Australia: Superannuation & Funds Management - What's News - 23 September 2014

In the media

Annual concessional caps in the spotlight
MEDIA – 18 September 2014 – The annual concessional contributions limit could be replaced with a lifetime cap if the Federal Government accepts the proposals of the superannuation industry. More...

Record-keeping obligations updated
ASIC – 18 September 2014 – Financial advisers' record-keeping obligations have been updated, following industry consultation. ASIC has been actively monitoring record keeping by AFS licensees and, where AFS licensees have failed, has taken action. More...

Trustees missing a trick on APRA reporting
MEDIA – 18 September 2014 – A vast majority of superannuation funds are failing to re-use their APRA reporting data internally, a new survey has found. The survey in August of superannuation finance managers who are charged with submitting APRA forms, and found that 63% of super funds were treating their APRA reporting requirements as "mostly tactical". More...

FSC calls for legacy product reform
MEDIA – 18 September 2014 – The Financial Services Council (FSC) has called on the government to reform regulation around product rationalisation, labelling the current $22.6 billion in legacy insurance and super products a "substantial drag" on the industry. More...

PwC urges government to "accommodate" Chinese investment
MEDIA – 18 September 2014 – Australia's foreign investment settings must accommodate China's growing needs, argues PricewaterhouseCoopers. The latest Trends in M&A: China outbound deals report, PwC found the value of Chinese deals in Australia grew by 42% to US$2.4 billion, offering great opportunities for Australia. More...

ASIC update on financial advice stakeholder engagement
ASIC – 17 September 2014 – ASIC reports on the results of two financial advice industry engagement projects conducted during the 2013–14 financial year. These projects allow ASIC to focus future regulatory actions on areas that the industry identifies as posing higher risks. More...

Avoiding a super fraud
MEDIA – 17 September 2014 – It was only a couple of years ago when the collapse of the Trio Capital left 6,000 people without their superannuation savings. Around $180 million of investors' money was lost. Australia's $1.8-trillion superannuation industry is increasingly being targeted by criminals. More...

Almost half the population don't understand the insurance in their super fund
ASFA – 17 September 2014 – Following research that shows many Aussies do not understand insurance within their superannuation (super), the Association of Superannuation Funds of Australia (ASFA) is urging all fund members to check the insurance they currently have within their super fund to make sure they have the right cover for their needs. More...

ASIC flags breach crack-down
MEDIA – 17 September 2014 – The Australian Securities and Investments Commission (ASIC) has issued a further warning about poor culture within financial planning organisations and urged that remuneration incentives be based on good culture rather than sales. More...

ASIC "satisfied" with platform compliance
MEDIA – 17 September 2014 – Following a review of platform operators implementing the RG 148 requirements, ASIC commissioner Greg Tanzer said the new requirements have generally been well received. ASIC noted that there were some implementation and transitional issues which will require further monitoring by ASIC. More...

ASIC chairman backs portfolio holdings disclosure
MEDIA - 16 September 2014 – Australian Securities and Investments Committee (ASIC) chairman, Greg Medcraft has come out strongly in favour portfolio holdings disclosure obligations for superannuation funds. More...

Super fees are competitive and could go lower with the right policy options – FSC Financial System Inquiry submission
MEDIA – 15 September 2014 – Superannuation fees in Australia are comparatively low on a global scale and could be even lower with the right policy settings the Financial Services Council said today. At 0.85%, MySuper fees are competitive on a comparative international basis and could be further reduced if the right policy settings are in place. More...

Self-Managed Super the epitome of superannuation engagement
INSTITUTE OF CHARTERED ACCOUNT – 12 September 2014 – Australia's 534,000 SMSFs and their one million members contribute significantly to the overall success of the superannuation sector and should be celebrated according the ATO's deputy assistant commissioner of superannuation. More...

Mandatory ethics training proposed for planners
MEDIA – 11 September 2014 – Ethics classes for financial planners should be fundamental to proposed new education standards, with self-regulation a near impossible benchmark for the profession, two industry bodies have said. More...

Quarterly SMSF statistical report released
AUSTRALIAN TAXATION OFFICE – 10 September 2014 – The ATO has released its quarterly self-managed superannuation fund (SMSF) statistical report for June 2014. According to the report, there are estimated to be more than 534,000 SMSFs with total assets of $557 billion, an increase of 6 and 12.5% respectively since June 2013. More...

ISA and AIST joint submission on proposals to lift the professional, ethical and education standards in financial advice
ISA – 10 September 2014 – ISA and AIST made a joint submission to the Parliamentary Joint Committee on Corporations and Financial Systems Inquiry into proposals to lift professional, ethical and education standards in the financial services industry. More...

Time to shift focus onto net returns, urges AVCAL
AUSTRALIAN PRIVATE EQUITY AND VENTURE CAPITAL ASSOCIATION LTD – 10 September 2014 – Australia's superannuation fee debate should be reset, and the focus shifted towards overall investment performance and net returns, according to the second round submission to the Financial System Inquiry by AVCAL. More...

Insurance premiums hit industry funds
MEDIA – 9 September 2014 – Not-for-profit super funds have "borne the brunt" of rising insurance premiums, being more adversely affected than the retail or corporate super sectors, new research has found. More...

FOFA amendments before the Senate as vertical integration in financial planning examined
GOVERNANCE INSTITUTE – 9 September 2014 – The Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014, which was passed in the House of Representatives despite significant opposition from a range of parties, including the financial planning industry, has been referred again to the Senate Economics Legislation Committee for inquiry. More...

