Welcome to the latest issue of the KHQ Super Alert. This week ASIC released an ESG-related speech made by its Chair and the Federal Government outlined its expectations of APRA. ASIC has also delayed the start date for registration of financial advisers.
Government – Statements released relating to APRA expectations
On 7 June 2023, the Government released an updated statement of expectations (SOE) for APRA. The SOE ‘focuses on APRA’s role in ensuring a safe, resilient and competitive financial system’ and now requires APRA ‘to consider risks related to climate change’ when carrying out its ‘responsibilities in regulating banks, insurance companies and superannuation funds’.
On the same day, APRA released its responding statement of intent (SOI) which outlines how it will manage its relationship with the Government, other regulatory agencies and the industries it regulates. The SOI outlines APRA’s continuing focus on ongoing industry resilience and promoting ‘prudent practices and transparency in relation to climate-related risks’. APRA also outlined its intention to continue requiring ‘superannuation transparency and efficiency’ by seeking to ‘reduce the level of exposure of superannuation members to underperforming funds and funds with sub-standard practices including in relation to expenditure’.
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Legislation – Instrument determining APRA infringement officers
On 7 June 2023, the Superannuation Industry (Supervision) (Infringement Officers) Determination 2023 (2023 Determination) was registered on the Federal Register of Legislation. The 2023 Determination repeals and replaces the 2013 internal APRA instrument known as Determination that APRA staff members of a class are to be infringement officers. The 2013 instrument was never registered under the Legislation Act 2003 (Cth) and therefore never took effect. The 2023 Determination specifies the class of APRA staff members who ‘are to be infringement officers for the purposes of exercising powers under Part 22 of the [SIS Act] in relation to a contravention of a provision that is subject to an infringement notice under that Part’.
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ASIC – Speech in relation to ESG investing
On 5 June 2023, ASIC released a speech given by its Chair, Joe Longo, in relation to environmental, social and governance (ESG) considerations when investing. The speech touched on three key areas of focus for ASIC – ‘governance, greenwashing and growth in sustainable financing’. Mr Longo reiterated that mandating climate disclosures is a priority for the Government and noted that the first two standards created by the International Sustainability Standards board should be issued by the end of June. These standards will be on ‘general sustainability requirements and climate-related financial disclosures’.
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Legislation – Senate Committee report in relation to financial adviser registration
On 2 June 2023, the Senate Economics Legislation Committee (Committee) released its report in relation to the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 (see our Super Alert from 17 February 2023). Relevantly to superannuation, the Committee recommended that Schedule 1 ‘be passed unamended’. Schedule 1 deals with the registration of financial advice providers and assisted decision-making processes for ASIC.
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ASIC – Financial adviser registration date delayed
On 30 May 2023, ASIC announced that it is ‘extending the date by which financial advisers must be registered to 1 October 2023’. ASIC considers that a further delay to the registration date will allow time for:
- ‘Parliament to consider the improvements proposed by the [Treasury Laws Amendment (2023 Measures No. 1) Bill 2023]’ (see above item);
- ‘ASIC to assist the financial advice industry to understand and comply with the registration requirement by issuing regulatory guidance and conducting webinars’; and
- AFS licensees ‘to understand the registration requirement and to make necessary applications to register their relevant providers with ASIC’.
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This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
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