Issue 602, 5 May 2016
In this issue:
- Product dashboards: periodic statement relief extended
- Portfolio holdings disclosure: extension for intermediaries’ obligations
- Review of complaints handling bodies: panel established
- Stronger Super reforms: ASIC update
- Non-written consent to rollover: new APRA FAQ
- Budget superannuation changes: factsheets
Product dashboards: periodic statement relief extended
ASIC has extended existing relief allowing a trustee to provide a product dashboard to a member via the fund’s website, rather than including a copy with the member’s periodic statement.
The Superannuation Legislation Amendment (MySuper Measures) Regulation 2013 introduced paragraph 7.9.20(1)(o) of the Corporations Regulations 2001. This provision requires that superannuation product dashboards must be included as part of a periodic statement provided to members if the trustee is required to make publicly available a product dashboard for the investment option under section 1017BA of the Corporations Act 2001.
ASIC Class Order [CO 13/1534] provided interim relief from that requirement for reporting periods ending before 1 July 2015, where the trustee includes in the periodic statement a website address for the latest product dashboard for the investment option. In April 2015, ASIC extended this relief for a further 12 months, so that it applied to periodic statements for reporting periods ending before 1 July 2016 (see ASFA Action issue 564).
ASIC has now issued ASIC Corporations (Amendment) Instrument 2016/364 to further extend the relief to apply to reporting periods ending before 1 July 2017.
Portfolio holdings disclosure: extension for intermediaries’ obligations
ASIC has deferred portfolio holdings disclosure rules requiring intermediaries to provide trustees with information about indirectly invested assets, to allow time for the passage of amending legislation, which will modify ‘look-through’ requirements in relation to indirectly held assets.
As explained in ASFA Action issue 596, the government introduced the Superannuation Legislation Amendment (Transparency Measures) Bill 2016 (Transparency Bill) into Parliament, to amend and defer trustee obligations in relation to portfolio holdings disclosure. Amendments in the Transparency Bill deferred the first six monthly reporting day for portfolio holdings disclosure to 31 December 2017. The Transparency Bill lapsed when the Governor General formally suspended Parliament on 15 April 2016 and has not yet been reintroduced for consideration in the current sitting of Parliament.
With the amendments to the legislative framework not in place, and regulations containing the detailed requirements for portfolio holdings disclosure not finalised, there were concerns that this meant trustees’ obligations were to be determined based on the existing (unamended) provisions in the Corporations Act 2001 (Corporations Act), as varied by ASIC class order [CO 14/443] and a number of amendments to that class order.
To resolve any potential uncertainty, ASIC registered the ASIC Corporations (Amendment) Instrument 2016/351, amending [CO 14/443] to defer the first reporting day for portfolio holdings disclosure to 31 December 2017, to reflect the deferred commencement dates in the Transparency Bill. This was intended to provide certainty in the event that the Transparency Bill is not reintroduced and passed before 1 July 2016 (see ASFA Action issue 600).
Instrument 2016/351 did not fully address the status of current sections 1017BC, 1017BD and 1017BE of the Corporations Act, under which intermediaries must provide a fund trustee with full details of assets invested that are, or are derived from, an asset of a registrable superannuation entity (RSE). These ‘look through provisions’ are designed to require the full reporting of superannuation assets that are invested through one or more intermediaries.
ASIC has now issued ASIC Corporations (Amendment) Instrument 2016/364, amending [CO 14/443] to defer the obligations under sections 1017BC, 1017BD and 1017BE of the Act to 30 June 2017. This will allow further time for the amending legislation and regulations relating to the requirements to be made.
Review of complaints handling bodies: panel established
The government has announced the establishment of an independent expert panel to lead the review into the financial system’s external dispute resolution and complaints framework.
The review was announced on 20 April as part of a package of measures to strengthen ASIC and bolster consumer confidence in the financial services sector. This package included the government’s response to the Capability Review of ASIC and consultation on moving toward an industry funding model. The government’s commitment to these measures was confirmed in the 2016/17 Budget (see ASFA Action issue 601).
In particular, the government committed to establishing an independent panel to review the role, powers and governance of all of the financial system’s external dispute resolution and complaints schemes—the Financial Ombudsman Scheme (FOS), Superannuation Complaints Tribunal, and Credit and Investments Ombudsman. The Panel will be asked to assess the merits of better integrating these schemes to improve the handling of consumer complaints, including by exploring the possibility of having a ‘one-stop-shop’ for handling consumer disputes and complaints. The panel is to report back to the government by the end of 2016.
The government has now announced that the Panel will be chaired by Professor Ian Ramsay, Professor of Commercial Law at the University of Melbourne and a member of the Law Council of Australia. Assisting Professor Ramsay will be Alan Kirkland (the chief executive officer of Choice, with extensive experience in consumer advocacy) and Julie Abramson (a lawyer with over 20 years regulatory experience at both Federal and State levels, and a part time Commissioner at the Productivity Commission).
Stronger Super reforms: ASIC update
ASIC has provided an update on aspects of the Stronger Super regime aimed at providing the superannuation industry with certainty around the start dates for key superannuation reforms.
In particular, ASIC has noted that:
- the start dates for portfolio holdings disclosure reporting and choice product dashboard requirements have been further deferred to 1 July 2017 (with a first reporting day for portfolio holdings disclosure of 31 December 2017)—see ASFA Action issue 600
- the start date for certain website disclosures for standard employer-sponsored sub-plans has been further deferred until 1 July 2017—see ASFA Action issue 600
- relief that allows RSE licensees to provide a product dashboard with a periodic statement by including a website address for the latest product dashboard, rather than requiring a hard copy of the dashboard to be included with the periodic statement has been extended until 1 July 2017—see separate article in this ASFA Action.
Non-written consent to rollover: new APRA FAQ
APRA has clarified the status of relief granted in 2002 permitting RSE licensees to accept non-written consent for a rollover in light of the SuperStream requirement that RSE licensees must accept electronic rollover requests.
The Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations) generally prohibit the rollover and transfer of a member’s benefits from a fund unless the member has given their consent to the rollover or the transfer, the RSE licensee reasonably believes the RSE licensee of the receiving fund has received the member’s consent, or the transfer is to a successor fund or the transfer of an accrued default amount to a MySuper product.
The SIS Regulations give APRA the power to determine a form of consent that is sufficient to accept rollovers and transfers. In 2002, APRA issued a determination, Form of Non Written Consent Sufficient for Rolling Over or Transferring Benefits. This specifically permitted a member’s consent for a rollover or transfer to be transmitted electronically, orally or in any other non-written form, if the transferring trustee complied with certain requirements specified in the determination.
The SIS Regulations have since been amended to implement SuperStream requirements, including requiring RSE licensees to accept electronic rollover requests. This has led to questions from some RSE licensees about whether the 2002 determination remains valid.
APRA has now issued a new FAQ 5, confirming that the determination remains valid and continues to permit electronic, oral and other non-written consent to rollovers and transfers. APRA will consider in due course whether updated guidance on non-written consent for rollovers and transfers would be appropriate in light of the amendments to the SIS Regulations and recent technological developments.
Budget superannuation changes: factsheets
As detailed in ASFA Action issue 601, the Federal Budget on 3 May proposes significant and extensive changes to many aspects of the superannuation system. The government has now made available a set of factsheets outlining its major superannuation proposals.
