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Inside track: Superannuation, Funds Management & Financial Services

20 May 2019

#Superannuation, Funds Management & Financial Services

Inside track: Superannuation, Funds Management & Financial Services

In the media

Finance regulators tackle regaining investor trust
ASIC chair James Shipton has called for financial institutions to integrate fairness into their operations, as international financial regulators have said markets are wrestling with regaining trust from investors (17 May 2019).  More... 

AFCA welcomes moves to track dispute resolution within financial firms
The Australian Financial Complaints Authority (AFCA) has welcomed ASIC’s announcement of a raft of measures to strengthen the complaints handling process within financial firms (15 May 2019).  More... 

CFA recommends sweeping reforms to wealth sector
The global CFA Institute and its Australian subsidiary have released 10 major recommendations for reform in the wealth management industry and argue that simply disclosing vertically integrated conflicts is not enough in a report titled Professionalising Financial Advice (14 May 2019).  More... 

Regulators urge financial institutions to plan for LIBOR transition
The ASIC has written to the CEOs of several major Australian financial institutions regarding their preparations for the end of LIBOR. The UK Financial Conduct Authority (FCA) has stated that it will no longer use its powers to sustain LIBOR beyond 2021 (09 May 2019).  More...

Industry fund pays $12,600 over ‘independent advice’
Industry fund HostPlus has paid a $12,600 infringement notice penalty for making misleading claims about offering “independent advice” (09 May 2019).  More... 

Super funds warned on member best interest
Superannuation funds have been placed on notice that they need to adopt a higher duty to member best interests when shifting member balances into eligible rollover funds (ERFs) (09 May 2019).  More... 

Should ESG be made a regulatory necessity?
The industry funds-backed Australian Council of Superannuation Investors (ACSI) has called on the major parties to commit to strengthen investment stewardship and environmental, social and governance (ESG) considerations for institutional investors (09 May 2019).  More... 

FSC: One regulatory regime for financial advisors
The independent review of the Tax Practitioners Board (TPB) and the Tax Agent Services Act 2009 (Review) presents an important opportunity to streamline two separate regulatory regimes into one that applies to financial advisers (06 May 2019).  More... 

In practice and courts

FASEA approves Securities Institute Australia 8 unit Diplomas for 2 credits RPL
FASEA advises that it has approved the following Securities Institute Australia 8 unit Diplomas for 2 credits recognition of prior learning: Securities Institute Education Diploma (Diploma of Financial Planning) Securities Institute Education Diploma (15 May 2019).  More...  

ISA Report: The MATILDA Model
Published 10 May 2019. Industry Super Australia (ISA) has developed MATILDA macroeconomic Time, Liquidity and Dynamic Analysis model of the Australian economy. This is an operational large-scale Australian economy macroeconomic model of the feedback loop between the financial flow-of-funds (the change in financial holdings of major institutional sectors of the economy) and the national economy.  More... 

AFCA: Get ready for law reform changes
A number of law reform and subsequent administrative changes from the Bankruptcy Amendment (Debt Agreement Reform) Act 2018 and the Insolvency Law Reform Act 2016, will commence soon. Details are outlined here (15 May 2019). 

APRA releases approved audit report Form for superannuation funds with reporting periods ending on or after 30 June 2019
The following provides forms and prudential standards that are required under the Superannuation Industry (Supervision) Act 1993. (14 May 2019).  More... 

Australian Law Reform Commission (ALRC): Review into Australia’s corporate criminal responsibility regime
Note: Scope of the reference -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...  

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

AIST submission
06 May 2019 -Universal terms for insurance within MySuper

FSC submission
09 May 2019 - FSC Submission - Enforceability of Financial Services Industry Codes 12 April 2019
09 May 2019 - FSC - Ending Grandfathered Conflicted Rem for Financial Advisers 22nd March 2019

AFCA current matters
Digital Rebl Pty Ltd and Media Rebl Pty Ltd
Forex Capital Trading Pty Ltd
AGM Markets Pty Ltd
Berndale Capital Securities Pty Ltd
Bestjet Travel Pty Ltd (Bestjet)
Viewble Media and the Shoppers Network

Gazette - Superannuation Industry (Supervision) Act 1993
13/05/2019
Notice of Disqualification - Maria Scavo; Gary Scavo
09/05/2019
Notice of Disqualification - Viet Loc Tran; Vergel Villapando; Judith Hawes; Glenn Hawes
08/05/2019
Notice of Disqualification - Michael Heaton-Harris; Mark Whitton