APRA: 12 new technical FAQ's on Superannuation reporting
APRA – 8 September 2014 – APRA's reporting frequently asked questions (FAQs) provide timely guidance on commonly asked reporting related questions. The FAQs are designed to clarify reporting issues raised by RSE licensees and to assist them in meeting their reporting obligations. APRA encourages licensees to report to APRA in accordance with the FAQ guidance, to the extent practicable. More...

Report 408: Review of the implementation on RG148: Platforms that are managed investment schemes
ASIC – 16 September 2014 (released) – The feedback ASIC received and a class order modifying the law to reflect the updated obligations. More...

Report 407: Review of the financial advice industry's implementation of the FOFA reforms
ASIC – 17 September 2014 (released) – This report presents the findings from an ASIC review of the implementation of the FOFA reforms by 60 AFS licensees. Key findings in REP 407 include: Impact of FOFA on adviser numbers, products and services, conflicted remuneration and compliance challenges and risks. More...

RG 148: Platforms that are managed investment schemes
ASIC – 16 September 2014 – The report reminds platform operators about some important obligations, including: management of conflicts of interest to ensure there is appropriate avoidance, management and disclosure in relation to the conflicts inherent in platform structures and timely breach reporting in accordance with s912D and Regulatory Guide 78 Breach reporting by AFS licensees. More...

FOFA reform implementation
ASIC – 18 September 2014 – ASIC has released Report 407 Review of the financial advice industry's implementation of the FOFA reforms ( REP 407), which presents the findings from an ASIC review of the implementation of the FOFA reforms by 60 AFS licensees. More...

APRA: discussion paper and draft amendments to Prudential Standard APS 110 Capital Adequacy (APS 110) and Prudential Standard APS 330 Public Disclosure (APS 330)
APRA – 18 September 2014 – The draft reporting standards and Discussion Paper seeking views on reporting standards for all RSE licensees to report information in respect of certain non-MySuper investment options, which are referred to as select investment options. The Discussion Paper includes issues such as the definition of 'select investment option', proposed reporting changes, and draft forms. More...

New AUSTRAC compliance guide
AUSTRAC – 18 September 2014 – The AUSTRAC compliance guide consolidates a range of AUSTRAC guidance material and replaces the AUSTRAC regulatory guide. More...

AIST submission: Treasury Legislative Amendment – Deregulation
AIST – 17 September 2014 – AIST's submission addresses Schedule 1 which seeks to repeal the reporting on payslips of superannuation contributions, a measure implemented as part of the Securing Super changes. More...

ASIC: industry implementation of platforms guidance report
ASIC – 16 September 2014 – The report on our review of the implementation of updated Regulatory Guide 148 Platforms that are managed investment schemes ( RG 148) by platform operators, reminds platform operators about some important obligations. More...

ASIC: review of breach reporting by AFS licensees
ASIC – 16 September 2014 – ASIC announces a review in response to concerns about inconsistencies and delays in reporting significant breaches. Regulatory Guide 78 Breach reporting by AFS licensees ( RG 78) states that the reporting period starts on the day the AFS licensee becomes aware of a breach or likely breach that it considers could be significant. More...

Superannuation, Investment Management and Retirement Policy: FSC
FSC – 15 September 2014 – Financial Services Council submission to the Financial System Inquiry – Phase Two Superannuation, Investment Management and Retirement Policy. More...

Cases

Allco Funds Management Limited (Receivers and Managers Appointed) (In Liquidation) -v- Trust Company (RE Services) Limited (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) [2014] NSWSC 1251
EQUITY – COMPANIES – Fiduciary duty of directors to avoid conflicts of interest – Corporations Act 2001 (Cth) ss 181, 187 and 601FD – obligation of directors to act bona fide in the best interests of the company for a proper purpose and not improperly to use their position to gain an advantage for another person – UNCONSCIONABLE CONDUCT – Australian Securities and Investments Commission 2001 (Cth) ss 12CA and 12CB – where plaintiff held units in a registered managed investment scheme – where two of its directors were also directors of the responsible entity of the scheme – where both were subsidiaries of the same holding company – where those directors committed the plaintiff to agreements with the responsible entity which converted its equity into a loan with a fixed repayment date and then committed the plaintiff to an amending agreement which removed the fixed repayment date – whether the directors acted in a situation where their duties to both entities were in conflict – whether the directors acted bona fide in the best interests of the plaintiff and for a proper purpose – whether the responsible entity has acted and continues to act unconscionably by treating the plaintiff as a bare lender rather than an equity holder – REMEDIES – plaintiff seeks rescission of the amending agreement only – HELD – the directors were in a position of conflict – the transactions were not bona fide in the best interests of the plaintiff or for a proper purpose and they improperly used their positions to gain an advantage for another person – plaintiff entitled to rescission of the amending agreement but only on condition that the original loan agreement is also rescinded – HELD – unconscionable conduct as alleged not established. More...

Legislation

Commonwealth

Corporations Amendment (Statements of Advice) Regulation 2014
SLI 2014 No. 134
This regulation amends the Corporations Regulations 2001 to make a number of amendments to the financial disclosure requirements. The amendments relate to Part 7.7 of the Act: the financial disclosure requirements provisions. In particular, the amendments alter some of the provisions regarding the Statement of Advice, a disclosure document which generally must be provided to retail clients receiving personal financial advice (8 September 2014). To be ceased 2 January 2015. More...

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