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Having passed the Lower House last week with an amendment, the Your Future Your Super draft legislation has gone to the Senate for possible debate in the next sitting fortnight, beginning 15 June.
Despite the government’s 11th hour amendment which removed the contentious ‘power to ban’ measure, AIST remains deeply concerned about many aspects of the Bill.
We are now actively engaging with relevant stakeholders about the potential for consumer harm from carve outs in the bill that will see millions of Australians stapled to underperforming funds. We are also concerned that the bill contains a broad regulation-making power that would allow the government to determine by regulation what is and isn’t in the best financial interests of members.
Last week’s Senate Economics Legislation Committee Estimates meeting saw APRA and ASIC grilled on a range of hot-button super issues as both Liberal and Labor senators sought information on everything from the cost of the super tax concessions and the sole purpose test through to ASIC’s view on how funds will pay for penalties.
As outlined in the Committee transcript released this week, Liberal senator Andrew Bragg explored a wide range of issues with both regulators which included seeking their views on the New Daily (pg 59 and 75); the Hostplus-Maritime merger (pg 73); and whether funds can use reserves to pay regulator fines (pg 60).
In response to a question from Senator Bragg (page 74) on APRA’s view of super funds engaging in “political advertising”, APRA deputy chair, Helen Rowell referred to the words of Commissioner Hayne in the royal commission, “which were that not all advertising is inappropriate”.
“If there are policy changes that might adversely affect members' retirement outcomes then there is an argument that they would be consistent with the legislative obligations of trustees,” she added.
Questioning from Labor senator Jennifer McAllister (page 73) focused on APRA’s plans for the Chioce heatmaps.
Ms Rowell confirmed APRA aimed to release its first heatmap for multisector Choice products in the last quarter of the year. She said APRA’s preliminary analysis showed there were high fee choice products that were underperforming.
AIST is seeking greater clarity on ASIC’s breach reporting regime, to assist licensees in meeting their new obligations.
While AIST’s submission on ASIC’s CP 340 breach reporting regime broadly supports the new regime, AIST recommends further enhancements to the guidance on what constitutes ‘core obligation’, ‘significance’, ‘material loss or damage’, and requirements relating to ‘investigations’.
AIST also points to the short implementation time given to licensees, noting ASIC’s intention to release final guidance three months prior to the obligations commencing.
AIST is hosting a webinar on the changes to breach reporting, presented by Scott Charaneka from Thomson Geer on 25 June at 11am. The webinar is complimentary for AIST members, and an email will be sent in the next few days with details on how to register.
AIST’s submission to Treasury warns that proposed regulatory changes to proxy advisers will not be in members’ best interests.
While AIST supports transparency and accountability regarding proxy voting, our submission notes that if implemented, the prescriptive nature of the detailed recommended disclosure regime and additional regulation on the ownership structure of proxy advisors, would result in the undermining of trustees’ capacity to act in members’ best financial interests.
Noting there is no evidence of systematic problems or material errors in the proxy voting service offerings in Australia, AIST questions what regulatory failures the Consultation Paper is seeking to fix. Furthermore, the options outlined are out of step with practices in the USA and the UK.
AUSTRAC has released a guide on ‘cuckoo smurfing’ a method of money laundering that relies on exploiting the bank accounts of customers expecting to receive legitimate funds. These customers are often unaware that the funds transferred into their accounts are the proceeds of crime.
The guidance explains how ‘cuckoo smurfing’ takes place, and specific indicators to help remittance service providers, banking and financial services businesses understand, identify and report suspicious transactions related to this activity.
APRA has published further information to assist entities in getting ready for APRA Connect, including user guidance.
The APRA Connect test environment will be available from 17 June for users to become familiar with APRA Connect and trial submission of data for industries with new collections on APRA Connect before they need to submit in the APRA Connect production environment from 13 September 2021.
The ATO has updated its Superannuation Changes Industry roadmap which provides a useful overview of the changes impacting the industry. This information details the changes affecting the super industry up until the end of June 2022. This information is updated every quarter or when there are major changes or announcements.
The ATO has released an Explanatory Statement on new data matching rules.
The rules support the Data-matching Act and provide privacy safeguards for the use of tax file numbers and other personal information in income compliance data matching programs, by setting out certain responsibilities that must be met by agencies that participate in regulated data matching programs.
The objective of the Rules is to ensure that the use of data-matching is based on clear and publicly known standards. The Rules provide for monitoring by the Information Commissioner of technical standards for data-matching programs and for privacy safeguards for individuals affected by the outcomes of data-matching.
The Parliamentary Joint Committee on Intelligence and Security’s public hearings on the Security Legislation Amendment (Critical Infrastructure) Bill 2020 is set to get underway tomorrow.
The Committee will hear from representatives from the Law Council of Australia, Office of the Inspector-General of Intelligence and Security, Commonwealth Ombudsman, Office of the Victorian Information Commissioner, Office of the Australian Information Commissioner, Department of Home Affairs and Australian Signals Directorate.
The Government has released the Council of Financial Regulators' (CFR) review into Financial Market Infrastructure (FMI) Regulatory Reforms.
The release of the CFR's report follows the announcement in the 2021-22 Budget that the Government will, in line with the report's recommendations, introduce an FMI regulatory reform package to ensure financial regulators have sufficient powers to intervene to manage a crisis and pre-emptively identify and manage risks.
FMIs include financial markets, clearing and settlement facilities, benchmark administrators and derivative trade repositories.
The Financial Services Council and the Australian Financial Complaints Authority have appointed Ms Jan McClelland AM as Chair of the Life Code Compliance Committee (LCCC).
The LCCC, established in 2017, is the independent body responsible for overseeing compliance with the FSC Life Insurance Code of Practice, the industry’s first consumer facing code.
Ms McClelland, who is currently the Deputy Chancellor of the University of New England, Chair of the Gateway Network Governance Body, and a member of the Advisory Board of the NSW Circular Economy Innovation Network, replaces Anne Brown ,who completed her three year appointment this year.
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.
10 June 2021