The Financial Services Council has been at the forefront of recent policy debates, raising concerns with the design of the proposed $3 million cap on superannuation balances and continuing to support the implementation of the Quality of Advice Review.
The FSC has also led debate on retirement incomes policy, releasing important research that demonstrates how more efficient policy settings can improve the lives of retirees, and reduce the cost of ageing to the Commonwealth.
Attention now turns to the Federal Budget, which will be held on the evening of Tuesday 9 May. The FSC team will be in the Canberra lock-up, and expect superannuation and the financial services sector to be a focus. The Government has indicated a focus on aligning superannuation payments with payday and there continues to be speculation around new taxes, with the structural deficit front of mind for the new Treasurer.
FSC members will receive a detailed briefing in the hours after the Budget is released, so keep an eye on your inbox!
Blake Briggs, FSC CEO
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Click on the topic of interest below to read more.
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Treasury Laws Amendment (2023 Measures No 1) Bill
FSC welcomes Government’s response to Your Future, Your Super Review
FSC releases Retirement Income Policy Roadmap
APRA consults on draft technical determination for combining MySuper product performance histories
FSC makes submission to consultation on legislating an objective of superannuation
Additional earnings tax on individuals with than $3 million in superannuation
ASIC releases report assessing trustee progress on insurance in superannuation
Win on Default Superannuation Funds in Modern Awards
National Housing Fund Legislation and institutional investment in national building
Migration Review and Significant Investor Visa
Government consults on implementation of a 10 year experienced pathway
Clock ticking on legislation giving full effect to individual registration of advisers
FSC Supports Strong Defence Against Cyberattacks
Technology and Innovation Experts Group Meets for the First Time in 2023
Design and Distribution Obligations (DDO)
Anti-Money Laundering and Counter-Terrorism Financing
Australian Financial Complaints Authority (AFCA)
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PARLIAMENT, LEGISLATION AND REGULATION
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Treasury Laws Amendment (2023 Measures No 1) Bill
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This legislation is currently before Parliament. The FSC made a submission to the Senate Inquiry into this Bill stating:
- There should be a delay in the start date for the measure relating to self-registration of financial advisers (see details in advice section below).
- The FSC supports the provisions facilitating the introduction of sustainability standards.
- The FSC raised concerns about the measure that denies franking for certain dividends funded by capital raisings. The FSC argued the measure may create difficulties for investors that receive franked dividends where the franking is subsequently cancelled. The FSC argued that if this issue is not addressed, this will create substantial issues for all types of investors, including managed funds and superannuation funds as well as individual investors.
The legislation also changes the tax treatment of offmarket buybacks to align with the tax treatment of onmarket buybacks, and implements part of the response to the review of the Tax Practitioners Board (TPB).
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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SUPERANNUATION
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FSC welcomes Government’s response to Your Future, Your Super Review
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The Government has released its response to the review run by Treasury of the Your Future, Your Super laws and consultation has recently closed on Exposure Draft regulations that would amend the current performance test for MySuper products and apply the same test to Trustee-Directed Products (TDPs) this year. In the Government’s response, the Assistant Treasurer, Stephen Jones, has made clear that the scope of changes is focused on fine tuning the performance test and updating the benchmarks that can be implemented by finalising the regulations in July so that the test can be applied at the end of August.
The FSC was successful in advocating for the inclusion of ten additional benchmarks for superannuation fund performance assessments and changes to improve four existing benchmarks, including the decomposition of the international equities asset class to allow for developed and emerging market strategies, the fixed income asset class to allow for high yield credit strategies and the alternative asset class to allow for alternative defensive and alternative growth type strategies. The FSC also welcomed confirmation from the Government that it has no current intention to amend the legal framework for stapling and the best financial interest duty.
The FSC will continue to work closely with both superannuation and fund management members to secure further improvements to the Government’s proposed benchmark changes and to ensure that the performance test produces accurate and meaningful outcomes for consumers invested in trustee-directed products who are often advised when the test runs for these products for the first time this year.
