Welcome to the latest issue of the KHQ Super Alert. This week ASIC released a report summarising its insights from the new breach reporting regime. ASIC commenced its first ‘greenwashing’ action against a company, and superannuation rules will largely remain unchanged following the Federal Budget announcements.
ASIC – Breach reporting review report
On 27 October 2022, ASIC released Report 740 ‘Insights from the reportable situations regime: October 2021 to June 2022’. This is the first publication of information reported under the breach reporting regime which came into effect in October 2021.
According to ASIC, it received 8,829 reports in the relevant period. Despite the number of reports received being higher than under the previous regime, ASIC has indicated that ‘a much smaller proportion of licensees have reported under the regime than anticipated’ with only 9% of licensees lodging a report during the 9-month period. Superannuation trustees lodged a total of 330 reports.
Staff negligence or error was the most common category of root cause at 60% of total reports, with policy or process delivery coming in at second place (9%). ASIC has said it will provide guidance for ‘licensees on the circumstances in which it is appropriate to select ‘staff negligence or error’ as the root cause’.
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ASIC – First greenwashing action
On 27 October 2022, ASIC issued a media release announcing it had taken its first action against a listed energy company for ‘greenwashing’. ASIC Deputy Chair Sarah Court said that ‘ASIC is currently investigating a number of listed entities, super funds and managed investment funds in relation to their green credentials claims. Companies are on notice that ASIC is actively monitoring the market for potential green washing and will take enforcement action, including Court action, for serious breaches’.
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Parliament – Regulations on Annual Member Meeting Notices to remain in force
On 25 October 2022, the Senate negatived the motion brought by Senator David Pocock to disallow the Superannuation Industry (Supervision) Amendment (Annual Members’ Meetings Notices) Regulations 2022 (see our Super Alert of 16 September 2022 for further information about the disallowance motion). These regulations amend the disclosure requirements relating to expenditure in annual members’ meeting notices (AMM notices). These regulations are already in force and apply for AMM notices for an income year ending on or after 30 June 2022 and issued on or after 9 September 2022 (See our Super Alert of 9 September 2022).
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Treasury – Federal Budget announcements
On 25 October 2022, the following superannuation-related measures were announced as part of the Federal Budget: the eligibility age for making downsizer contributions to superannuation will reduce ‘from age 60 to 55 years of age’ (as previously announced); and a Housing Accord will be introduced ‘to support funding of an additional 10,000 affordable homes’. The Government proposes to ensure that this measure also facilitates ‘institutional investment, including by superannuation funds, in affordable homes’.
Separately, the Government has advised that it ‘will not proceed with…[the] measure that proposed introducing a requirement for retirement income product providers to report standardised metrics in product disclosure statements’.
In addition, the Commonwealth penalty unit will increase on 1 January 2023 from the current $222 to $275.
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Parliament – FAR Bills move to Senate
On 25 October 2022, the following Bills moved to the Senate and were read for a second time:
- Financial Accountability Regime Bill 2022;
- Financial Services Compensation Scheme of Last Resort Levy Bill 2022;
- Financial Sector Reform Bill 2022; and
- Financial Services Compensation Scheme of Last Resort Levy (Collection) Bill 2022.
(On 24 October 2022, the Senate Economics Legislation Committee had recommended that all the Bills be passed.)
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Attorney-General – Proposed amendments to Privacy Act
On 22 October 2022, the Attorney-General’s department issued a media release outlining the Government’s intention to introduce legislation which will ‘significantly increase penalties for repeated or serious privacy breaches’ of privacy law. The proposed Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 ‘will increase the maximum penalties that can be applied under the Privacy Act 1988’. The current penalty sits at $2.22 million; the new penalty will be ‘whichever is the greater of:
- $50 million;
- three times the value of any benefit obtained through the misuse of information; or
- 30 per cent of a company’s adjusted turnover in the relevant period’.
It is proposed that the Bill will be introduced to Parliament next week.
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ASIC – Cost recovery implementation statement 2021/22
On 21 October 2022, ASIC issued a media release advising that it has released its ‘Cost Recovery Implementation Statement’ for 2021/22. This report sets out ‘ASIC’s estimated levies by industry sector and subsector’. The final levies ‘will be published in December 2022 and invoiced between January and March 2023’.
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This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
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