In the media

APRA concedes to IOOF judgementAPRA has chosen not to appeal the Federal Court decision to dismiss its court action against IOOF, which alleged the wealth giant had failed to act in the best interests of its superannuation members, but is considering reshaping its super supervision (17 October 2019). More...

ASIC annual report for 2018-19 ASIC’s Annual Report for the 2018-19 financial year has been tabled today in the Australian Parliament. Matters highlighted or referred to by the Royal Commission have been prioritised, and work continues on implementing ASIC’s new obligations and responsibilities included in its recommendations (17 October 2019). More...

FSC responds to ASIC TPD report In response to ASIC’s report ‘Holes in the safety net: A review of TPD insurance claims’, based on claims data and files dating back from 2016/17, the Financial Services Council (FSC) offered more recent analysis, using 2018 data on total and permanent disability (TPD) claims in life insurance (17 October 2019). More...

Australians urged to check their super ahead of latest changes Australians with multiple super accounts should consider consolidating their accounts or risk losing potential earnings, ahead of new superannuation changes coming into effect at the end of October (16 October 2019). More...

Taking action on the Banking, Superannuation and Financial Services Royal Commission - Recommendation 2.4: Grandfathered commissions Consumers will benefit from lower fees following the removal of conflicted remuneration for financial advice after the Coalition Government passed new laws through the Parliament yesterday, ending the payment of grandfathered conflicted remuneration (15 October 2019). More...

ASIC’s SMSF calculations distorted Running a SMSF is $8,900 cheaper than what ASIC believes, according to the SMSF Association (15 October 2019). More...

FSC welcomes end to grandfathered conflicted remuneration The FSC has welcomed the passage of legislation ending grandfathered conflicted remuneration payments to financial advisers. From 1 January 2021, as part of these reforms, where a conflicted remuneration is payable in contracts, the benefit must be passed through to the client (15 October 2019). More...

No one reads the PDS: ASIC ASIC is calling time on the financial services industry's reliance on disclosure as the default consumer protection, saying it enables poor conduct and poor consumer outcomes. ASIC teamed up with the Dutch Authority for Financial Markets (AFM) to produce REP 632 'Disclosure: Why it shouldn't be the default'. More...

'Sludge in the system': ASIC takes aim at fine print used in financial products ASIC finds that over the past decade the reliance on mandated disclosure and warnings has proven to be ineffective (15 October 2019). More...

ASIC to provide relief from financial adviser compliance scheme obligations ASIC has announced that it will make a legislative instrument to provide relief to Australian financial services (AFS) licensees from financial adviser compliance scheme obligations, following a Government announcement a new disciplinary body will displace the role of compliance schemes in monitoring and enforcing the Financial Planners and Advisers Code of Ethics 2019 (the code) (15 October 2019). More...

ASIC 'calls time' on disclosure reliance In a joint report published, ASIC and the Dutch Authority for the Financial Markets (AFM) looked at the effectiveness of disclosure for looked at the effectiveness of disclosure for financial products on consumer outcomes (14 October 2019). More...

New report highlights accountancy profession as key driver of progress in adoption of international standards In celebration of World Standards Day, IFAC released a new report detailing how and where international accountancy standards which focus on audit and assurance, ethics, education, and private and public sector accounting—are being adopted and implemented globally (14 October 2019). More...

Associations respond to Government’s decision on code monitoring The heads of Australia’s six leading professional associations for financial advisers have expressed disappointment in the timing of the Government’s decision to not proceed with code monitoring, just a month before all financial advisers are due to have registered (14 October 2019). More...

Taking action on the Banking, Superannuation & Financial Services Industry Royal Commission – Recommendation 2.10: New financial adviser disciplinary system The Morrison Government is accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers in early 2021, subject to the passage of legislation which will be introduced into the Parliament next year (11 October 2019). More...

APRA extends annual data collection reporting periods for registered financial corporations The APRA has granted an extension to the annual reporting periods for the Economic and Financial Statistics (EFS) data collection reporting forms completed by registered financial corporations (RFCs), will now be able to submit their report by the RFC's respective financial year end (11 October 2019). More...

Self-managed super funds face a wealth wipe-out due to inexperience and a toxic economic mix: ASIC The low-interest-rate/low-inflation environment that's making life tough for professional investors could be toxic for inexperienced self-managed funds, according to ASIC (11 October 2019). More...