Please contact Aidan Nguyen for more information.
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FSC releases Retirement Income Policy Roadmap
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Following multiple rounds of consultation with FSC members over the past year, the FSC released a policy roadmap for a more efficient superannuation drawdown phase. The roadmap prepared by NMG Consulting draws on global approaches to the retirement system and identifies a full package of reforms to lift the confidence of how Australians spend their superannuation in retirement by reducing the cost of high-quality financial advice, encouraging more innovative retirement income products and making a complex retirement system easier for retirees to navigate through.
The FSC will build out the roadmap by gathering feedback from industry experts and will continue to promote the actions in the research to policymakers. The FSC intends to shift the focus to strengthening the superannuation system by helping Australians spend more in their retirement, rather than weakening the system by increasing superannuation taxes on Australians who have worked hard to save for their retirement.
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Please contact Aidan Nguyen for more information.
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APRA has released its long awaited 2022 Choice Heatmap. The FSC supports APRA on its decision to develop the 2022 Choice heatmap based on new data now being directly collected by APRA, rather than data provided by a third party as was the case with the 2021.
The 2022 Choice heatmap covers 163 superannuation products across 604 distinct multi-sector choice accumulation options offered via MasterTrust structures and exclude those investment options offered through a superannuation wrap platform. The heatmap includes 1,038 investment pathways, 59 percent of which are open to new members as well as those that have existing members but are now closed to new members (41 per cent of investment pathways). In total this represents $292 billion in member benefits, representing 47 per cent of the Choice accumulation sector.
APRA’s Choice heatmap is an important transparency tool to assist superannuation trustees in understanding and comparing performance of Choice superannuation products to drive better consumer outcomes particularly in the leadup to the application of performance testing to trustee-directed products, however, the delay in the heatmap’s release due to data challenges highlights the need for careful consideration and interpretation of the findings.
Accessible links:
Please contact Aidan Nguyen for more information.
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APRA consults on draft technical determination for combining MySuper product performance histories
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APRA has released for consultation a proposal to issue a technical determination that would remove the need for APRA to make individual determinations for MySuper products that require performance to be combined when administering the annual performance test. This would operate in limited circumstances, and as stated by APRA, the draft technical determination is intended to modify the actual return formula in reg 9AB.12(2) and the benchmark return formula in reg 9AB.14(2) for lifecycle MySuper products to ensure that any changes to the product are reflected in the performance history used in the Performance Test.
APRA has proposed not to apply the technical determination to TDPs that are lifecycle products, instead stating that it will use the experience of the upcoming TDP Performance Test to consider whether the determination should be extended to TDP lifecycle products in future years. APRA has invited feedback from industry by Thursday 11 May.
Please contact Aidan Nguyen for more information.
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FSC makes submission to consultation on legislating an objective of superannuation
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Stakeholder consultation has recently closed on the Government’s proposal to legislate an objective of superannuation. The FSC made a submission to the consultation in strong support of the initiative as enshrining an objective in law will see it become an anchor for policy development, which over time should mean policy settings better align with the goals of the system. We also supported the concise wording as it reflects the foundational components of Australia’s superannuation system and that results in more stability and public confidence over the long-term.
The FSC submission makes a number of recommendations to support the initiative, particularly:
- It would be helpful for the final wording to incorporate the concept of individual ownership, reflecting community expectations and the fundamental aim of the system is to assist individuals to save for their own retirement;
- Removing the terms ‘equitable’ and ‘sustainable’ from the final wording so as to not detract from the primary objective and to confuse superannuation with the broader Government goal of promoting equity and fiscal sustainability across all programs; and
- Legislating an objective should be done via standalone legislation to avoid the legal risks and to provide a single reference point for all future changes to superannuation, tax or social security policy.
The FSC understands Treasury received over a hundred stakeholder submissions and will look for a Government decision, in the form of a draft bill for consultation, to be released in the second half of this year.
