Welcome to the latest issue of the KHQ Super Alert. Federal Parliament resumed this week and considered a superannuation-related Bill of miscellaneous amendments. APRA commenced consultation on a new prudential standard relating to operational risk management and provided further information about APRA’s upcoming release of superannuation data publications.
ASIC – Enforcement update for April to June 2022 released
On 28 July 2022, ASIC issued its enforcement and regulatory update for the second quarter of 2022. ASIC has reported that so far this year, over $145 million in civil penalties have been imposed by the courts and 40 civil penalty cases are still progressing before the courts. Additionally, ‘[i]n an Australian first, ASIC successfully took action in the Federal Court against an entity for failing to adequately manage cyber risk’.
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APRA – Consultation for new operational risk management prudential standard
On 28 July 2022, APRA released a new cross-industry standard for consultation. The proposed Prudential Standard CPS 230 Operational Risk Management (CPS 230) ‘set[s] out minimum standards for managing operational risk, including updated requirements for business continuity and service provider management’. APRA considers operational risk to mean ‘the potential for financial loss or material disruption as a result of inadequate or failed internal processes or systems, the actions of people or external drivers and events, such as a pandemic or natural disaster’.
The consultation period closes on 21 October 2022. APRA expects that the standard will come into force from 1 January 2024.
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Parliament – Bill in relation to various amendments to Treasury laws
On 27 July 2022, the Treasury Laws Amendment (2022 Measures No. 1) Bill 2022 (Cth) was introduced to the House of Representatives. The Bill proposes to:
- amend ‘the AFCA Act to facilitate the closure and any transitional arrangements associated with AFCA replacing the SCT’ by providing ‘for the transfer of records and documents from the SCT to ASIC, the remittal of matters on appeal by the Federal Court, and [introducing] a rule-making power to allow the Minister to prescribe other matters of a transitional nature’; and
- amend the Social Security Act 1991 (Cth) and Veterans’ Entitlements Act 1986 (Cth) ‘to provide for certain commutations for the purposes of not exceeding the transfer balance cap. These amendments apply to market-linked and life expectancy products only’.
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ATO – Requests by members for financial hardship requests
On 26 July 2022, the ATO issued a reminder to trustees in relation to financial hardship requests. The ATO has reminded trustees that ‘people experiencing severe financial hardship or wanting to access their superannuation to assist with general expenses…do not meet the grounds for compassionate release’. The ATO has restated the rules in relation to releasing benefits under sever financial hardship and noted that these requests must be made ‘by members to their funds’.
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APRA – Resignation of APRA Chair
On 26 July 2022, the Treasurer issued a media release in relation to the resignation of the Chair of APRA, Mr Wayne Byres. Mr Byres’ resignation is effective from 30 October 2022. A process to select the next chair will be undertaken.
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APRA – Response to consultation on superannuation data reporting
On 25 July 2022, APRA released a response paper and submissions to its ‘consultation on the publication and the confidentiality of data reported under the new superannuation reporting standards’. According to APRA, it ‘will launch a series of new superannuation data publications from September 2022’. These publications ‘will comprise new and expanded data on an industry, fund and product basis’. In addition, the information will capture ‘fees and costs, asset allocation and performance data for all products and investment options as well as information on insurance arrangements, expenses, [and] member demographics’.
APRA considers that the data ‘will enable industry stakeholders more effectively to assess the risks, operations, performance and efficiency of superannuation funds…[and] promote better industry practices through comparability and peer review, and the sharing of key metrics will drive greater accountability of superannuation trustees’.
Click here for details.
Treasury – Consultation in relation to guidance for Payment Times Reporting Scheme
On 22 July 2022, Treasury released for public consultation three draft guidance notes in relation to the Payment Times Reporting Scheme (which captures superannuation funds). Treasury has advised that the ‘guidance is intended to assist reporting entities to meet their obligations and understand our expectations when undertaking compliance activities. The need for updated guidance was identified after reviewing enquiries and reports from the first year of operation of the scheme’.
The consultation period closes on 2 September 2022.
Click here for details.
Reminder
ASFA members are invited to attend the first in-person ASFA legislation discussion group for 2022. The session will be held at our offices over lunch on Tuesday 16 August and will include a presentation from AFCA. You can register for the session here.
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