In the media

ASIC warns trustees about protecting your super laws and provides guidance for consumers
ASIC has called on superannuation trustees to provide helpful and balanced communications to their members regarding the Protecting Your Super package (PYSP) of reforms, which are due to take effect on 1 July 2019 (17 April 2019). More...

Super fund mergers to define 2019
A new report into the superannuation industry from KPMG suggests that 2019 will be defined by mergers and consolidation between super funds as they seek to deliver improved member outcomes (16 April 2019). More...

APRA releases new enforcement approach
The APRA has released details on the future role and use of enforcement activities in achieving its prudential objectives. The APRA Members formally commissioned the Enforcement Review last November in response to a range of developments, including the evidence presented to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, and proposals to give APRA expanded enforcement powers, particularly in superannuation (16 April 2019). More...

Citigroup to refund over $3m to clients
Following an ASIC investigation, Citigroup will refund over $3 million to 114 retail customers for losses arising out of structured product investments offered between 2013 and 2017. ASIC was concerned that while Citigroup considered its financial advisers to be providing general advice, elements of its practice may have led some customers to believe that Citigroup was providing personal advice (15 April 2019). More...

ASIC warns on overseas derivatives
ASIC has warned Australian financial services licensees that offer over-the-counter derivatives to retail investors located overseas could be breaking laws abroad, with Chinese authorities having alerted the watchdog that some online platforms have engaged in illegal activity (15 April 2019). More...

AIST research shows just how poor banking-owned super products are
The Fee and Performance Analysis 2019 by leading superannuation research house SuperRatings, commissioned by AIST, drills down into the differences between fees and returns across the many super products on offer and finds significant disparities between the fees charged by for-profit retail funds and profit-to-member funds (14 April 2019). More...

Some AFS licensees may be breaking overseas laws
AFS licensees are on notice that in addition to overseas consequences of potential breaches of overseas law, ASIC will consider whether breaching overseas law is consistent with obligations under Australian law to provide services 'efficiently, honestly and fairly (11 April 2019). More...

Consumer disclosure delay to hurt super outcomes
The Australian Institute of Superannuation Trustees has warned that ASIC's delay on consumer disclosure requirements will damage retirement outcomes. The requirement would mandate a standardised disclosure of fees and performance, called product dashboards, for all their super products, which funds only currently have to provide for their default (MySuper) products (10 April 2019). More...

FASEA welcomes new directors
The Financial Adviser Standards and Ethics Authority (FASEA) notes the Government's announcement of the appointment of Elissa Freeman and Louise Lakomy to the Board effective 11 April 2019 (11 April 2019). More...

ASIC releases final report on CBA's compliance with financial advice licence conditions
ASIC released KordaMentha Forensic's final report on CBA's advice compensation program under its additional licence conditions. ASIC took this action because the licensees did not apply review and remediation processes consistently to customers of 15 financial advisers, disadvantaging some customers (10 April 2019). More...

ASIC winds up abandoned companies owing more than $410,000 in employee entitlements
ASIC has assisted employees gain access to the Fair Entitlements Guarantee scheme (FEG) by exercising its wind-up powers and appointing liquidators to five abandoned companies (10 April 2019). More...

AICD responds to ALRC review of corporate criminal responsibility regime
The announcement of an Australian Law Reform Commission (ALRC) review of Australia's corporate criminal responsibility regime provides a further opportunity to assess the full accountability framework for corporate misconduct (10 April 2019). More...

Review into Australia's corporate criminal responsibility regime
The Morrison Government has commissioned the Australian Law Reform Commission (ALRC) to undertake a comprehensive review of the corporate criminal responsibility regime (10 April 2019). More...

ASIC welcomes FRC report on audit enforcement
ASIC has welcomed the release of the report by Australia's Financial Reporting Council (FRC) Auditor Disciplinary Processes: Review and the Federal Government's response to that report. ASIC will re-evaluate its criteria for taking auditor enforcement actions, and the types of outcomes that it may seek, including the use of enforceable undertakings and referrals of matters to the CADB (09 April 2019). More...

ASIC enforcement update July to December 2018
ASIC has released its enforcement update report for the period 1 July 2018 to 30 December 2018.The report also covers ongoing areas for particular focus, including criminal sanctions against banks, their executives and others who have breached corporate and financial services law. See the report here (09 April 2019). More...

In practice and courts

Australian Law Reform Commission (ALRC): Review into Australia's corporate criminal responsibility regime
The reports which the ALRC should consider should include but not be limited to the: 2019 Final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry; and 2017 report of the ASIC Enforcement Review Taskforce.
The ALRC should provide its report to the Attorney-General by 30 April 2020. More...

