Super Alert – 26 March 2021

Welcome to the latest issue of the KHQ Super Alert. This week APRA released additional material in relation to its data transformation project, while ASIC issued three instruments relating to advice fee consents and independence disclosures.  The temporary relief in relation to the electronic execution of company documents also expired this week.

KHQ Lawyers - Super Alert

APRA – Data transformation project update

On 25 March 2021, APRA released a response paper and the final reporting standards in relation to its superannuation data transformation project. According to APRA, the finalised reporting standards cover the ‘structure and profile [of RSEs], performance, member demographics, expense management, asset allocation, insurance arrangements, and fees and costs’, as well as amendments proposed by the Your Future Your Super reforms. For example, Reporting Standard SRS 705.1 ‘Investment performance and objectives’ requests data in relation to ‘trustee directed products’ which is a concept that is proposed to be introduced by the Your Future, Your Super reforms.

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ASIC – Instruments for advice fee consents and independence disclosures

On 24 March 2021, three legislative instruments were registered by ASIC on the Federal Register of Legislation. These were:

  • ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124;
  • ASIC Corporations (Disclosure of Lack of Independence) Instrument 2021/125; and
  • ASIC Superannuation (Consent to Pass on Costs of Providing Advice) Instrument 2021/126.

In an associated media release on 25 March 2021, ASIC explained that the instruments ‘deal with advice fee consents and independence disclosure’ under the Financial Sector Reform (Hayne Royal Commission Response No.2) Act 2021. The Act requires ASIC to make legislative instruments for:

  • ‘the written consent that a fee recipient must obtain from a client before deducting, or arranging to deduct, advice fees from a client account as part of an ongoing fee arrangement’;
  • ‘the disclosure of lack of independence that an Australian Financial Services (AFS) licensee or authorised representative must give clients where they would breach s923A of the Corporations Act if they used words such as “independence”, “impartial”, or “unbiased”’; and
  • ‘the written consent that a superannuation trustee must obtain from a member before deducting advice fees from a superannuation account under a non-ongoing fee arrangement’.

All instruments commence operation on and from 1 July 2021.

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Parliament – Expiry of temporary relief for electronic execution of documents

On 21 March 2021, the Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 was automatically repealed on the Federal Register of Legislation. As referred to in our Super Alert of 25 September 2020, this determination had continued the effect of Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 which allows companies to:

  • use electronic signatures for the purposes of execution of documents pursuant to the Corporations Act 2001 (Cth); and
  • hold meetings required by the Corporations Act 2001 (Cth) virtually, rather than face-to-face.

The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 proposes to allow ‘companies to execute documents, hold meetings, provide notices relating to meetings and keep minutes using electronic means or other alternative technologies until [15] September 2021’ (amongst other things), however it is currently before the Senate and has not been passed. Accordingly, there is now some uncertainty as to whether section 127 of the Corporations Act 2001 (Cth) permits a company to execute documents electronically.

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KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in the superannuation and financial services team, and has a broad range of experience working with a range of superannuation fund trustees, superannuation administrators,... Read More

KHQ Lawyers - Natalie Cambrell

Natalie Cambrell Principal Solicitor

Natalie Cambrell leads our superannuation and financial services team.  With more than 20 years’ experience, she has an enviable reputation for her in-depth knowledge in these highly regulated and... Read More