Home' Superfunds : Superfunds March 2019 Contents account with the client’s express written authority. Disclosure should be
strengthened in situations where an adviser does not meet the statutory
concepts of ‘independent’, ‘impartial’ and ‘unbiased’. The Government
should review, by the end of 2022, the effectiveness of measures
implemented by the Government, regulators and financial services
entities to improve the quality of financial advice. Grandfathering
provisions for conflicted remuneration should be repealed as soon as is
The Government’s initial response to the report, Restoring trust in
Australia’s financial system, briefly outlined its intent to take action in relation
to all recommendations made by the Commission. The Government has
subsequently released further details of its proposed response to particular
recommendations, and has proceeded to implement some of those actions.
In particular, the Government has:
• introduced amendments to the Superannuation Industry (Supervision)
Act 1993 (SIS Act) to ensure that breach of a trustee or trustee director’s
covenants or obligations would be enforceable by action for civil penalty
and to prohibit trustees from ‘treating’ employers (see discussion below
in relation to the ‘Member Outcomes Bill’)
• confirmed the details for capability review of APRA to be undertaken in
the first half of 2019.
The Government has also announced it has given a direction extending the
remit of the Australian Financial Complaints Authority’s (AFCA). This will
require AFCA to consider financial complaints dating back to 1 January 2008
(the start of the timeframe considered by the Royal Commission) that have
not previously been heard and which fall within AFCA’s current monetary
limits and compensation thresholds. The Government will also strengthen
regulatory oversight and transparency of remediation activities through
increasing the role of AFCA in the establishment and public reporting of firm
remediation activities. The Government’s proposals in relation to AFCA are
more expansive than the recommendations made by the Commissioner.
The Opposition has also announced a more extensive compensation
scheme and more expansive powers for AFCA than those strictly
recommended by the Commission. The initial response from the
Opposition confirmed its in-principle support for each of the Commission’s
recommendations, and released a more detailed outline of its proposed
actions on 22 February.
It is anticipated that the response to the Royal Commission will continue
to feature heavily in pre-election policy announcements from both the
Government and the Opposition.
APRA has indicated its commitment to expeditiously implementing the
recommendations relating to its prudential and supervisory framework.
Many of these will be addressed during 2019 and 2020, flowing from
APRA’s current post-implementation review of the prudential and reporting
standards, while others will require legislative amendment.
ASIC has outlined its proposed response to the 12 Royal Commission
recommendations that are directed at ASIC, or where the Government’s
response requires action by ASIC, without the need for legislative change.
The action to be taken by ASIC includes:
• working with industry in anticipation of the Parliament legislating
reforms in relation to codes—including the Insurance in Superannuation
Voluntary Code—and ASIC’s powers to provide for ‘enforceable code
• monitoring and reporting on the extent to which product issuers are
acting to end the grandfathering of conflicted remuneration
• continuing to implement its commitment toward a stronger enforcement
policy, including a ‘why not litigate?’ stance, and creating a separate
Office of Enforcement within ASIC during 2019.
SUPERANNUATION REFORMS – PROGRESS OF BILLS
Parliament concluded its current sitting on 21 February and is not scheduled
to sit again until 2 April, the date of the Federal Budget. While progress
was made on some important reforms during February, a long list of
superannuation bills remains before Parliament. The future of these bills will
depend on how quickly the Government moves to prorogue Parliament and
call the election after the Budget is handed down.
Superfunds March 2019
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