Super Alert – 5 July 2019

This week’s Super Alert covers media releases from the regulators which include consultation on ASIC’s new product intervention power and APRA’s further updated PYS guidance.

ASIC releases consultation paper for product intervention power

On 26 June 2019, ASIC released Consultation Paper 313 (CP 313) for public comment, which relates to its new product intervention powers under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Act). ASIC’s intervention powers came into effect on 6 April 2019 which is the day after the Act received Royal Assent (however note that the design and distribution obligations in the Act do not take effect until 6 April 2021).

ASIC is seeking to consult with the industry in order to establish a “regulatory guide [that] sets out the scope of the power, when and how ASIC expects to use the power and how a product intervention order is made”.

Submissions on CP 313 close on 7 August 2019.

Please click here and here to read more.

ASIC releases Cost Recovery Implementation Statement

On 26 June 2019, ASIC issued a media release in relation to its “Cost Recovery Implementation Statement” for the 2018/19 financial year (Statement). The Statement sets out the “estimated industry sector levies for 2018-19, as well as details on how ASIC allocated its regulatory costs in 2017-18”. The information in the Statement is a guide only as ASIC’s actual costs will be released in December.

Please click here to read more.

APRA updates PYS FAQs

On 28 June 2019, APRA released a further update to its ‘Protecting Your Super’ frequently asked questions (FAQs) which were reported in our Super Alerts of 10 May 2019 and 7 June 2019.

The latest update relates to a notification from the Government that it will amend the SIS Act in order to:

• “allow for the aggregation of a members’ interests in one or more products held within a superannuation account”; and
• reflect that “the rights of members under fixed term insurance cover are not affected and insurance cover is not inappropriately removed”.

APRA has advised that superannuation trustees may proceed with their PYS implementation “on the basis that the amendments will become law in due course”, although they have not yet been legislated.

Please click here to read more.

Commencement of Commonwealth modern slavery legislation

On 1 July 2019, the annual reporting obligations under the Modern Slavery Act 2018 (Cth) (Act) commenced operation (each financial year is a reporting period under the new Act).

The Act is relevant to superannuation funds with an annual consolidated revenue of at least $100 million and “requires modern slavery statements to be given annually to the [Department of Home Affairs], describing the risks of modern slavery in the operations and supply chains of reporting entities and entities owned or controlled by those entities”. A Modern Slavery Statements Register will also be established to make these statements publicly available online.

Please click here and here to read more.

ATO website updates

On 3 July 2019, the ATO added the following material to its legal database:

• Law Companion Ruling LCR 2018/5A1 (an addendum to LCR 2018/5 relating to the first home super saver scheme); and
• Guidance note GN 2019/1 which “provides guidance on the changes to transition-to-retirement income streams that commenced from 1 July 2017”.

Please click here and here to read more.

Government reintroduces Bill to make insurance in superannuation opt-in only for under 25’s and low account balance members

On 4 July 2019, the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 was introduced into the House of Representatives and received its second reading. An earlier version of this Bill lapsed on 11 April 2019 when the Prime Minister called the Federal Election.

Please click here to read more.

This alert was written by Natalie Cambrell, Partner, Damian Tarulli, Special Counsel and Sanela Osmanovic, Associate.​