SMSFs not suitable for everyone The Australian Securities and Investments Commission has identified eight red flags which would make it ‘extremely unlikely’ for an investor to gain any advantage from using self-managed super funds (SMSFs)(11 October 2019). More...

Govt aborts code-monitoring body move The Federal Government has aborted plans to establish Financial Adviser Standards and Ethics Authority (FASEA) code-monitoring bodies, opting instead to move towards a single disciplinary body covering advisers (11 October 2019). More...

Super funds need to increase data management protection Australia’s retirement savings pool is at risk of cybercrime and fraud attacks as the sector continues to grow, according to a whitepaper authored by payment technology company InPayTech (10 October 2019). More...

Future Fund unsuitable to be national pension scheme Using the Future Fund as a national retirement scheme would not be sensible as it has not performed any better than leading superannuation funds and liquidity could be an issue, according to Rice Warner (8 October 2019). More...

ASIC warns AFS licensees to meet financial reporting obligations on time ASIC is reminding all Australian Financial Services (AFS) licensees to lodge their annual financial statements and auditor reports by the due as required under the Corporations Act 2001 (04 October 2019). More...

In practice and courts

AASB: Simplified disclosure standard - Key facts AASB staff have prepared a summary of key facts about the proposed simplified disclosure standard (ED 295). This explains the background for the proposals, which disclosures have been removed from the RDR disclosures, and which disclosures would be added if the proposals are approved (10 October 2019).

AASB: Amendments to AASB 1059 Service Concession Arrangements: Grantors The AASB issued AASB 2019-2 Amendments to Australian Accounting Standards – Implementation of AASB 1059 to amend the modified retrospective method set out in paragraph C4 of AASB 1059, and to provide a practical expedient to grantors of service concession to not apply AASB 16 Leases to assets that would be recognised as service concession assets under AASB 1059 (11 October 2019).

IFRS: Interest-rate benchmarks amendments Amendments issued today focus on the accounting effects of uncertainty in the period leading up to the reform. The amendments come into effect from 1 January 2020 but companies may choose to apply them earlier. Interest rate benchmark reform, which amends IFRS 9, IAS 39 and IFRS 7, can be accessed here (subscription required). A project summary, providing further information about the Board’s work in relation to IBOR reform.

Proposal to remove special purpose financial statements for certain for-profit private sector entities (AASB ED 297) – Have your say ED 297 Removal of Special Purpose Financial Statements for Certain For-Profit Private Sector Entities is proposing to remove the ability of for-profit large proprietary, unlisted public (other than companies limited by guarantee) and small foreign-controlled companies to publicly lodge special purpose financial statements (SPFS) with ASIC. Comments close 15 November 2019. More...

AASB: Exposure Draft: Disclosure of accounting policies ED 296 Disclosure of Accounting Policies proposes amendments to help entities provide accounting policy disclosures that are more useful to primary users of financial statements. Please submit your comments to the AASB by 28 October 2019 via the AASB website

AASB: Invitation to comment ITC 40 Financial Instruments with Characteristics of Equity – The International Accounting Standards Board has recently published Discussion Paper DP/2018/1 Financial Instruments with Characteristics of Equity. Submissions to the IASB were due by 7 January 2019. More...

ASIC consultation: foreign financial services providers relief proposals ASIC has extended to 31 March 2020 licensing relief for foreign financial services providers (FFSPs) to allow them to provide certain financial services to Australian wholesale clients without needing to hold an Australian financial services licence. More...

Corporations Amendment (Design and Distribution Obligations) Regulations 2019 Consultation date: 11 October 2019 - The Government has released for public consultation exposure draft regulations to support the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 and an explanatory statement here.

ISA Submissions Submission on draft Prudential Practice Guide SPG 516 – Business Performance Review 10 Oct 2019 Corporations Amendment (Design and Distribution Obligations) Regulations Oct 2019 Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 10 Oct 2019 Remission of additional superannuation guarantee charge 08 Oct 2019

AIST Policy

AIST: Policy news - 17 October 2019

17 October 2019 - Disclosure value questioned - APRA on trustee “discomfort’’- SMSF warnings - MySuper fees. More...

AIST: Policy news - 10 October 2019 10 October 2019 - Parliament to scrutinise super| Latest Insurance developments & more Read

ATO: Proposed Superannuation Guarantee amnesty The proposed Superannuation Guarantee (SG) Amnesty (the proposed amnesty) and re-introduced the associated legislation into Parliament. Until the proposed amnesty law is enacted by Parliament, ATO will continue to apply the existing law to the SGC statements you lodge. For more information click here.

