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The Senate Economics Legislation Committee - Treasury Laws Amendment (Your Future, Your Super) Bill 2021 [Provisions] Progress report which was due to be released today, has been delayed to 29 April 2021.
The regulations accompanying the legislation, which contain substantial and important detail on the operation of the proposed laws, have yet to be released.
The Australian Prudential Regulation Authority (APRA) has released for consultation its draft guidance to banks, insurers and superannuation trustees on managing the financial risks of climate change.
The draft Prudential Practice Guide CPG 229 Climate Change Financial Risks (CPG 229) is designed to assist APRA-regulated entities in managing climate-related risks and opportunities as part of their existing risk management and governance frameworks. The Guide has been developed in response for requests for greater clarity on regulator expectations.
The guidance covers APRA’s view of sound practice in areas such as governance, risk management, scenario analysis and disclosure. The PPG does not create new requirements or obligations. APRA intends for the PPG to be flexible in allowing each institution to adopt an approach that is appropriate for its size, customer base and business strategy.
CPG 229 is aligned with the recommendations from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) and was developed in consultation with both domestic and international peer regulators.
APRA is seeking stakeholder feedback on the draft CPG 229 by 31 July 2021. Subject to feedback, the final PPG is expected to be released before the end of 2021.
The draft CPG 229 and supporting resource links are available on the APRA website at: Consultation on draft Prudential Practice Guide on Climate Change Financial Risks
ASIC has issued Consultation Paper 340, seeking stakeholder feedback on proposed updates to its draft guidance on upcoming breach reporting reforms.
ASIC’s draft regulatory guide reflects reforms made to the breach reporting regime under the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (legislation.gov.au). These reforms clarify and strengthen the existing obligation on AFS licensees to self-report certain breaches of the law to ASIC and extend the obligation to credit licensees.
Set to commence on 1 October 2021, these key Government reforms flow from the Financial Services Royal Commission and findings from the ASIC Enforcement Review Taskforce.
ASIC is also seeking feedback on a draft information sheet on the new notify, investigate and remediate obligations set to apply to AFS licensees who are financial advisers and credit licensees who are mortgage brokers.
ASIC seeks public comment on the draft guidance and information sheet by 3 June 2021. AIST will arrange a roundtable with interested members to discuss the information sheet.
ASIC will publish final guidance before the obligations commence on 1 October 2021.
ASIC has released its enforcement update report for the period 1 July to 30 December 2020. A copy of the report - outlining key actions taken during the period to enforce the law and support ASIC’s enforcement objectives - can be found here.
In response to the Financial Services Royal Commission ASIC has put additional resources to referrals and case studies from the Commission. Specifically relating to superannuation, in September 2020, the Federal Court ordered two entities in NAB’s wealth management division – NULIS Nominees (Australia) Limited (NULIS) and MLC Nominees Pty Ltd (MLC Nominees) – to pay a total of $57.5 million in penalties for making false and misleading representations to superannuation members about plan service fees. This is the largest penalty imposed in a matter referred to ASIC by the Financial Services Royal Commission.
Rainmaker Information has released the findings of its inaugural ESG Superannuation Taxonomy Study as part of its latest Superannuation Benchmarking Report.
The report includes a framework that captures what it is about ESG super funds that makes them different. Using this Rainmaker found that there are 60 super funds that they identify as being an ESG super fund. These funds manage a combined $1.6 trillion, or 71% of all super assets in APRA regulated funds.
The report also identifies the top ESG super funds according to Rainmaker’s ESG Superannuation Taxonomy. Of the top 20, 17 are profit to member funds.
In her address to the 12th Annual Financial Services Council's Life Insurance Summit, Minister Hume, announced that rather than run a separate Life Insurance framework review, it would be combined with the Quality of Advice review.
The Minister said that Quality of Advice Review will be conducted by Treasury and will consider the full breadth of issues impacting on both quality and affordability of all forms of financial advice. ASIC will provide the data it is collecting currently on LIF to Treasury.
The review will address issues such as the degree of underinsurance in Australia, how to ensure access to affordable, quality advice. The review is expected to run until the end of 2022.
New figures show that while most Australians who withdrew their super last year spent it on mortgages and debt payments, 12% added the money to their savings.
The ABS’ Household Financial Resources report breaks down the main use of the lump sums accessed through the Early Release Scheme. It shows the majority of people (55.2%) used the super to pay their mortgage, rent or household bills (55.2%), while 14.7% paid off their credit cards or personal debt, 5.8% bought or paid off a car and 11.7% spent it on ‘other’, which the ABS says “includes purchased food or non-alcoholic beverages, medical services or supplies or other household services/supplies, and assisted family members”.
The remainder, or 12.7% of those accessing their super early, added it to their savings.
The report also showed that average balances for women are going backwards. While the mean balance for men had increased between 2019 and 2020 from $166,300 to $169,000 the mean balance for women had gone backwards – from $124,500 to $124,100, meaning the mean balance for men is 36% higher than women’s. This gap is also reflected in the women’s median balance of $50,000 is which also significantly less than the men’s median balance of $66,700.
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.
22 April 2021