatory guide RG 165 in December 2019, “appropriate transitional timeframes” will be provided in relation to its revised requirements. 

As reported in recent ASFA Actions, ASIC has been consulting on substantial proposed reforms to the complaints handling standards for its regulated entities, including superannuation fund trustees. ASIC recently provided an update regarding some aspects of its proposed requirements—relating to data collection and reporting—that will be temporarily postponed and removed from the update to RG 165 being published in December. ASIC has also issued legislative instruments continuing the current complaints handling standards until 30 June 2020. (See ASFA Action issue 723 for background.) 

ASIC has now provided the following further update on its progress in relation to finalising RG 165: 

The draft RG 165 that ASIC consulted on in CP 311 proposed transitional timeframes for some specific requirements, but proposed that other policy requirements would take effect immediately. 

During the consultation process ASIC received strong feedback about the impracticability of commencing any of the RG 165 policy changes on the day of commencement. We have taken these views into account and we will be including appropriate transitional timeframes in the final guidance. 

 

 

APRA data collection solution: update 

APRA has issued an update on the implementation of its new data collection solution, to replace the current Direct to APRA (D2A) system. 

An implementation plan issued in late July indicated that APRA’s anticipated timeframe for delivering its new data collection system had moved from March 2020 to some time later in 2020 (see ASFA Action issues 717, 704, 682 and 662 for background). This deferral was due to complexities identified in the design phase, additional scope, external dependencies as well as industry feedback. Since then, APRA has been continuing the technical build, receiving entity feedback about current and future submission methods, and engaging with reference and working groups about the transition to the new solution. 

APRA has acknowledged that a key challenge for stakeholders is the complexity of migrating all existing collections in their current form (which may create significant burden for some entities as extensive resubmission of past returns may be required), while ensuring the benefits of the new solution are realised. 

APRA’s latest update indicates it is exploring alternative implementation approaches for the new Data Collection Solution. As part of this, APRA is conducting workshops with industry to gather feedback on the impact of continued reporting through D2A beyond March 2020 and the preparation required for entities to change current processes for existing collections versus new and amended collections. APRA will confirm its implementation approach and revised timeline in early 2020, once it has completed this review. 

The update also indicates that: 

 

 

Senate Committee inquiry on FinTech and RegTech 

The Senate has established a committee to inquire into and report on matters in relation to financial technology (FinTech) and regulatory technology (RegTech). 

The Select Committee on Financial Technology and Regulatory Technology will inquire and report on matters including: 

The Committee is to present its final report on or before the Senate’s first sitting day in October 2020. 

The committee has published an issues paper posing a number of questions in relation to its inquiry. In particular, the paper asks: 

The deadline for submissions to the inquiry is 31 December 2019. 

 

 

ESG Factors in a Superannuation Context: new ASFA paper 

ASFA has published a new paper on environmental, social and governance (ESG) factors in a superannuation context. 

The paper, Environmental, Social and Governance (ESG) Factors in a Superannuation Context, provides an overview of ESG factors in a superannuation context to help superannuation trustees decide what is best for their fund. Key findings include: 

The key takeaway is that superannuation funds need to consider ESG factors from a value perspective (that is, add to retirement savings outcomes) as opposed to a values perspective. 

The ASFA secretariat developed the paper with the ASFA Economics and Investment Policy Council and representatives of member organisations. 

 

 

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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