Please contact Aidan Nguyen for more information.
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Additional earnings tax on individuals with than $3 million in superannuation
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Following recent stakeholder consultation, the Government and Treasury are currently determining key details to the proposal of a new tax on individuals whose total superannuation balances exceed $3 million.
The FSC’s submission to this consultation highlighted the following three key areas where additional consideration should be given to balance the expected benefit that a simple regime would deliver, the need to ease the significant reporting burden on superannuation funds and also to maintain fairness for impacted individuals:
- Minimising additional reporting processes on APRA-regulated funds – this will require a targeted low-cost reporting solution for proposed measure to minimise the cost burden ultimately borne by superannuation consumers.
- The lack of indexation of the $3 million threshold – Leaving the decision of when and if to index the $3 million threshold to a future Government does not provide superannuation consumers and the industry with sufficient certainty, and is not consistent with sound long-term superannuation taxation policy.
- Progressing other related measures in parallel – in particular, to permit the conversion of existing legacy products into more modern products.
Details of the measure, such as the $3 million threshold, indexation of the threshold and any transitional measures, that materially impact the fiscal position will be confirmed on the night of the Federal budget. Treasury has advised that further consultation on the draft legislation will occur in the second half of this year, with the intention to introduce a bill before Parliament by the end of the year.
With consultation on the implementation of the measure ongoing, the FSC will continue to work closely with Government to ensure the design and implementation of the proposed measure is done in a targeted way that minimises the additional reporting burden on APRA-regulated superannuation funds and ultimately borne by superannuation consumers through higher pressure on fees.
Please contact Aidan Nguyen for more information.
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ASIC releases report assessing trustee progress on insurance in superannuation
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ASIC has released Report 760 (REP760) which reviews trustee progress in improving member outcomes regarding insurance in superannuation.
The review examined a selection of 15 trustees and their progress in addressing the issues in relation to insurance in superannuation previously raised by ASIC in previous public communications, including:
- Value for money – ASIC expects that trustees continue to review whether the insurance they offer is meeting members’ needs and providing value for money by collecting and analysing cohort level member data, including from their insurer, to support compliance with the Design and Distribution Obligations (DDO).
- Overly restrictive cover – ASIC expects that trustees continue to monitor outcomes of TPD claims assessed under restrictive definitions (including the Activities of Daily Work definition) and assess whether trustees should remove restrictions and/or change eligibility criteria to reduce the number of people assessed under the restrictive definitions.
- Claims handling – ASIC expects that trustees analyse complaints and reasons or withdrawn claims, work with insurers to address procedural frictions and ensure that trustees have effective oversight of their insurers’ claims handling process.
- Communications – ASIC expects that trustees harness member data and consumer research as well as conduct testing of their processes, procedures and member communications to ensure communications are clear, balanced and easy to understand including in relation to changes as a result of regulatory reforms.
Please contact Aidan Nguyen for more information.
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Win on Default Superannuation Funds in Modern Awards
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In February the Department of Employment and Workplace Relations (DEWR) conducted a closed, confidential consultation process on a number of workplace relations legislation issues. In particular, two related to superannuation – inserting the right to superannuation into the National Employment Standards (NES) and the review process for default superannuation funds in modern awards.
Currently, default funds in modern awards are supposed to be reviewed by the Fair Work Commission (FWC) every four years however, this has not been the practice since 2014 as the FWC, following legal action by the FSC, has been unable to constitute a suitable panel of non-conflicted FWC members. The consultation asked whether the review process was even necessary anymore given the FWC is not well placed to make assessments as to the actual merit of funds it selects.
The FSC made a submission noting that there was no place for default funds in modern awards anymore and that some employees are being unfairly defaulted into funds that are flagged in APRA heatmaps as either currently, or at risk of, underperforming.
