Welcome to the first issue of the KHQ Super Alert! This issue covers a range of developments, mainly from ASIC this week. Importantly, the new RG 272 on ASIC’s product intervention powers has now been released in final form.
ASIC – revised timetable of ongoing work
On 11 June 2020, ASIC published a revised timetable of ongoing work. It indicates adjustments to the work program previously announced by ASIC on 14 April 2020.
There are numerous superannuation-related matters noted in the updated table. The matters listed for the third quarter of the 2020 calendar year are as follows:
- IDR: publication of a new regulatory guide, RG 271 Internal dispute resolution;
- DDO: publication of regulatory guidance on product design and distribution obligations;
- RG 256: consultation on the review of ASIC’s remediation policy in RG 256 Client review and remediation conducted by advice licensees concerning ASIC’s proposal to extend the application of the policy beyond financial advice;
- RG 97: amending the transitional arrangements for PDSs to allow entities to come into the new disclosure regime from 30 September 2020 and require any PDSs given on or after 30 September 2022 to comply with the new disclosure regime; and
- FSRC: consulting on a new information sheet on how to apply for an AFSL and comply with licence obligations, pending introduction of legislation into Parliament connected with Financial Services Royal Commission recommendations 4.8: ‘Removal of claims handling exemption’ – to be done by the later of September 2020 or on introduction of the legislation into Parliament.
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ASIC – interim corporate plan
On 11 June 2020, ASIC issued a media release regarding its interim corporate plan including superannuation as a key workstream.
The superannuation priorities include insurance in superannuation, a review of intra-fund advice and thematic surveillance of trustee communications to members about the impact of the COVID-19 pandemic and resultant legislative measures.
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ASIC – COVID instruments end dates
On 12 June 2020, ASIC issued a media release regarding its addition of specific end dates into COVID instruments. It includes the ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355 which will be repealed on 15 October 2020, six months after it commenced.
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ASIC – cost recovery
On 12 June 2020, ASIC published a cost recovery implementation statement for feedback by 24 July 2020. ASIC states that ‘[t]he estimated costs are published to give industry an indication of what levy costs to expect’.
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Bill – Treasury Laws Amendment (2019 Measures No. 3) Bill 2019
On 17 June 2020, the Treasury Laws Amendment (2019 Measures No. 3) Bill 2019 passed both houses of Parliament. The Bill contains quite a number and range of technical changes including:
- an amendment to the SIS Act to clarify when a person has been ‘involved’ in a contravention of a provision;
- an amendment to the fee cap on low balances (brought about by the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019) to deal with circumstances when a product is only held for part of an income year;
- refinements to the reporting requirements under the Superannuation (Unclaimed Money and Lost Members) Act 1999;
- amendments to ensure that an account is not an ‘inactive low balance account’ if the member has elected to maintain insurance on that account under section 68AAA(2) of the SIS Act; and
- amendments to two of the exceptions to the definition of ‘inactive low balance account’ to ensure that they give effect to the policy intent.
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ASIC – new RG 272: product intervention powers
On 17 June 2020, ASIC issued a new regulatory guide (RG 272) giving guidance on the administration of its product intervention powers.
According to ASIC, ‘[t]he product intervention power is one of several regulatory tools available to ASIC to improve consumer outcomes. It allows ASIC to temporarily intervene in a range of ways, including to ban financial products … when there is a risk of significant consumer detriment.’
This guide ‘provides an overview of the product intervention power and explains:
- the scope of the power
- when and how ASIC may exercise the power to make a product intervention order
- how a product intervention order is made’.
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Bill – Superannuation Supervisory Levy Imposition Amendment Bill 2020
On 18 June 2020, the Superannuation Supervisory Levy Imposition Amendment Bill 2020 passed both houses of Parliament. The Bill increases the statutory upper limit on the superannuation industry supervisory levy collected by APRA to $10 million for the financial year commencing on 1 July 2020.
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Bill – Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019
On 18 June 2020, the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 was discussed in a Parliamentary ‘Committee of the Whole debate’ but remains before the Senate. The Bill proposes to amend the Superannuation Guarantee (Administration) Act 1992 to provide that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund.
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