APRA and ASIC have issued a joint letter to superannuation trustees about how regulatory oversight will operate and licensing changes if the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020 becomes law.
The Bill changes APRA’s and ASIC’s roles in relation to superannuation: APRA remains responsible for prudential and member outcomes regulation and ASIC will be the conduct and disclosure regulator.
ASIC will have joint responsibility with APRA for enforceable provisions in the SIS Act which relate to consumer protection.
Application of Australian financial services licensing regime to superannuation trustees
The coverage of the Australian financial services licensing regime in superannuation will be extended. This will ensure ASIC has access to appropriate powers and enforcement tools, and can successfully perform its role as superannuation conduct regulator.
All superannuation trustees subject to APRA regulation will need to provide all services involved in operating a superannuation fund in accordance with the general obligations on AFS licensees under the Corporations Act and the consumer protection provisions of the ASIC Act. All trustees, including ‘non-public offer’ trustees, will be held to the same standards.
For trustees that already hold an existing AFS licence, the draft legislation provides that a new licence authorisation – to provide a superannuation trustee service – will automatically be deemed to apply. No steps need be taken by these trustees to acquire this authorisation.
For ‘non-public offer’ trustees that do not hold an existing AFS licence, a streamlined application process for the trustee to obtain an AFS licence will apply. ASIC will be writing to the 15 affected non-public offer trustees to provide more information about how to get the licence and the authorisations they need.
For ‘non-public offer’ trustees that hold an existing AFS licence to provide advice only, the streamlined application process will also apply for the trustee to obtain an authorisation to deal in superannuation. ASIC will also be writing to the 10 affected non-public offer trustees to provide information about this process.
Breach reporting
The APRA Dual Reporting Framework will continue. Trustees will be able to continue to report breaches to both regulators by submitting one report to APRA, provided the information reported to APRA meets the breach reporting requirements in the Corporations Act.
This will be further supported by extending the timeframes under the SIS Act for trustees to report breaches from 10 business days to 30 calendar days in order to align with the Corporations Act requirements.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