Following this consultation process, the Government made the decision to defer any changes to default funds until a more fulsome consultation process can be conducted. The DEWR has stated that this consultation process will likely not be conducted this year. It was also confirmed that newly appointed FWC Expert Panel members are not suitable to be appointed to the panel that determines default funds and so that review process will not take place in the foreseeable future either.
The Government did, however, introduce legislation that inserts a right to superannuation into the NES. The FSC is supportive of this measure that grants employees the right to pursue unpaid superannuation through the FWC as well as the existing pathway through the Australian Tax Office.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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National Housing Fund Legislation and institutional investment in national building
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The Bill introduced to parliament to give effect to the funding portion of the Albanese Government’s Housing Accord and Supercharging Super promises has not yet garnered enough support to pass in the Senate. The Bill requires the support of the Greens who say that it should include measures for renters and a guaranteed minimum spend if the fund does not generate a return.
The Greens have been negotiating with the Government but have said they will reject the Bill as it currently stands.
The Treasurer’s Investment Roundtable also met in April to discuss institutional investment in renewable energy and the energy transition. The Government promised a range of measures including ‘sovereign green bonds’ to allow for investment in this sector, an expansion of the energy rating system to existing homes, and investing in the Australian Sustainable Finance Taxonomy to help investors ensure that funds are meeting their green commitments.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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INVESTMENTS
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Following the Federal Government’s recent second Investor Roundtable, the Treasurer made some key announcements:
- ASIC enforcement: the Government has committed an extra $4.3 million to fund an expansion of ASIC’s surveillance and enforcement activities combatting misleading and deceptive sustainability claims by businesses about their products.
- Sustainable finance taxonomy: The Government committed to co-funding the Australian Sustainable Finance Institute process of developing an Australian sustainable finance taxonomy.
- Sovereign Green Bonds: The Government will introduce a Sovereign Green Bonds program for public projects following engagement with investors in developing the Green Bonds Framework.
The FSC anticipates the release soon of a second consultation paper on the development of a climate-related financial disclosure regime for Australia. The FSC also continues to progress the development of ESG labelling guidance for fund managers to help combat greenwashing.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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Migration Review and Significant Investor Visa
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The Minister for Home Affairs, the Hon Clare O’Neil MP released the Final Report of the review panel which undertook a comprehensive review of Australia’s migration system. The Final Report cited the FSC’s submission and recognised that the Significant Investor Visa has delivered positive outcomes. The Government has responded by releasing an outline of the Government’s migration strategy for consultation. The draft strategy flags that the Government will seek to reshape the Business Innovation & Investment Program. The FSC will continue to advocate for the importance of an investment visa class as part of Australia’s migration mix.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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Treasury Consultation on Competition in the Provision of Clearing and Settlement Facilities Draft Legislation
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The FSC provided its submission to Treasury consultation on Competition in the Provision of Clearing and Settlement facilities draft legislation on 20 April. The submission supports the regulatory settings enabling competitive outcomes in Clearing and Settlement (CS) services, providing ASIC and the ACCC with the requisite powers to enable this to occur, and emphasised the need for there to be interoperability between CS providers (should a competitor emerge) for genuine competition to occur. The submission is available here.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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The Diversity Working Group met on 26 April and discussed refinements to the diversity survey to capture additional information before finalisation. The aim is to finalise the 2023 diversity survey in May and issue it to fund manager members for completion.
A number of additional gender diversity resources have also identified for inclusion in the FSC gender diversity resource library and members will be advised once the summary and resources are available on the webpage.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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ADVICE
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The Quality of Advice Review final report detailed the extensive consumer protections that will be retained, and in some areas expanded, if Michelle Levy’s recommendations are implemented. The recent implementation of the Design and Distribution Obligations (DDO) regime, and the proposed expansion of what constitutes personal advice, are two examples.
In the video below FSC CEO, Blake Briggs details why the Assistant Treasurer can have confidence that implementing the Review will not only deliver affordable and accessible financial advice, but also ensure consumers remain protected.
