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Issue 790, 5 January 2021 
In this issue: 


Capital gains tax rollovers: Board of Taxation review 

The Board of Taxation has released a consultation paper proposing significant reform to the existing capital gains tax (CGT) roll-over rules. 

As reported in ASFA Action issue 731, the Board commenced its review of CGT roll-overs in December 2019. The Board released an initial ‘consultation guide’ last February and was originally due to report back to the Government by 30 November. The consultation period was subsequently extended due to the COVID-19 pandemic and a revised reporting deadline has not yet been announced. 

On 23 December, the Board issued a second consultation paper. This sets out the Board’s first-stage proposal for rationalising (and replacing) seven of the key CGT roll-overs that deal with the most common business restructuring transactions, including mergers, demergers, and internal reorganisations. 

These proposals have potential implications for superannuation funds. For example, if adopted by the Government, the proposed ‘general business restructure roll-over’ could potentially replace the specific roll-over relief for merging superannuation funds and provide greater scope for a trustee to rationalise a fund’s investment structure following a merger. 

If you have any feedback that you would like ASFA to consider in relation to the consultation paper, please forward it to Julia Stannard by close of business Monday 25 January. 



Critical infrastructure review 

A Parliamentary committee is conducting a review of existing legislation and a Bill currently before Parliament that relates to Australia’s critical infrastructure. 

In mid-December, the Government introduced the Security Legislation Amendment (Critical Infrastructure) Bill 2020 (the Bill) into Parliament. This followed consultations in August and November (see ASFA Action issues 771 and 783) on amendments building on the existing regulatory regime created by the Security of Critical Infrastructure Act 2018 (the Act) to enhance security and resilience of critical infrastructure assets and systems of national significance. Expansion of the concepts to include systems of national significance is intended to widen the regime to address threats such as natural disasters and cyber-attacks. 

The Bill seeks to achieve this expansion by amending the Act to: 

Separate to the introduction of the Bill, there is an existing requirement that the Parliamentary Joint Committee on Intelligence and Security commence a review into the operation, effectiveness and implications of the reforms introduced in the Act by 11 April 2021. 

As the Bill amends the regime established by the Act, the Committee will be commencing its statutory review of the Act in conjunction with its review of the amendments proposed in the Bill. The statutory review will analyse the operation, effectiveness and implications of the Act. In particular, it will: 

If you have any feedback you would like ASFA to consider in relation to the review of the Bill or the statutory review of the Act please forward it to Byron Addison by close of business Friday 5 February 2021. 



APRA data collection tool: APRA Connect 

APRA has advised it is planning to launch its new data collection solution, APRA Connect, at the end of September 2021. 

In late March, APRA suspended its program to implement APRA Connect as a replacement to the current Direct to APRA (D2A) system, due to the COVID-19 pandemic. 

In late December, APRA indicated that the project has resumed and provided the following outline: 

More information will be made available via the dedicated webpage Getting ready for APRA Connect. APRA is encouraging entities to consider what the introduction of APRA Connect and the revised implementation approach means for their transition to APRA Connect. 



Financial services regulation: review of the legislative framework 

As reported in ASFA Action issue 775, the Government has asked the Australian Law Reform Commission (ALRC) to conduct a review of the legislative framework for corporations and financial services regulation. The Terms of Reference (ToR) for the review set out three sub-topics: 

Separate interim reports are to be produced for each sub-topic, by 30 November 2021, 30 September 2022 and 25 August 2023 respectively, with a final report due by 30 November 2023. 

In late December, the ALRC updated its website to set out the approach it will take in relation to this multi-year review. In particular, this notes as follows: 

The ALRC’s proposed approach is to treat the ToR as one overarching inquiry, rather than as three sub-inquiries on discrete topics. This will have the benefit that the consolidated final report will be able to make a set of recommendations that inter-relate and make sense as a coherent whole. In any event, the sub-topics set out in the ToR will inevitably overlap and each will have implications for the others. 

One way of achieving coherence across the topics to be covered in the Interim Reports is to maintain a level of consistency in scope throughout the Inquiry. Consequently, the ALRC proposes that Chapter 7 of the Corporations Act be a focus point for each of the topics. However, issues and themes arising in other parts of corporations and financial services law will also be identified and captured. That is, the ALRC will analyse other parts of the Corporations Act, other legislation relevant to corporations and financial services, and other Commonwealth statutes, in developing its recommendations. The ALRC’s recommendations will have implications for legislative design well beyond Chapter 7 of the Corporations Act. 



APRA and ASIC engagement 

APRA and ASIC have published their first annual update on engagement between the two regulators. 

The update highlights areas where APRA and ASIC have “demonstrated strengthened collaboration” over the last 12 months, including in relation to addressing issues arising from the COVID-19 pandemic. In relation to superannuation specifically, the update notes that “APRA and ASIC have worked together to ensure guidance to trustees was integrated, including jointly informing all licensees on 1 April 2020 of current and new obligations prompted by the crisis. The agencies have also collaborated on developing and implementing a single pandemic data collection”. 

The update notes that: 

The publication of the update fulfils the agencies’ obligation under their 2019 Memorandum of Understanding to report annually on their engagement activities. 




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

and other regulatory announcements relevant to superannuation.

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