Welcome to the latest issue of the KHQ Super Alert. This week, Treasury released three consultation packages related to simplifying the Corporations Act and changing education requirements for financial advisers. APRA issued superannuation statistics for the June 2022 quarter and the main discussion points from a recent Superannuation CEO Roundtable.
APRA – Notes from August Superannuation CEO Roundtable
On 24 August 2022, APRA published a summary of the Superannuation CEO Roundtable which it hosted jointly with ASIC on 12 August 2022. According to APRA, the focus of the meeting was the retirement income covenant and the two regulators ‘shared their early observations of the varying levels of detail in trustees’ website summaries of their retirement income strategies’. The main items raised by the CEOs were:
- ‘lessons learnt from preparing the first retirement income strategy and using data to design a strategy that is fit for the specific needs of their membership base’;
- ‘the importance of understanding the range of factors that contribute to good retirement outcomes for members and the challenges of assessing external factors impacting retirement which are not captured by fund data’; and
- ‘the importance of continually adapting…to accommodate for the needs of their membership base and ensuring that there are appropriate engagement channels and infrastructure designed to service members transitioning into retirement and throughout retirement’.
Click here for details.
Treasury – Draft legislation released to simplify corporations law
On 24 August 2022, Treasury released an exposure draft Bill and regulations which seek to implement ‘formal recommendations and informal suggestions made by the Australian Law Reform Commission (ALRC) in Interim Report A of its Review of the Legislative Framework for Corporations and Financial Services Regulations’. The amendments seek ‘to reduce the complexity of Australia’s corporations and financial services laws by making these laws more adaptive, efficient and navigable within existing policy settings’. For example, the draft Bill proposes to delete many obsolete definitions used in the Corporations Act 2001 (Cth).
The consultation period closes on 20 September 2022.
Click here for details.
Treasury – Draft legislation released to incorporate ASIC instruments into corporations law
On 24 August 2022, Treasury released an exposure draft Bill and regulations which propose ‘to move matters in legislative instruments made by the Australian Securities and Investments Commission (ASIC) into the primary law and regulations’. The aim of the draft legislation is to ‘provide greater certainty making it easier for stakeholders to identify their rights and obligations under the financial services law’. For example, it is proposed that ASIC Corporations (Financial Services Guide Given in a Time Critical Situation) Instrument 2022/498 be captured within section 941E of the Corporations Act 2001 (Cth).
Click here for details.
Treasury – Consultation paper in relation to education for financial advisers
On 23 August 2022, Treasury released a consultation paper in relation to the implementation of an election commitment by the Government for financial adviser education requirements. The Government has committed to ‘remove tertiary education requirements for financial advisers who have passed the exam, have 10 years’ experience and a clean record of financial practice’. The consultation paper is an ‘opportunity to explore the requirements for new entrants to ensure that they remain appropriate and continue to facilitate improvements in the quality of financial advice’.
The consultation period closes on 16 September 2022.
Click here for details.
APRA – Superannuation statistics released for quarter ending June 2022
On 23 August 2022, APRA released the quarterly superannuation statistics for the period ending June 2022. According to APRA, there was ‘a 0.5 per cent decrease’ in total superannuation assets over the past year. This is due to ‘volatility in financial markets following global interest rate increases in response to high levels of inflation, constrained supply chains and the ongoing uncertainty due to the conflict in Ukraine’. There was however a 15.2% increase in contributions from the previous year, ‘likely reflecting unemployment rates having dropped to record lows over the year’ and the ‘increase in the Superannuation Guarantee contribution rate’.
Click here for details.
ASIC – Speech in relation to ASIC’s priorities for coming year
On 23 August 2022, ASIC published a speech delivered by its Chair, Mr Joseph Longo, setting out ASIC’s areas of focus for the year ahead. Mr Longo’s comments included:
- one of the ‘identified four external strategic priorities’ is ‘retirement decision making, with a focus on superannuation products, managed investments and financial advice’; and
- in terms of DDO, ASIC has ‘now shifted [its] focus from facilitating implementation to active supervision and enforcement’ and is ‘conducting a surveillance of a sample of TMDs in the superannuation and managed funds sectors, and engaging with major supervised institutions on how they are implementing DDO’.
The speech was related to a release on the previous day of ASIC’s Corporate Plan for 2022 to 2026.
Click here and here for details.
Parliament of WA – Family law amendments for de facto superannuation splitting
On 18 August 2022, the Family Court Amendment Bill 2022 (WA) was passed by both Houses of Parliament in Western Australia and is now awaiting Royal Assent. According to the Explanatory Memorandum, the Bill ‘amends the Family Court Act 1997 (WA) to facilitate the exercise of federal jurisdiction in respect of the superannuation interests of separating de facto couples in family law proceedings in Western Australia’.
Click here for details.
Treasury – Consumer Data Right expansion to non-banking areas
On 19 August 2022, the final report from Treasury in relation to ‘the designation of the non‑bank lending sector’ for the Consumer Data Right was released. The key item for trustees to note is that in the final report, Treasury advised that it ‘will progressively assess the other sub-sectors of Open Finance over the coming year [for the application of the Consumer Data Right], commencing with superannuation’.
Click here for details.
Want KHQ Super Alerts delivered straight to your inbox each week? Click here to subscribe.