Cases

Robinson-Page Management Pty Ltd Aft The Beggs-Page Superannuation Fund -v- Trackem Holdings Pty Ltd [2019] WASC 194Practice and procedure - Inadequate indorsement of claim on writ - Setting aside a writ pursuant to O 6 r 1 Rules of the Supreme Court 1971 (WA)

Redenbach and Commonwealth Superannuation Corporation [2019] AATA 4147The decision under review is affirmed. DEFENCE – Defence force retirement and death benefits – classification in respect of incapacity – percentage of incapacity – where Applicant classified as Class C – assessment as to the degree of physical or mental impairment causing invalidity in diminishing the capacity of the Applicant to undertake kinds of civil employment – whether Applicant should have been assessed as having a higher percentage of incapacity – assessment of degree of impairment and percentage of incapacity at time of discharge – decision under review affirmed Defence Force Retirement and Death Benefits Act 1973 (Cth)

Wigmans v AMP Ltd [2019] NSWCA 2431. Grant leave to appeal in respect of ground 1 of the draft notice of appeal. CIVIL PROCEDURE – representative proceedings – multiplicity of proceedings – competing proceedings brought in single forum by various plaintiffs against the same defendant – where the plaintiffs sought permanent stays of one another’s proceedings – where stay granted against all but the last-commenced proceeding – whether bringing subsequent proceedings constitutes an abuse of process Following testimony given by executives of AMP Ltd (AMP) in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, five class actions were commenced within a short time of each other on behalf of shareholders in AMP

LM Investment Management Pty Ltd (in liq) v EY (also known as Ernst & Young) & Ors [2019] QSC 246The order of the court is that: The application for leave to proceed is dismissed. CORPORATIONS – WINDING UP – LIQUIDATORS – ACCOUNTS AND AUDITS – Where the defendants were the firm of auditors appointed to audit the financial statements and compliance plan of the FMIF – Where the defendants breached their obligations as auditors – Where the defendants issued a third party notice purporting to join LMIM as first, second and third third party in three different capacities – Whether the claim made by the defendants against LMIM in the third party notice should be allowed to proceed – Whether the defendants have established that their claim raises a serious question to be tried. Abbott v Commissioner of Police [2017] 1 Qd R 592, cited

Australian Securities and Investments Commission v Helou [2019] FCA 1634CORPORATIONS – multiple regulatory enforcement proceedings – breaches of duties of directors and officers – ASIC proceedings against chief executive officer and chief financial officer for disqualification orders – earlier ASIC proceedings against corporate entity – separate ACCC proceedings against corporate entity and officers for disqualification orders – application for permanent stay of proceedings – overlap of proceedings – vexatious and oppressive proceedings – administration of justice – abuse of process – applications dismissed

Legislation

Commonwealth

Treasury Laws Amendment (2019 Measures No. 2) Bill 2019Finally passed both Houses 17 October 2019 - Amendments include: Income Tax Assessment Act 1997 to extend the concessional tax treatment for genuine redundancy and early retirement scheme payments made to individuals who are 65 years or older provided the dismissal or retirement occurs before they reach pension age; Superannuation (Unclaimed Money and Lost Members) Act 1999 to enable the Commissioner of Taxation to pay interest on amounts held by the commissioner that are proactively reunified with a person’s active superannuation account; and Superannuation (Unclaimed Money and Lost Members) Regulations 1999 to prescribe the rate of interest payable on inactive low balance accounts and amounts proactively reunified by the commissioner.

Regulation

Military Superannuation and Benefits (Eligible Members) Declaration 201918/10/2019 – This instrument repeals the Military Superannuation and Benefits (Eligible Members) Declaration 2018 and declares the eligible members for the purpose of the Act who were provided under the repealed Declaration. It also includes three new specified categories and closes five specified categories and amends a commencement date for one specified category. It also declares an additional 18 individual members as eligible members.