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Consultation (Treasury)
Quality of Advice Review
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Consistent with recommendations 2.3, 2.5 and 2.6 of the Final Report of the Hayne Royal Commission, the Government is commissioning this Review which will consider how the regulatory framework could better enable the provision of high quality, accessible and affordable financial advice for retail clients.
The Review (‘QAR’) will not make recommendations on:
- professional standards for financial advisers
- Royal Commission Recommendations 2.7 to 2.10
- changes to the definitions of ‘retail client’, ‘wholesale client’, and ‘sophisticated investor’
- financial services redress arrangements or
- the application of taxation and privacy laws to financial advice
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Released 11 March 2022.
A report will be provided to the Government by 16 December 2022.
AIST has provided a submission for this consultation.
The Consultation period closed on 3 June 2022. 134 submissions were received for this consultation, including 17 confidential submissions. The (non-confidential) submissions made are on the QAR website.
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Consultation (Treasury) & (Board of Taxation)
Crypto asset secondary service providers: Licensing and custody requirements &
Review of the Tax Treatment of Digital Assets and Transactions in Australia
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The Government has announced consultations and inquiries for digital transactions and crypto assets.
On 21 March, the Treasurer, Josh Frydenberg, and the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, jointly announced that:
- Government has released a paper seeking industry’s feedback by the end of May on proposed new crypto asset licensing and custody requirements, and covering the first stage of a broader token mapping exercise to be completed by the end of 2022;
- Government has released the terms of reference for a review by the Board of Taxation into the appropriate policy framework for the taxation of digital transactions and assets such as crypto (which is being conducted on the basis it will not increase the overall tax burden). The Board has been asked to complete its review by 31 December; and
- the Government will release terms of reference covering its request for advice from the Council of Financial Regulators (CFR) on potential policy responses to address the issue of de-banking for financial technology firms, digital currency exchanges, and remittance providers. The CFR has been asked to provide advice to the Government by the end of June 2022.
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Treasury Consultation was opened on 21 March and closes on 27 May 2022.
Treasury Consultation has now closed.
The Board of Taxation Terms of Reference were also released on 21 March with a view to “report back to the Government by the end of 2022”
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Consultation (ASIC)
CP 363 - Remaking ASIC class order on financial requirements for retail OTC derivative issuers – [CO 12/752]
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CO 12/752 will sunset on 1 October 2022. ASIC is consulting on the Remaking, without amendment, of this instrument in order that the Class Order 12/752 continues to have effect. CO 12/752 prescribes the prudential conditions in relation to entering into, and holding, Over-the-counter (OTC) Derivatives.
Trustees will be aware that currently Consultation CP361 (re their previous consultation CP 334) is open in relation to the ASIC Derivative Transaction Rules (Reporting) provisions (see above).
Consultation 363 commenced 30 June and will end on 29 July 2022. The remade Class Order instrument will be issued prior to the sunsetting date of 1 October 2022. The Instrument will have effect until its expiration (sunsetting) on 1 October 2027.
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Consultation commenced 30 June 2022 and will end on 29 July 2022.
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Consultation (APRA)
Review of the amendments to the Superannuation Guarantee (Administration) Act 1992
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APRA has released a letter to registrable superannuation entity (RSE) licensees of Defined Benefit funds to seek their input on the amendments to the Superannuation Guarantee (Administration) Act 1992 (SGAA), commenced in September 2020.
The letter requests feedback regarding the amendments to the Choice of Fund requirements – and in particular, any unintended consequences for Defined Benefit arrangements.
Trustees may recall that the Treasury Laws Amendment (Your Superannuation, Your Choice) Act 2020 made amendments to the SG (Administration) Act 1992 (Schedule 1) and also described, in Section 4, that the legislated provisions are to be reviewed within 30 months - particularly in relation to any unintended consequences of the amendments in relation to DB Schemes.
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This consultation will be open for submissions until 8 September 2022.
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Consultations (APRA)
APRA strengthens transparency on remuneration and bank disclosures
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The cross-industry Prudential Standard CPS 511 was introduced last year to strengthen remuneration practices across the banking, insurance and superannuation industries. The implementation of CPS 511 is due in 2023 for large entities and 2024 for smaller entities.
APRA is consulting on disclosure and reporting proposals to support the implementation of CPS 511 which, once implemented, will provide greater transparency on remuneration practices across all APRA-regulated entities.
The Consultation relates principally to the disclosure and reporting obligations described in the Discussion Paper.
This Consultation further relates to APRA’s proposed changes to CPS 511 and the proposed Reporting Standard CRS 511 Remuneration and the Reporting template CRS 511.0.
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Submissions are requested, by APRA, by 7 October 2022.
Following review of industry feedback, APRA plans to finalise the requirements by the end of 2022.