Cases

Australian Securities and Investments Commission v Goldsky Global Access Fund Pty Ltd & Ors [2019] QSC 114
CORPORATIONS – FINANCIAL SERVICES – FINANCIAL SERVICES PROVIDERS – LICENCE: WHEN REQUIRED – where s 911A of the Corporations Act 2001 (Cth) requires a person to hold an Australian financial services licence (AFSL) if a person carries on a financial services business in this jurisdiction – where a company incorporated in the United States of America, of which the fourth respondent was managing director, applied to the applicant for class order relief from the requirement to hold an AFSL – where the applicant accepted the fourth respondent’s reliance on class order relief – where the first, second and third respondents, which were also controlled by the fourth respondent, each operated a bank account – where third parties deposited funds into the first, second and third respondent’s bank accounts – where none of the first, second and third respondents held an AFSL – where the fourth respondent was subsequently the subject of an investigation by the United States Securities and Exchange Commission – where the fourth respondent initially did not notify the applicant of the investigation – whether the first, second and third respondents carried on a financial services business – whether the first, second and third respondents were exempted from holding an AFSL
PROCEDURE – DECLARATIONS – APPROPRIATE FORM OF RELIEF - DISCRETION OF COURT – OTHER CASES – where the applicant requests the Court to make declarations that the first, second and third respondent have contravened s 911A of the Corporations Act 2001 (Cth) – whether it is an appropriate exercise of the Court’s discretion to make the declarations sought by the applicant. Australian Securities and Investments Commission Act 2001 Cth s 30; Corporations Act 2001 Cth s 9, s 21, s 761A, s 761C, s 763A, s 766A, s 766E, s 910A, s 911A

Gallop Reserve Pty Ltd v Matton Developments Pty Ltd & Anor [2019] QSC 113
CORPORATIONS – INTERNAL ADMINISTRATION OF CORPORATIONS – COMPANY OFFICERS – APPOINTMENT OF COMPANY DIRECTORS – CONSEQUENCE OF DEFECTS IN APPOINTMENT OF DIRECTORS –ESTOPPEL – ESTOPPEL BY CONDUCT – RELIANCE –GUARANTEE AND INDEMNITY – ASSIGNMENT – where the plaintiff entered into an agreement to provide litigation funding to the first defendant –CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the plaintiff entered into an agreement to provide litigation funding to the first defendant – where the litigation settled with a substantial payment to the first defendant – where an earlier debt owed by the first defendant to a bank was assigned by deed to the plaintiff – where one director of the first defendant, Kenward, executed the Deed of Assignment on its behalf pursuant to a power of attorney – whether the plaintiff engaged in misleading and deceptive conduct or unconscionable conduct in relation to the execution of the Deed of Assignment
CORPORATIONS – where the second defendant alleges that the plaintiff knowingly assisted Kenward in breaches of fiduciary duties under ss 180 and 182–184 of the Corporations Act – where the second defendant alleges that the plaintiff thereby acquired rights under the Deed of Assignment and litigation funding agreement – where the second defendant contends that the plaintiff should therefore be required to return funds received under the litigation funding agreement to the first defendant whether there was any breach of fiduciary duty by Kenward – whether the plaintiff assisted in any fraudulent design to obtain benefits for it
CORPORATIONS – CHARGES – SECURITY INTERESTS – where the plaintiff acquired rights under a charge which the first defendant had granted over its assets to secure its obligations under a loan agreement with a bank unreasonable exercise of rights pursuant to s 111 of the Personal Properties Securities Act

Legislation

Commonwealth

Act Compilation

Financial Sector (Transfer and Restructure) Act 1999
03/05/2019 - Act No. 45 of 1999 - An Act to provide for transfers of business between some kinds of financial institutions, to provide for transfers of shares and other interests in some kinds of financial institutions, and to make provision in relation to internal restructures within some groups of financial institutions

Regulation

Banking, Insurance, Life Insurance and Health Insurance (prudential standard) determination No.1 of 2019
07/05/2019 - The key requirements of this Prudential Standard are that an APRA-regulated institution and a Head of a group must: maintain a risk management framework that is appropriate to the size, business mix and complexity of the institution or group, as relevant; maintain a Board-approved risk appetite statement; risk management and a Board-approved business plan

Federal Court Amendment (Court Administration and Other Measures) Rules 2019
01/05/2019 - The Judges have agreed to amend the FCR 2011 by: 7. amending Division 33.3, consequential to changes made by the Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Act 2018, in replacing the Superannuation Complaints Tribunal with the Australian Financial Complaints Authority

Contacts:
Melbourne
Chris Lovell, Chairman
T: +61 3 9321 9832
E: chris.lovell@holdingredlich.com

Paul Faure, Partner
T: 61 3 9321 9904
E: paul.faure@holdingredlich.com

Bill Glover, Partner
T: 61 3 9321 9844
E: bill.glover@holdingredlich.com

Brisbane
Kylie Wilson, Partner
T: 61 7 3135 0514
E: kylie.wilson@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future. 

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