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Government consults on implementation of a 10 year experienced pathway
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Treasury has opened consultation on financial adviser professional standards, releasing Exposure Draft legislation for the 10-year Experienced Adviser pathway. Comments on the Exposure Draft are due by 3 May and information on the consultation can be found here.
The draft Bill introduces new transitional arrangements for experienced financial advisers which include:
- Experienced advisers with 10 years minimum FTE between 1 January 2007 and 31 December 2021 and a clean disciplinary record are not required to complete an approved degree or courses, but must pass the exam and meet continuing professional development requirements.
- Potential new entrants may apply to the Minister where an approved domestic qualification does not meet all conditions attached to it in the Approved Qualifications Determination, allowing flexibility for them to demonstrate they satisfy the conditions through alternate means.
- Financial advisers who are registered tax agents are also qualified tax relevant providers, removing duplication of education requirements.
The FSC’s submission to this consultation with be developed with input from the Advice Regulatory Affairs Working Group and Advice Board Committee.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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Clock ticking on legislation giving full effect to individual registration of advisers
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The Corporations Amendment (Registration of Relevant Providers) Regulations 2022 has implemented an extension to 1 July for financial advisers to self-register. However, Schedule 1 of the Treasury Laws Amendment 2023 Measures No. 1 Bill (see Parliament section above) provides the mechanism for giving effect to the registration process in enabling self-registration of financial advisers and given ASIC power to administer this registration through automated tools which support that process. The Bill has not yet passed Parliament and is currently before the Senate Economics Committee.
The current timeframe for the passage of this legislation and the already legislated 1 July deadline for individual registration, will potentially give certain advisers only a few weeks to comply with the obligations – that is to self-register and be authorised as a representative of the Australian Financial Services License holder (AFSL-holder). This also does not account for the additional time it will take for ASIC to conduct the appropriate system build.
ASIC is therefore limited in its ability to fully prepare industry for compliance with the obligations under the Legislation. For example, this could include information sheets or other guidance in advance, which would enable the industry to be fully aware of their obligations and can ensure they comply in advance.
The tight turnaround between the Bill passing and the legislated 1 July deadline requiring registration could mean non-compliance without amendments to the commencement of this schedule of the legislation.
In its submission to the Senate Economics Committee (see Parliament section above), the FSC has recommended a six month delay to the commencement of this provision to enable advisers to comply with its requirements to align with the extension of individual adviser registration made under the Corporations Amendment (Registration of Relevant Providers) Regulations 2022, and to provide ASIC adequate time to adapt the appropriate system builds required.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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TECHNOLOGY AND INNOVATION
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FSC Supports Strong Defence Against Cyberattacks
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The FSC made a submission to the Australian Cybersecurity Strategy 2023-2030 consultation. The consultation sought feedback on high level principles that will eventually make up the next Cybersecurity Strategy for the nation. The Strategy will have the lofty goal of making Australia the most cyber-secure nation in the world by 2030.
The FSC is supportive of a strong position on cybersecurity, disincentivising cyber crime and protecting Australians from malicious actors. The FSC notes, however, that the Albanese Government has a lot of simultaneous projects happening across cyber and economic crime to protect consumers from data breaches and scams and is calling on the Government to produce a whole-of-government strategy that aligns Departments and agencies in these goals.
The FSC is also calling for Government to find ways to better share information with industry and for industry to be able to share information amongst itself regarding cyber and scam activity. This is currently significantly hampered by privacy laws but a balance that allows industry to share and receive real time threat information would go a long way to helping defend against attacks.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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Technology and Innovation Experts Group Meets for the First Time in 2023
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The Technology and Innovation Experts Group (TIEG) met for the first time in 2023 in April. The meeting, the first since the FSC announced its innovation priorities for the next 18 months, saw technology, legal, and policy experts from across the FSC membership meet to discuss technology and innovation issues coming down the pipeline that might affect the financial services industry in Australia.