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Consultation (Treasury)
Superannuation Annual Members' Meeting Notices
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The Government is consulting on draft regulations outlining proposed changes to the disclosure requirements for superannuation Annual Members' Meeting notices (principally to r2.10 of SISR).
The draft regulations contain proposed changes to:
- streamline the disclosure requirements by preventing the double-counting of political donation expenditure;
- align the definition of ‘related party’ with that used in the Australian Accounting Standards; and
- remove the requirement for itemised disclosure for certain categories of expenses.
It is hoped that providing members with simple and clear information will empower them to effectively engage with trustees during the meeting and improve member outcomes.
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The Commencement date of the requirements is where “the year of income ends on or after 30 June 2022”.
IF the draft regulations are approved as is, these Regulations will commence on the day after the end of the period of 7 days beginning on the day this instrument is registered.
The Consultation period ends on 28 July 2022.
AIST made a submission to this Consultation on 26 July 2022.
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Response to Consultation
A response to consultation and final Prudential Standard SPS 530 Investment Governance (SPS 530).
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APRA has released a response to consultation and final Prudential Standard SPS 530 Investment Governance (SPS 530). The letter issued follows the consultation released in September 2021 on APRA's proposed revisions to SPS 530 and addresses key concerns raised by industry.
It also outlines the updates implemented to SPS 530 to ensure better member outcomes by enhancing stress testing, valuation and liquidity management practices.
SPS 530 will commence on 1 January 2023.
The letter to industry, final prudential standard and non-confidential submissions are available on the APRA website.
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SPS 530 will commence on 1 January 2023.
AIST made a submission to this Consultation on 15 February 2022; many of the AIST recommendations have been adopted in the final version of the standard, specifically around wording that clarifies the role and delegations of the Board and management in investment decision-making and oversight.
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Consultation (Treasury)
Superannuation Performance Test Treatment of Faith-based Products
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The Government is seeking stakeholder views on exposure draft legislation to adjust how faith‑based superannuation products are treated under the annual performance test.
The legislation seeks to:
- require trustees to apply to APRA for faith‑based product status
- subject faith‑based products to a supplementary test that considers their faith‑based investment strategy, if they fail the original test
- exempt faith‑based products from the consequences of failure if they pass the supplementary test.
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Consultation will be open until 16 August 2022
Both the Exposure Draft Legislation and Explanatory Memorandum are available on the Consultation page.
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Response to Consultation
Proportionality and significant financial institutions
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On 4 April 2022, APRA commenced a consultation on minor amendments to align and centralise the definition of a significant financial institution (SFI) within the prudential framework.
Submissions to the consultation supported APRA’s objectives to align and centralise the definition of an SFI within prudential standards. APRA is therefore finalising the proposed amendments without revision.
On 20 July 2022, APRA released a response to consultation on proposed minor amendments to align and centralise the definition of a significant financial institution (SFI) within the prudential framework.
The finalised amendments to CPS 511 Remuneration have been published alongside this letter. A list of SFIs will be published on the APRA website later this year.
Centralising, standardising and harmonising the definition of an SFI provides a platform for the broader application of proportionality within the prudential framework. APRA plans to use the centralised definition of an SFI, where appropriate, to differentiate prudential requirements between large and small entities.
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Immediately upon publication (20th July 2022)
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Consultation (AUSTRAC)
Draft Rules to amend Chapter 16 of the AML/CTF Rules
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SWIFT (Society for Worldwide Interbank Financial Telecommunications) is migrating to the ISO20022 XML messaging format for cross border payments from November 2022.
These amendments will support work to enable reporting entities to submit international funds transfer instructions using the ISO 20022 XML message format.
The ISO 20022 messaging format contains a number of new information fields that are not addressed in the AML/CTF Act or the AML/CTF Rules.
The effect of this amendment to Chapter 16 of the AML/CTF Rules will be that reports may contain other details in the form of “Additional Information” relating to the instruction submitted to AUSTRAC to facilitate international funds transfer instruction reports in the ISO20022 format. This Consultation by AUSTRAC seeks affected entities’ views of the “Additional information” required in the revised format.
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The Consultation submission deadline is 10 August 2022
These requirements commence in November 2022
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Consultation (APRA)
Proposed prudential standard designed to strengthen the management of operational risk
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APRA has released for consultation a new prudential standard designed to strengthen the management of operational risk in the banking, insurance and superannuation industries.
APRA proposes to introduce a new cross-industry Prudential Standard CPS 230 Operational Risk Management (CPS 230) which will set out minimum standards for managing operational risk, including updated requirements for business continuity and service provider management.
The proposed Prudential Standard CPS 230 Operational Risk Management (CPS 230) is attached to the Consultation materials.
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Consultation opened 28 July. Submissions will be accepted until 21 October 2022
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