In the media

ASIC and APRA issue updated MoU

The ASIC and Australian Prudential Regulation Authority (APRA) have committed to strengthen engagement, deepen cooperation and improve information sharing, publishing an updated Memorandum of Understanding (MoU) (29 November 2019). More...

ASIC releases updated RG 97 on fees and cost disclosure ASIC released updated guidance on fees and cost disclosure for issuers of superannuation and managed investment products (29 November 2019). More...

‘Breaking paper’ key to improved advice experience, says FPA The Financial Planning Association of Australia (FPA) presented the findings of research conducted by its Future of the Statement of Advice (SOA) Working Group at the 2019 FPA Professionals Congress in Melbourne (28 November 2019). More...

Introducing legislation to implement further recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry Consumers and small businesses will be further protected under legislation introduced into the Parliament by the Morrison Government. The Government will also introduce the Financial Sector Reform Hayne Royal Commission Response - Stronger Regulators (2019 Measures) Bill 2019 (28 November 2019). More...

ASIC reports on compliance with financial advice fee disclosure obligations A new report about fee disclosure obligations released by ASIC has found that consumers receiving financial advice could be at risk of receiving wrong information about advice fees, or in some cases, being charged fees after ongoing fee arrangements have terminated (28 November 2019). More...

FSC welcomes default super bill The Financial Services Council (FSC) has welcomed the introduction of the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 as it ensures all workers have the option of making an active choice for their super (28 November 2019). More...

Westpac heads to face accountability law Treasurer Josh Frydenberg has confirmed Westpac’s leadership team will be examined against the Banking Executive Accountability Regime (BEAR). The Australian Council of Superannuation Investors (ACSI) called for more heads to roll, with chief Louise Davidson saying the body would engage with the bank to see if further action was needed (27 November 2019). More...

Court finds Dover Financial Advisers Pty Ltd made false, misleading or deceptive statements in Client Protection Policy, and director knowingly concerned The Federal Court of Australia has found Dover Financial Advisers Pty Ltd (Dover) engaged in false, misleading or deceptive conduct. The conduct in question involved publishing false, misleading or deceptive statements in a “Client Protection Policy” (Protection Policy) between around 25 September 2015 and 30 March 2018 (27 November 2019). More...

APRA finalises revised guidance on superannuation Business Performance Review The APRA has released a final revised Prudential Practice Guide SPG 516 Business Performance Review (SPG 516) and response to submissions letter following a six week consultation period (27 November 2019). More...

ASIC outlines approach to advice licensee obligations for the financial adviser code of ethics 26 November 2019 - As announced on 14 November 2019, ASIC has taken action to provide certainty to Australian financial services (AFS) licensees that they will not be in breach of the law because their financial advisers were not able to register with an ASIC-approved compliance scheme by 1 January 2020, as originally required (26 November 2019). More...

SMSF members avoid financial advice Between one-third and a half of important transactions carried out by self-managed super fund (SMSF) go without the help of the licensed advice, according to the recent study from Apricot Actuaries (26 November 2019). More...

Retirement Income Review consultation welcomed The Association of Superannuation Funds of Australia (ASFA) has welcomed the release of the government’s Retirement Income Review consultation paper as it is an opportunity to improve the long-term retirement outcomes for Australians (26 November 2019). More...

FPA welcomes ASIC statement on FASEA Code of Ethics The Financial Planning Association of Australia (FPA) welcomes the statement from the Australian Securities and Investments Commission (ASIC) that outlines its approach to advice licensee obligations for the financial adviser code of ethics (26 November 2019). More...

AFCA welcomes new General Counsel The Australian Financial Complaints Authority (AFCA) has welcomed Anna Campbell to the newly-created position of General Counsel (25 November 2019). More...

APRA proposes changes to prudential standard governing insurance in superannuation The Australian Prudential Regulation Authority (APRA) has released for consultation proposed revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250) (25 November 2019). More...

APRA proposes super insurance reforms APRA has opened public consultation for revisions to its prudential standard around insurance in superannuation, angling for changes such as a maximum level of cover to not erode retirement income and independent verification showing arrangements are in beneficiaries’ best interests (25 November 2019). More...

ASFA welcomes consultation on Review of Retirement Income System ASFA has noted the release of the Australian Government’s Retirement Income Review consultation paper and welcomed the important opportunity it presents to improve the long-term retirement outcomes for Australians (22 November 2019). More...

Compliance and regulatory landscape burden risk advice growth Compliance, paperwork, and the uncertain regulatory landscape are the top challenges financial planners believe are preventing them from growing their insurance advice, according to a report (21 November 2019). More...