Of particular interest to the group was the potential risks and uses of artificial intelligence within the FSC and the upcoming consultation on the Consumer Data Right extension into the superannuation sector.
The TIEG is always welcoming new and interested members to contribute to the robust discussions about upcoming tech issues.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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LEGAL, TAX AND CROSS-PORTFOLIO
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Design and Distribution Obligations (DDO)
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The proposed changes to the FSC’s template Target Market Determination (TMD) for funds management are close to being finalised. The Funds Management Board Committee will consider the final draft of the revised template at a meeting shortly. When the template is agreed it will be provided to members and non-member licensees for adoption.
Once this process is complete, FSC members will then consider the appropriate changes to other FSC template TMDs and the FSC’s data standards for the DDO regime.
ASIC will shortly be releasing a report on their findings about DDO implementation in funds management. The FSC will brief members about the report shortly after it is released, and we plan to organise a member briefing with ASIC on the report.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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Anti-Money Laundering and Counter-Terrorism Financing
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The Attorney General announced on 21 April a public consultation on proposed wide-ranging reforms of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime.
Part 1 of the consultation paper proposes reforms that will simplify and modernise the operation of the regime. The need to streamline obligations was recommended by the 2016 Report on the Statutory Review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The 2016 Statutory Review found that the regime is overly complex and impedes the ability of regulated entities to understand and comply with their AML/CTF obligations. In particular, the scale, structure and density of the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (the Rules) was considered to be a significant issue, rendering the Rules hard to follow and largely inaccessible particularly for small business.
Part 2 of the consultation paper proposes extending the AML/CTF regime to certain high-risk professions, including lawyers, accountants, trust and company service providers, real estate agents and dealers in precious metals and stones (also known as “tranche-two entities”). Out of more than 200 jurisdictions, Australia is now one of only five jurisdictions in the FATF Global Network, alongside China, Haiti, Madagascar and the United States, that do not regulate tranche-two entities.
Consultation will occur throughout 2023. The department will also conduct roundtable discussions with key stakeholders. The FSC will shortly be convening an AML Working Group meeting to discuss this consultation.
Please contact David McGlynn or Ashley Davies for more information.
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Updated regulatory guide. ASIC released an updated RG 78 (Breach reporting by AFS licensees and credit licensees) on 27 April.
The update RG 78 contains a number of key changes as follows:
- Grouping multiple reportable situations into one report to ASIC. The revised guidance clarifies the circumstances in which licensees may group related reportable situations into one report.
- How to complete the free-text field ‘Describe the reportable situation’. The new guidance identifies specific information for licensees to consider, including in the description of the reportable situation they provide.
- Updates related to a reported breach. The new guidance sets out expectations on when licensees will use the ASIC Regulatory Portal’s update functionality to inform ASIC on the progress of a reported breach.
- Investigation trigger and root cause options in the prescribed form. ASIC have provided new definitional style guidance on each of the available answer options for the following questions in the form: ‘What triggered the investigation or made you aware of the matter?’ and ‘What are the root causes of the breach – or likely breach?’
- What constitutes a ‘similar’ reportable situation. The new guidance sets out ASIC’s expectations on what is ‘similar’ when answering the question ‘Have any similar reportable situations previously occurred?’.
- Calculating the number of clients affected. The new guidance assists licensees to understand ASIC expectations when answering the question, ‘Specify the total number of clients the reportable situation affects – or will likely affect if the breach does occur (if the investigation is not yet complete this can be an estimate)’.
- Withdrawing a submitted report to ASIC. The new guidance clarifies the circumstances in which a report may be withdrawn or corrected.
Prescribed form. ASIC is also making minor changes to the prescribed form for lodging reportable situations (accessed using the Regulatory Portal). These changes will be implemented on 5 May 2023, and will clarify how some questions should be answered and point licensees to guidance available in RG 78.
