The superannuation overhaul: seven areas of reform in the draft bill out for consultation

The superannuation overhaul: seven areas of reform in the draft bill out for consultation

Uncategorized
Today we look at proposed changes to regulatory obligations for those operating in the superannuation sector. Namely, the seven key changes contained in the draft Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017 (the draft bill). By Dr. Drew Donnelly, Compliance Quarter Useful terminology The reforms proposed in the draft bill are generally concerned with ‘Registrable Superannuation Entities’ (RSEs). Under section 10 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act), an RSE is either a regulated superannuation fund, an approved deposit fund or a pooled superannuation trust. It does not include a self-managed superannuation fund. In particular, the focus is on the obligations of ‘RSE licensees’ (those who have been given a licence to operate an RSE), as well as ‘trustees’ of a fund…
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An open banking regime for Australia: July fintech update

An open banking regime for Australia: July fintech update

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  On July 20, the Government announced that an independent review has been set up to consider the best process for implementing an open banking data regime in Australia. Open banking requires banks to share product and customer data with customers and, with their consent, third parties. By Dr. Drew Donnelly, Compliance Quarter An open banking regulatory regime is a key part of the Government’s financial technology (fintech) commitments, and something that we have written about before. So far, the Government has established a review panel and released a terms of reference. An issues paper for public comment will be released in due course, but in the meantime, it would be useful to think about the key areas signposted in the terms of reference, in light of the Productivity Commission’s Inquiry…
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Key definitions under the Energy Retail Law

Key definitions under the Energy Retail Law

AU Energy Compliance, Uncategorized
There are some key definitions contained in the Energy Retail Law which need to be understood.  Chapter 10 of the National Electricity Rules (NER) contains the Glossary and it covers 114 pages. Often the definition of the word or phrase will contain words which also need to be defined. By Anne Wardell, Compliance Quarter Embedded Network For example, the definition of an Embedded Network is: A distribution system, connected at a parent connection point to either a distribution system or transmission system that forms part of the national grid, and which is owned, controlled or operated by a person who is not a Network Service Provider. Each of the phrases in italics has a separate definition within the Glossary. To understand all the meanings, you may watch a short presentation…
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APRA’s new capital benchmarks for banks

APRA’s new capital benchmarks for banks

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The Australian Prudential Regulation Authority (APRA) has just announced that it is increasing the capital adequacy ratios for banks and other authorised deposit-taking institutions (ADIs) in Australia, with the new rates to be in place by January 2020. Today we explain what the relevant capital adequacy ratio is, the different methods used to calculate it and describe the two new benchmarks. By Dr. Drew Donnelly, Compliance Quarter Background In Expected credit loss: the new way banks must recognise shifting credit risk we discussed APRA recent changes to the way in which banks must recognise impairment of loans. The goal with that change was to make sure banks “maintain provisions and reserves adequate to absorb existing and estimated future credit losses into its business”. Another important tool employed by APRA to…
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Government progress on cybersecurity in Australia

Government progress on cybersecurity in Australia

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Earlier this year, the Government’s cyber security advisor, Alastair MacGibbon, described a “prevailing ‘tick box’ compliance culture” for federal government agencies when it comes to cyber security. Furthermore, in a report released in May the Australian Strategic Policy Institute (ASPI) recommended various areas where the Government needs to improve its approach to cyber security, particularly, in adapting and implementing the ‘National Cybersecurity Strategy 2016-2021’. In more positive news, on July 6, the International Telecommunications Union (ITU), released its ‘Global Cybersecurity Index’, where Australia was ranked a top ten nation for its commitment to cyber security. By Dr. Drew Donnelly, Compliance Quarter In a range of articles recently we have looked at technological developments which call for strong cyber security compliance requirements, including the Productivity Commission’s proposed data-sharing regime and developments…
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AUSTRAC’s risk assessment: three areas where you may need to step up your compliance program

AUSTRAC’s risk assessment: three areas where you may need to step up your compliance program