Thousands of credit card insurance customers to get compensation payouts from NAB The National Australia Bank agrees to pay compensation to tens of thousands of customers who were sold junk credit card and personal loan insurance in what is believed to be the largest class action settlement involving a big-four bank and its customers in Australian history (20 November 2019). More...

APRA lays out culture game plan APRA has released its plans to scale up its regulation of governance, culture, remuneration and accountability across the finance sector, with measures such as doubling its corresponding department’s staff and introducing the use of artificial intelligence and industry-wide surveys (20 November 2019). More...

ATO hopes to reunite over $20b in lost super Data from the Australian Tax Office (ATO) shows there is over $20.8 billion in lost and unclaimed super in Australia and new legislation meant the ATO could reunite Australians with their lost super, without them needing to take action (19 November 2019). More...

CBA pleads guilty to criminal breaches over hawking life insurance policies Australia's largest bank has the dubious distinction of being the first major financial institution to be guilty of criminal charges arising from the banking royal commission (19 November 2019). More...

Regulators seek market infrastructure reforms The Council of Financial Regulators has pushed ahead on reforms to financial market infrastructures, including enhancement of its licensing regimes as well as its supervision and enforcement powers (18 November 2019). More...

‘We failed to live up to our own standards’: NAB CEO Acting NAB CEO Philip Chronican says that the bank failed to live up to their core values, but doesn’t believe those values need a reset. The comments came during the standing committee on economics review of the four major banks and other financial institutions (18 November 2019). More...

In practice and courts

ASIC RG 97 on fees and cost disclosure The updated version of Regulatory Guide 97 Disclosing Fees and Costs in PDSs and Periodic Statements (RG 97) explains how product issuers and platform operators should disclose fees and costs. Also, the guidance and associated legislative instrument have been drafted to make the regime more practical for industry and promote compliance by issuers with their legal obligations (29 November 2019). More...

ASIC REP 636 Compliance with the fee disclosure statement and renewal notice obligations Released 28 November 2019. This report summarises ASIC’s review of compliance with the fee disclosure statement and renewal notice obligations by a sample of AFS licensees and their representatives. More...

FPA Evolution of Advice discussion paper Consultation now open on developing FPA’s proposed policy platform for financial planning The Financial Planning Association of Australia (FPA) has released a new discussion paper titled Evolution of Advice: The Financial Planning Profession from 2020 to 2025, and opened consultation on its proposed new policy platform. FPA members will be asked to contribute their views over the next four weeks (27 November 2019). More...

APRA finalises revised guidance on superannuation Business Performance Review SPG 516 provides guidance to the superannuation industry on undertaking APRA’s new requirements for an annual Business Performance Review under Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515), and also the new legislated member outcomes assessment. SPG 516 is the final piece of guidance to support SPS 515 which commences on 1 January 2020 (27 November 2019). More...

APRA superannuation statistics for September 2019 APRA has released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the September 2019 quarter. Key statistics for the superannuation industry as at 30 September 2019 (26 November 2019). More...

APRA consultation: proposed revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250) The proposed changes are aimed at improving superannuation member outcomes by helping trustees select the most appropriate policies for their members, and monitor their ongoing relationships with insurers. The consultation closes on 3 February 2020. More....

APRA: regulating and supervising GCRA risks APRA’s intensified approach to GCRA aims to strengthen the resilience of financial institutions, including addressing, and ideally preventing, issues such as poor risk governance, misaligned incentives and misconduct that have undermined public confidence in the financial sector over recent years, in line with a key commitment made in APRA’s 2019-2023 Corporate Plan. The key attributes of APRA’s new approach to GCRA are outline here (19 November 2019). More...

APRA response to submissions on proposed Reporting Standard ARS 722.0 Derivatives ARS 722.0 will be used to collect quarterly data on the derivatives activity of authorised deposit-taking institutions (ADIs) and registered financial corporations (RFCs). APRA’s new approach to ARS 722.0 will provide greater certainty about reporting obligations and will reduce the reporting burden for most financial sector entities (18 November 2019). More...

IASB Update 20 November 2019 This IASB Update highlights preliminary decisions of the International Accounting Standards Board (Board) meeting 19-20 November 2019. The topics, in order of discussion, were: Primary Financial Statements. Subsidiaries that are SMEs; Disclosure Initiative; IFRS 3 reference to the Conceptual Framework; Management Commentary; Amendments to IFRS 17 Insurance Contracts; Implementation Matters. More...

AIST Policy News - 28 November 2019 Insurance; Choice of fund; Biz performance review; IDR; Financial advice. More...

ASIC Class Order [CO 14/443] Reporting dates The amendments made to CO 14/443 defer the first reporting day to 31 December 2020. This will allow further time for Government to develop and make the regulations. It also provides industry with certainty about the commencement date and time to finalise their reporting processes and disclosures. More...

