Super Alert – 18 February 2022

Welcome to the latest issue of the KHQ Super Alert. This week, Parliament was particularly busy, passing two long-anticipated Bills that permanently allow for electronic document execution and remove the $450 monthly threshold for SG contributions. A Senate Committee has also recommended that the Bill to implement the Financial Accountability Regime be passed.      

ASIC – Consultation in relation to disclosure relief

On 18 February 2022, ASIC released Consultation Paper 358 called ‘Remaking ASIC relief on PDSs, superannuation dashboards and FSGs’. ASIC is proposing to ‘remake relief contained in seven legislative instruments relating to specific financial services disclosure requirements’. It is proposed that the relief will be remade into a single new instrument ‘to assist industry in complying with disclosure obligations by providing regulatory certainty’.

The consultation period closes on 12 April 2022.

Click here for details.

APRA – Guidance in relation to compliance risks

On 17 February 2022, APRA published an article titled ‘How to manage compliance risk and stay out of the headlines’. The articles explains that ‘compliance risk relates to an organisation’s ability to comply with the laws, rules, regulations and standards (both external and internal) which govern its operations…and the consequences that may flow if it fails to do so’. APRA has advised that good practice occurs where there is a mix of regulatory compliance subscription services which are supplemented with ‘input from compliance subject matter experts, to ensure that all obligations are captured and regularly updated’.

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Parliament – Senate report in relation to Financial Accountability Regime

On 15 February 2022, the Senate Economics Legislation Committee handed down its report in relation to the Financial Accountability Regime Bill 2021 (and other related Bills). The Committee ultimately recommended that all the Bills be passed and noted various matters such as:

  • Treasury is aware of ‘the uncertainty surrounding, and potential unintended consequences’ of the concept of significant related entity; and
  • APRA has advised that where there is a ‘possible duplication of laws and obligations’, there will ‘be processes and practices in place to ensure that, where there is a breach, the matter is dealt with appropriately under the FAR, so that an individual is not penalised for the same breach of conduct more than once’.

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ASIC – Financial advice misconduct compensation

On 14 February 2022, ASIC issued a media release advising that as at 31 December 2021, ‘a total of $3.15 billion in compensation… [has been paid or offered] to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice’ (ASIC’s emphasis).

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ASIC – Opening statement to Parliamentary Joint Committee on Corporations and Financial Services

On 11 February 2022, ASIC chair Joseph Longo issued an opening statement to the Parliamentary Joint Committee on Corporations and Financial Services. Mr Longo ‘summarised some key parts of ASIC’s work in recent months’, while also noting that in addition to its Corporate Plan, ASIC’s ‘strategic priorities’ for 2022 include:

  • ‘seeking remedies that deliver quicker outcomes, in cases that are chosen more carefully, following investigations that are more timely’;
  • focusing ‘on raising awareness of new and continuing regulatory obligations’;
  • continuing (in collaboration with the RBA, the Council of Financial Regulations and the ACCC) ‘to closely monitor and engage with ASX on the CHESS replacement program, particularly now [that] the program is in key testing and readiness phases’; and
  • progressing its ‘internal priorities – including [its] digital uplift, improving [its] communication with stakeholders…better use of data and cyber resilience’.

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Parliament – Public hearing in relation to trustee court applications for deed amendments

On 10 February 2022, the House of Representatives Standing Committee on Economics held a public hearing in relation to amendments to sections 56 and 57 of the SIS Act relating to trustee indemnity, and the recent various judicial advice applications. Whilst a number of points were made through the questioning process (including in relation to APRA’s role in some of the court proceedings and whether a contradictor was appointed), all participants noted the clear effect of the Courts’ decisions.

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Parliament – Bill facilitating changes to a suite of superannuation rules passes both Houses

On 10 February 2022, the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 (Bill) passed both Houses of Parliament. The Bill, which was discussed in our Super Alert of 29 October 2021, amends the following Acts:

  • Superannuation Guarantee (Administrative) Act 1992 ‘to remove the $450-a-month threshold before an employee’s salary or wages count towards the superannuation guarantee’;
  • Taxation Administration Act 1953 ‘to increase the limit on the maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme from $30,000 to $50,000’; and
  • Income Tax Assessment Act 1997 to:
    • ‘enable individuals aged 60 and above to make downsizer contributions to their superannuation plan from the proceeds of selling their home’;
    • ‘apply the work test to individuals aged between 67 and 75 who claim a deduction for personal superannuation contributions and allow such individuals to make or receive non-concessional superannuation contributions under the bring forward rule’; and
    • ‘enable superannuation trustees to choose their preferred method of calculating exempt current pension income when they have member interests in both accumulation and retirement phases for part, but not all, of the income year’.

Most changes are intended to commence on 1 July 2022.

Click here for details.

Parliament – Bill to allow permanent electronic document execution passes both Houses

On 10 February 2022, the Corporations Amendment (Meetings and Documents) Bill 2021 (Bill) passed both Houses of Parliament. We have previously discussed the Bill in our Super Alert of 22 October 2021, and all material proposed changes in that Alert have now been enacted. The Bill does stipulate however that new provisions that allow for meetings to be conducted solely through virtual meeting technology will ‘cease to have effect if a report (or reports) on the operation of those provisions is not tabled in parliament before a period of 30 months beginning on the day’ after Royal Assent is granted to the Bill.

The changes come into effect on either 1 April 2022, or the day after the Bill receives Royal Assent, whichever is later.

Click here for details.

KHQ Lawyers - Jordan Diamantopoulos

Jordan Diamantopoulos Lawyer

Jordan is a lawyer in our Litigation & Dispute Resolution team, with experience across the private and public sector. He commenced with KHQ as a graduate lawyer in 2021,... Read More

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