Outstanding matters. ASIC also notes that a number of issues are still being considered and work on these other matters is ongoing. ASIC expect to undertake further consultation with a range of stakeholders.
Please contact David McGlynn or Ashley Davies for more information.
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Australian Financial Complaints Authority (AFCA)
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Proposed AFCA Rules & Operational Guidance Changes
AFCA is consulting on proposed changes to its Rules and Operational Guidelines.
The proposed changes have been developed to address recommendations made in Treasury's Independent Review of AFCA – with some additional changes to help ensure our Rules and Operational Guidelines remain accurate, up-to-date and provide clearer guidance about AFCA’s jurisdiction and processes.
AFCA has written a consultation paper to explain the proposed changes in detail and support stakeholders in their submissions.
AFCA proposes changes to its Rules and Operational Guidelines in the following general areas:
- The management of unreasonable and inappropriate conduct within the scheme.
- Dealing with complaints where an appropriate offer of settlement has been made or where issues in dispute have been previously settled.
- Excluding complaints lodged by professional or sophisticated investors unless exceptions apply.
- To enhance the visibility, accessibility and performance of the Forward Looking Review mechanism, under Recommendation.
- Clarity about the effect of AFCA determinations and how the slip rule works to ensure greater transparency and understanding of AFCA’s decision making.
- Minor changes to definitions and language to update certain areas of the Rules arising from legislative change, to give greater clarity and transparency of the scheme’s operation overall.
- Minor changes to clarify AFCA’s reporting and transparency obligations.
The FSC and members have been in discussions with AFCA about the proposals and are preparing a submission through the AFCA Working Group.
Proposed amendments to AFCA’s Approach to claims for non-financial loss.
AFCA is also consulting on proposed amendments to its Approach to claims for non-financial loss.
AFCA can award non-financial loss compensation to a complainant (except in superannuation complaints). The proposed amendments address feedback from AFCA members and other stakeholders that the Approach document needs more information about how AFCA assesses these claims. AFCA is proposing to add a matrix as a guide on what might be an appropriate range for an award of compensation for non-financial loss. The matrix explains how much compensation AFCA might choose to award based on the impact of the firm’s conduct on the complainant, and duration of that impact.
Please contact David McGlynn or Ashley Davies for more information.
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- Legislation currently before Parliament will permit the cancellation of franking of certain distributions funded by capital raisings – see details (including FSC submission on this issue) in Parliament section above.
- The FSC made a submission on draft legislation to impose new, stricter, limitations on interest deductions. The FSC argued that the proposed denial of interest deductions on borrowings to fund offshore dividends was unwarranted and should be removed. The FSC also argued that a proposed exemption for superannuation funds should be extended to other widely held managed funds.
- The FSC is making a submission on draft legislation to implement public Country-by-Country reporting on tax information. The FSC is arguing that Australia should mirror the reporting requirements of other developed countries, and the proposals for bespoke Australian reporting should be removed, particularly proposals for itemised reporting on book values of intangible assets.
- The FSC met with the ATO to discuss tax administration issues for managed funds, including an update on upcoming justified trust reviews; difficulties in funds claiming withholding tax refunds; governance over third party data; foreign capital gains & Burton decision; the ATO relationship manager; and the need for timely guidance on tax measures due to commence operation soon. Notes from the meeting were provided to members.
- The ATO provided an update that it will shortly be providing FSC with updated draft guidance on foreign capital gains and the Burton decision; and final instructions for fund member tax reporting (AMMA/SDS).
- The ATO announced that it was conducting a review of eligibility for Managed Investment Trust (MIT) status. The ATO advised the FSC that this review related to trusts that were ineligible to be MITs (e.g. discretionary trusts or deceased estates) but elected to be treated as MITs.
- The FSC made a submission to the ATO on a revised draft legislative instrument relating to Recipient Created Tax Invoices (RCTIs), proposing a number of technical changes to improve the operation of the instrument.
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. for more information.
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