Welcome to the latest issue of the KHQ Super Alert. The re-introduction of the Financial Accountability Regime is the most significant news this week. Further, in a worthy endeavour arising from an ongoing review by the Australian Law Reform Commission, Treasury has released for consultation some draft legislation designed to help reduce the complexity of Australia’s corporations and financial services laws.
Parliament – FAR and CSLR Bills re-introduced to Parliament
On 8 March 2023, the following Bills were introduced to Parliament in the House of Representatives:
- Financial Accountability Regime Bill 2023 (FAR Bill);
- Financial Accountability Regime (Consequential Amendments) Bill 2023;
- Financial Services Compensation Scheme of Last Resort Levy (Collection) Bill 2023;
- Financial Services Compensation Scheme of Last Resort Levy Bill 2023; and
- Treasury Laws Amendment (Financial Services Compensation Scheme of Last Resort) Bill 2023.
The first four Bills have replaced the 2022 versions of these Bills as summarised in our Super Alert of 9 September 2022. In his second reading speech for the Bills, the Assistant Treasurer and Minister for Financial Services, Stephen Jones MP, stated that these Bills have ‘the same objectives’ as the 2022 Bills. However, he noted that there are two material changes which means ‘reintroducing the bills in the way we are doing today is the neatest, lawful path to the agreed objective’.
The two material changes are:
- the Compensation Scheme of Last Resort (CSLR) no longer being ‘fit for purpose’ because the one-off levy to be charged to entities to fund the CSLR has ‘significantly increased’, due to ‘a material event’ in the market – so the Bill requires minor amendments; and
- ‘the government [has] decided…to articulate more clearly the scope of the minister’s exemption power and to provide for parliamentary oversight’ under the FAR Bill.
In relation to the CSLR Bills, Mr Jones stated that ‘passage of the legislation in March 2023 will facilitate the CSLR being operational from December 2023; any delay in the passage of this legislation will mean that the Compensation Scheme of Last Resort will not be operational and available to pay claims this year’.
Click here, here, here, here and here for details.
Treasury – Consultation on additional improvements to corporations and financial services law
On 6 March 2023, Treasury released two sets of exposure draft regulations for consultation. These regulations, titled Treasury Laws Amendment (Measures for Consultation) Regulations 2023: ALRC Financial Services Interim Report Tranche 2 (ALRC Regulations) and Treasury Laws Amendment (Modernising Business Communications) Regulations 2023 (MBC Regulations) are intended to ‘help reduce the complexity of Australia’s corporations and financial services laws’.
The MBC Regulations ‘contain consequential amendments required following the changes to primary law contained in the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022’ (as summarised in our Super Alert of 25 November 2022) and make amendments to:
- improve the ‘technology neutrality’ of Treasury portfolio laws, ‘including ensuring that certain documents can be sent in either physical or electronic form’; and
- ‘remove prescriptive requirements to publish notices in newspapers in favour of a technology neutral standard of publication’.
The ALRC Regulations contain amendments that are required as a result of the proposed changes contained in the Treasury Laws Amendment Bill 2022: ALRC Financial Services Interim Report Tranche 2 which was previously released for consultation (see our Super Alert from 16 December 2022). They will partially implement the following ‘recommendations from the ALRC’s Interim Report B’:
- ‘repeal redundant and spent regulations’;
- ‘remove substantive obligations out of definitions’; and
- ‘amend unclear or incorrect regulations’.
Consultations will close on 3 April 2023.
Click here for details.
APRA – Letter on SDT minor amendments consultation
On 3 March 2023, APRA released a letter to RSE licensees in ‘response to feedback received on proposed minor amendments to reporting standards introduced under Phase 1 of the Superannuation Data Transformation (SDT)’. Accompanying the letter were the marked-up final reporting standards and a summary of the changes made in response to industry consultation. See our Super Alert from 11 November 2022 for details on the discussion paper APRA previously released for consultation.
According to the letter, ‘[s]ubmissions were generally supportive’ but raised issues ‘relating to the proposed implementation timeframes’. In response, APRA has, among other things, adjusted ‘some implementation timeframes’, increased ‘timeframes for investment option reporting for specified reporting tables from 35 days to 40 days’, and ‘revised the Phase 2 consultation timeline’. The first consultation period for Phase 2 of the SDT is scheduled for May to June 2023.
Click here and here for details.
This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
Want KHQ Super Alerts delivered straight to your inbox each week? Click here to subscribe.
