Super Alert – 16 September 2022: Financial Accountability Regime Minister Rules 2022, planned changes to prudential framework


Posted By and on 16/09/22 at 2:16 PM

Welcome to the latest issue of the KHQ Super Alert. It was a quieter week in superannuation this week. Treasury released for consultation the Financial Accountability Regime Minister Rules 2022 and the proposed amendments to the performance test regulations for faith-based products. APRA has outlined its plans to modernise the prudential architecture. 

Treasury – Released for consultation: Minister Rules for the Financial Accountability Regime

On 12 September 2022, Treasury released an exposure draft version of the Financial Accountability Regime Minister Rules 2022 (Minister Rules) for consultation. As referred to in our Super Alert of 9 September 2022, the Financial Accountability Regime Bill 2022 (FAR Bill) deals with a number of recommendations of the Financial Services Royal Commission including introducing the Financial Accountability Regime to the superannuation sector.

According to Treasury, the ‘Minister Rules support the FAR Bill and would prescribe:

  • particular responsibilities and positions which cause a person to be subject to the FAR in the banking, insurance and superannuation sectors
  • the enhanced notification threshold, which is the total asset size above which an entity is required to comply with additional notification obligations and
  • the way that a written record can be authenticated in a proceeding as prima facie evidence of the statement it records’.

The consultation closes on 7 October 2022.

Click here for details.

Treasury – Proposed amendments to performance test for faith-based products 

On 12 September 2022, Treasury commenced the consultation process for the Superannuation Industry Supervision Amendment (Annual performance assessments – Faith-based products) Regulations 2022. The primary legislation was introduced to Parliament on 8 September 2022 after a period of consultation earlier this year (see our Super Alert of 22 July 2022).

‘The regulations:

  • prescribe additional information that must be provided in an application for faith-based product status
  • set out how APRA is to operate the supplementary performance test for these products
  • set out when APRA must notify trustees of the supplementary test result’.

The consultation closes on 7 October 2022.

Click here for details.

APRA – Planned changes to prudential framework  

On 12 September 2022, APRA issued a media release and information paper, outlining its plans to modernise the prudential architecture for banks, insurers and superannuation funds. According to APRA, the multi-year program, which commenced last year, ‘continues to underpin financial safety and stability in a rapidly changing economic and technical environment’. APRA Chair Wayne Byres is quoted as saying that APRA’s ‘end-goal is a digital framework that will be easier for industry to understand and comply with, and for APRA to supervise and maintain – and ultimately to better protect Australians’ financial interests’.

The initiatives focus on:

  • ‘Better regulation – ensuring prudential standards and guidance are easier to navigate, understand and implement;
  • Digital first – exploring how to use technology to support better regulation; and
  • New risks, new rules – developing new approaches to tackle emerging risks and new business models on the regulatory perimeter’.

Click here for details.

Parliament – Disallowance motion of annual member meeting notice regulations 

On 6 September 2022, Senator David Pocock issued a notice that he intends to move that the the Superannuation Industry (Supervision) Amendment (Annual Members’ Meetings Notices) Regulations 2022 (AMM Notice Regulations) registered on 2 September 2022 be disallowed (see our Super Alert of 9 September 2022). If the AMM Notice Regulations are disallowed, the requirements for AMM notices will revert to those set out in the Superannuation Industry (Supervision) Regulations 1993 prior to the AMM Notice Regulations being registered.

Click here for details.

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KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in our Superannuation & Financial Services team, and has a broad range of experience working with a range of superannuation fund trustees... Read More

KHQ Lawyers - Natalie Cambrell

Natalie Cambrell Director

Natalie leads our Superannuation & Financial Services team. With more than 25 years’ experience, she has an enviable reputation for her in-depth knowledge in these highly regulated and complex... Read More