Publication
Challenges to the validity of local council levies
The way that local councils issue special levies, and deal with errors made in the passing of those levies, has come under spotlight in the recent High Court of Australia decision.
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Australia | Publication | July 2020
On 24 July 2020, ASIC released amendments to Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (RG 97) as well as ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 and ASIC Corporations (Amendment and Repeal) Instrument 2020/579. Due to the impact of COVID-19, the transitional arrangements for product disclosure statements (PDSs) given by issuers of superannuation and managed investment products have been amended whereby:
The amendments made to RG 97 confirm ASIC’s policy position with respect to:
More information on the amendments to RG 97 including the updated regulatory guide and ASIC Instruments are available on ASIC’s website.
On 9 July 2020, ASIC released its Consultation Paper 330 (CP 330) and draft instrument on its proposed use of its product intervention powers to address significant consumer detriment in the continuing credit industry. In accordance with the National Credit Code, a ‘continuing credit contract’ is a credit contract where multiple advances of credit are contemplated and the amount of available credit increases as the amount of credit is reduced.
The regulator has highlighted in its CP 330 that continuing credit products are likely to result in significant consumer detriment due to excessive costs incurred compared to the loan amount, particularly for vulnerable customers experiencing financial difficulty. CP 330 is open for public consultation until 6 August 2020. ASIC’s CP 330 and draft instrument is available here, as well as further information in ASIC’s Media Release.
In a letter published to RSE licensees on 23 July 2020, APRA has reiterated the need for focus on improving outcomes for superannuation members, particularly through the implementation of SPS 515 Strategic Planning and Member Outcomes. APRA has reminded trustees of their new obligations including to:
RSE licensees must demonstrate, as part of their review of strategic objectives and business planning, how they will respond to policy changes and pandemic impacts on future revenue streams. APRA commented that declining returns, reductions in asset values and member account numbers, and cost pressures may challenge funds’ ability to continue to provide value to members. The COVID-19 impact for some funds will be significant, accelerating sustainability challenges that would otherwise have emerged over time, accelerating both product and fund consolidation.
Further information about the superannuation industry’s efforts to promote members’ interests and APRA’s close engagement with RSE licensees during a challenging and volatile environment, including APRA’s letter to RSE licensees, is available on APRA’s website.
ASIC issued a temporary no-action position on 7 July 2020 with respect to potential breaches of the financial resource requirements for Australian financial services (AFS) licensees that arise from recent changes to the accounting treatment of lease assets. Due to the introduction of accounting standard AASB 16 Leases, all leases will now be reflected on a lessee’s balance sheet by way of a lease liability and a right-of-use asset.
The no-action position allows AFS licensees to use right-of-use lease assets in order to count towards their financial resource requirements and ASIC will not take regulatory action against licensees that have previously breached the financial resource requirement due to not being able to count the right-of-use lease assets towards those requirements. The no-action position applies until further notice and more information is available on ASIC’s website.
APRA has continued to publish industry-level and fund-level data on the temporary early release of superannuation scheme due to the impacts of COVID-19. In its publication on 27 July 2020, the Early Release Scheme has made approximately $28 billion in payments, with the average payment of $7,719 made within 3.3 business days. At a fund-level, the data shows that 151 of the 176 superannuation funds submitted data on early release payments, with the top 10 funds making the highest number of applications making 2.4 million payments totalling $18.3 billion. Further details on the Early Release Scheme is available on APRA’s website.
ASIC has reiterated the role of superannuation funds in facing the challenges of the COVID-19 pandemic with a particular focus on trustee obligations and delivering for members. As highlighted in our previous update, the regulator has highlighted its priorities as published in its Interim Corporate Plan, and has reiterated supporting members through good communication as well as a number of relief instruments and no-action positions. In particular, ASIC have recently reviewed superannuation trustees’ websites and some other public communications to members about COVID-19 matters and reached out to trustees expressing concerns and requiring amendments with respect to:
Further information about the rule of superannuation funds during the COVID-19 pandemic is available on ASIC’s website.
On 7 July 2020, ASIC provided responsible entities (REs) of managed investment schemes with greater clarify on regulatory issues emanating from the impact of COVID-19. In particular, the regulator has published a series of FAQs addressing what REs need to do when lodging documents, what documents have been electronically submitted, the use of electronic signatures and how to submit relief applications. More information on the duties of REs during the COVID-19 pandemic is available in ASIC’s News Hub as well as ASIC’s FAQs.
APRA published FAQs on 22 July 2020 providing guidance to superannuation trustees on the Pandemic Data Collection (PDC) requirements as a response to COVID-19. The purpose of the PDC is to allow APRA and the government to appreciate and understand the impact of COVID-19 on the superannuation industry. In particular, the PDC will provide:
The first submission is due on 31 July 2020 and will continue until issues faced by registrable superannuation entity (RSE) licensees due to COVID-19 have abated, with a review of the continued need of the PDC scheduled in for late September 2020. Further information on the PDC requirements is available in our previous update, on APRA’s website and in APRA’s FAQs.
ASIC updated its guidance on 30 July 2020 as to how financial firms address and deal with consumer and small business complaints in accordance with their Internal Dispute Resolution processes. Regulatory Guide 271 Internal dispute resolution (RG 271) has been released in order to drive fair and timely complaint outcomes, and:
To supplement RG 271, the regulator will publish a legislative instrument to clarify the enforceable IDR requirements, with the industry to comply with the new standards and requirements from 5 October 2021. Further information about the new IDR requirements as well as RG 271 is available in ASIC’s Media Release.
ASIC has provided further information on its focus areas for financial reporting during COVID-19 conditions for years ending 30 June 2020. Due to the material impact of COVID-19, ASIC has indicated that directors, auditors and preparers should focus on the following areas:
The regulator will review the full year financial reports of approximately 200 listed entities and other public interest entities, with a particular focus on entities and industries adversely affected by COVID-19. As previously indicated, ASIC has extended the deadline to lodge financial reports for listed and unlisted entities under Chapters 2M and 7 of the Corporations Act by one month for certain balance dates up to and including 7 July 2020 balance dates. ASIC’s updated ‘frequently asked questions’ provides additional information on audits and financial reports. Further information on focuses for financial reporting during COVID-19 is available in ASIC’s Media Release.
Publication
The way that local councils issue special levies, and deal with errors made in the passing of those levies, has come under spotlight in the recent High Court of Australia decision.
Publication
On 22 February 2024, Belgium became the EU frontrunner in the fight against ecocides by being the first EU member state to criminalise ecocide, in the new Belgian Criminal Code.
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The Pensions Regulator’s General Code has arrived and will apply from March 27, 2024. In this briefing, we take a step back from the detail. We set out why the General Code really matters and how pension scheme trustees can best make it work for them.
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