IFRS: Interest-rate benchmarks amendments Amendments issued 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). 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...

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 are due by 7 January 2019. More...

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. More...

Gazette - Superannuation Industry (Supervision) Act 1993 28/11/2019 Notice of Disqualification - Faith Shiach 27/11/2019 Notice of Disqualification - Brendon Shiach; Jean-Jacques Lasm 21/11/2019 Notice of Disqualification - Ika Heleta 20/11/2019 Notice of Disqualification - Sean Pender; Patricia Verlinden; Lavinia Akauola; Sione Mapapalangi; Joshua Mapapalangi; John Stone; Louise Stone More...

Cases

Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd [2019] FCA 1932CORPORATIONS – false, misleading or deceptive conduct – contraventions of s 1041H of the Corporations Act 2001 (Cth) (Corporations Act) and ss 12DA(1) and 12DB(1)(i) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) – relevant principles – whether representations to a class of persons or separate representations to individuals – in the latter case, whether it is necessary to prove that individuals were misled – distinction between statements of fact and opinion – conduct found to be in contravention of s 1041H of the Corporations Act and ss 12DA(1) and 12DB(1)(i) of the ASIC Act. During the relevant period, Dover operated a financial services advice business and held an Australian financial services licence (AFSL) to conduct such a business. Mr McMaster was the sole director and shareholder of Dover and a responsible manager and key person on the AFSL

Toowong Pastures Pty Ltd as Trustee for the DB Family Trust trading as KBE Contracting Australia Pty Ltd and Commissioner of Taxation [2019] AATA 4897 SUPERANNUATION – Superannuation Guarantee Charge – whether Applicant liable for superannuation guarantee shortfall – whether worker an employee of the Applicant or independent contractor– contract of service or contract for services – factors to be taken into account – common law meaning of “employee” considered – Reviewable Decision affirmed. Superannuation Guarantee (Administration) Act 1992 (Cth) – ss 12(1), 12(3), 16

Bobos v Deputy Commissioner of Taxation, in the matter of Bobos [2019] FCA 1910BANKRUPTCY – application to set aside bankruptcy notice – where applicant issued with director penalty notice for failure by company to pay PAYG withholding amounts to Commissioner – where default judgment entered – where bankruptcy notice issued on basis of default judgment – whether service of bankruptcy notice carried out in accordance with substituted service orders – whether the Court should go behind the judgment the basis of the bankruptcy notice – whether defences available pursuant to s 269-35 Taxation Administration Act 1953 (Cth) – whether applicant had entered into payment agreement with the Australian Taxation Office (ATO) – whether ATO precluded from relying on director penalty notice – whether issue of bankruptcy notice an abuse of process – whether Court has discretion to set aside bankruptcy notice – application dismissed. In August 2015, the ATO lodged a proof of debt on behalf of employees claiming arrears of superannuation totalling $1,756,860. Following a comprehensive investigation, the Liquidators determined that the amount claimed by the ATO was incorrect, being substantially overstated.

Bianca Strahan v John Christos Pavlis, trading as Blackwood Fitness [2019] SAET 229Applicant claims for unpaid superannuation from November 2011 – Respondent accepts superannuation not paid – Amount not disputed – Statute of limitation argued to limit applicant’s claim – No time limit applicable to superannuation claims – s31 Fair Work Act 2009 (SA) HELD – Respondent to pay $20,771.24 for unpaid superannuation and interest of $4,544 – Pecuniary penalties for contraventions – $9,450 for contravening s45 Fair Work Act 2009 (Commonwealth) – $5,400 for inadequate payslips – $2,520 for failure to produce employee file – Fair Work Act 2009 (Commonwealth) ss 45, 535(3), 536(1) and (2), 546(3), 547 – Fair Work Regulations 2009 regs 3.42,

Baker and Australian Securities and Investments Commission (Freedom of information) [2019] AATA 4898 The Tribunal affirms the decision under review. FREEDOM OF INFORMATION – request for access to documents – legal professional privilege – conditional exceptions claimed – public interest – decision affirmed - Freedom of Information Act 1982 (Cth). The Applicant submits the following regarding the purported public interest in the release of these documents: (a) the high level of public interest arising from the recent Hayne Royal Commission into the financial services sector and its regulators

Legislation

Baker and Australian Securities and Investments Commission (Freedom of information) [2019] AATA 4898The Tribunal affirms the decision under review. FREEDOM OF INFORMATION – request for access to documents – legal professional privilege – conditional exceptions claimed – public interest – decision affirmed - Freedom of Information Act 1982 (Cth) The Applicant submits the following regarding the purported public interest in the release of these documents: (a) the high level of public interest arising from the recent Hayne Royal Commission into the financial services sector and its regulators