Uncategorized
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has just released a report (12 July) Securities & derivatives sector: money laundering and terrorism financing risk assessment revealing the vulnerabilities of the securities and derivatives sector with regards to financial crime. We recently took at AUSTRAC’s advice on the risk management obligations of businesses. We have also looked at the compliance obligations of those who trade in OTC derivatives. By Dr. Drew Donnelly, Compliance Quarter Today we review AUSTRAC’s assessment with one focus; in which areas are businesses still falling short in meeting their obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) framework. AUSTRAC’s Findings AUSTRAC’s report used three key sources in developing its risk assessment: Analysis of suspicious matter reports (SMRs), as well as other AUSTRAC intelligence Reports and…
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The Australian Tax Office and the company tax rate for small businesses – what’s all the fuss about?

The Australian Tax Office and the company tax rate for small businesses – what’s all the fuss about?

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A key part of the Government’s Budget package last year was a reduction in company tax rates for small businesses. The Australian Tax Office (ATO) recently interpreted “small business” to include companies that simply generate ‘passive income’ from investments. The Government has responded that it did not have these types of entity in mind when it decided to introduce tax cuts for small businesses. By Dr. Drew Donnelly, Compliance Quarter Today we summarise the disagreement between the ATO and the Government over the tax rate. Budget 2016: The tax enterprise plan In Budget 2016, the Government unveiled a ten-year enterprise tax plan aimed at supporting jobs and economic growth, particularly through tax relief for small businesses. One aspect of this plan was an incremental reduction in the company tax rate…
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The Crowd-funding Act and changes to the Australian Market Licence regime: The latest ASIC consultation paper

The Crowd-funding Act and changes to the Australian Market Licence regime: The latest ASIC consultation paper

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Most businesses that facilitate the trading of assets or financial instruments (‘market venues’) are required to hold an Australian Market Licence (AML), and are subject to an accompanying regulatory regime. The Corporations Amendment (Crowd-sourced Funding) Act 2017 (the CSF Act), passed into law in March, creates a bespoke regulatory regime for crowd-sourced funding. At the same time, the CSF Act amends the Corporations Act 2001 so that some ‘lesser risk’ market venues can be exempted from some obligations under the AML regulatory regime. By Dr. Drew Donnelly, Compliance Quarter On 20 July, The Australian Securities & Investments Commission (ASIC) released a consultation paper an exemption framework and inviting comment. So, what exactly is ASIC proposing? The CSF Act The key purpose of the CSF Act is to allow small unlisted…
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Are You Producing The Correct Type Of Product Disclosure Statement?

Are You Producing The Correct Type Of Product Disclosure Statement?

Financial Services
Last week, the Australian Securities & Investments Commission (ASIC) announced that it is extending an existing form of regulatory relief for three types of financial product: multi-funds, superannuation platforms and hedge funds. Businesses which offer these financial products will continue to be exempt from the requirement to produce shorter product disclosure statements (shorter PDSs) until (at least) June 2018. By Dr. Drew Donnelly, Compliance Quarter As a key tool for protecting consumers, it is essential that any business offering financial products is complying with product disclosure requirements. Today we ask: what is a standard PDS, what is a shorter PDS, which businesses are required to produce the shorter PDS, and which are exempt? The standard PDS Recently, we looked at new client money protections for retail clients investing in off-the-counter…
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The rules for temporary work visas changed (again) on 1 July: An update

The rules for temporary work visas changed (again) on 1 July: An update

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In May, we discussed the Government’s announcement that there would be significant changes to Temporary Work (Skilled) (subclass 457) visas, to be implemented over the next year or so. These changes were subject to robust feedback from industry, particularly with regard to the new occupation lists. In light of this, on 1 July the Government announced some further ‘tweaks’ to the new temporary visa regime. By Dr. Drew Donnelly, Compliance Quarter Today’s article is an update on these new requirements as well as a reminder of other aspects of the new regime that came into force on July 1. Industry feedback on the occupation lists The changes announced in April created two new ‘streams’ for the subclass 457 visa. From that point, subclass 457 visas would only be approved for…
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