ASIC report 615: enforcement update 1 July to 30 December 2018
A copy of the report - outlining key actions taken over the past six months to enforce the law and support our enforcement objectives - can be found here. The report also covers ongoing areas for particular focus, including recent reforms enabling ASIC to pursue harsher civil penalties and criminal sanctions against banks, their executives and others who have breached corporate and financial services law (09 April 2019). More...

Resolution of disputes with financial service providers within the justice system
Senate Legal and Constitutional Affairs Committee; Parliament of Australia: 08 April 2019
This inquiry explored the ability of consumers and small businesses to exercise their legal rights through the justice system, and whether there are fair, affordable and appropriate resolution processes to resolve disputes with financial service providers. More...

APRA consultation: The Financial Sector (Shareholdings) Rules 2019 (the Rules)
In particular, APRA has proposed Rules setting out the matters that must be considered in determining if a person is "fit and proper" for the purposes of the FSSA. The consultation period on the proposed Rules has now commenced, with APRA accepting submissions until 27 May 2019. Copies of the draft Rules and explanatory material are available here.

ASFA reminder: Recovering your unclaimed money
From the 27th June 2019 applications for unclaimed monies under s254 of the Bankruptcy Act can be made directly to Australian Financial Security Authority (AFSA) replacing the current Court application process. An application form and further information about the new process will be published closer to the commencement date. More...

IFAC: Global consultation on quality management for firms and engagements now open
The International Auditing and Assurance Standards Board (IAASB) seeks public comment by July 1, 2019 on three interrelated standards that address quality management. The proposals bring important changes to the way professional accountancy firms are expected to manage quality—for audits, reviews, and other assurance and related services engagements.

APRA and ASIC publish joint letter on superannuation fees
See the Letter: Oversight of fees charged to members' superannuation accounts (10 April 2019).

AIST research: Fee and performance analysis
AIST has commissioned SuperRatings to examine the differences in fees and returns of profit-to-member funds compared with for-profit funds run mainly by banks. The report shows that the median profit-to-member MySuper has delivered 6.47% pa to members over 3 years – well in excess of the 4.94% per annum by bank and retail-owned super funds (10 April 2019). More...

AIST submissions
12 April 2019 - Enforceability of financial services industry codes - Code enforcement should generally be the responsibility of an independent body(such as a regulator) rather than a code owner.

10 Apr 2019 - APRA capability review - AIST recommends a new superannuation mandate to better reflect APRA's role; an integrated governmental superannuation data framework to support improved data collection, reporting and analysis; and makes numerous recommendations to improve supervisory arrangements.

10 Apr 2019 - Consultation paper 308: Review of RG 97 disclosing fees and costs in PDSs and periodic statements - This submission raises concerns that the latest fee and cost disclosure proposals from the Australian Securities and Investments Commission (ASIC) will deny consumers who invest their super through platforms and managed investment schemes (MIS) important consumer protection measures.

ASFA submissions
10 April 2019 submission to the treasury - APRA capability review

FSC submissions
FSC submission - APRA capability review - 10 April 2019

AFCA newsletter
AFCA News, contains case studies, articles and information that is relevant to members and consumers. See edition 2, 10 April 2019

Cases

Howard v Batistich [2019] FCA 525
SUPERANNUATION – appeal on a question of law from decision of the Superannuation Complaints Tribunal – whether Tribunal wrongly identified the question it had to answer – whether Tribunal failed to give the term 'de facto partner' its proper statutory construction – whether Tribunal failed to give adequate reasons.
Acts Interpretation Act 1901 (Cth) s 25D; Superannuation (Resolution of Complaints) Act 1993 (Cth) ss 37(6), 40, 46; Interpretation Act 1987 (NSW) s 21C; Superannuation Act 1916 (NSW) s 3

Legislation

Commonwealth

Acts

Treasury Laws Amendment (2019 Measures No. 1) Act 2019
10/04/2019 - Act No. 49 of 2019 as made - An Act to amend the law relating to superannuation, taxation, corporations, financial services, consumers, competition and statistics. Date of Assent 05 April 2019.

Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019
10/04/2019 - Act No. 44 of 2019 as made -An Act to amend the law relating to protecting employee entitlements, Date of Assent 05 April 2019.

Treasury Laws Amendment (Mutual Reforms) Act 2019
10/04/2019 - Act No. 37 of 2019 as made. An Act amending the: Corporations Act 2001 to: introduce a definition of 'mutual entity'; clarify for transferring financial institutions and friendly societies that the demutualisation provisions apply only if an entity no longer meets the new definition of a mutual entity. Date of Assent 05 April 2019.

Bills

Treasury Laws Amendment (Design and Distribution Obligation and Product Intervention Powers) Bill 2019
Finally passed both Houses - 03 April 2019 - The new law requires financial service providers to design and sell products with a target market in mind. While the vast majority of Australians benefit from quality products, this new regime offers an extra layer of protection. More...

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.