Regulator updates
ATO Practical Compliance Guideline PCG 2020/5: Applying the non-arm's length income provisions to 'non arm's length expenditure' – ATO compliance approach for complying superannuation entities (1 June 2020)
The Guideline provides a transitional compliance approach for a complying superannuation entity concerning the application of the amendments to non-arm's length income (NALI) rules in the Income Tax Assessment Act 1997 (Cth), in respect of the 2019 to 2021 financial years.
The Guideline states that the ATO will not allocate compliance resources to determine whether the NALI provisions apply to a complying superannuation fund for the 2019 to 2021 financial years where the fund incurred certain non-arm's length expenditure of a general nature that has a sufficient nexus to all ordinary and/or statutory income derived by the fund in those respective financial years (for example, non-arm's length expenditure on accounting services).
This transitional compliance approach does not apply where the fund incurred non-arm's length expenditure that is directly related to the fund deriving particular ordinary or statutory income.
ASIC Regulatory Guide 272 Product intervention power (17 June 2020)
The Regulatory Guide provides an overview of ASIC's product intervention power, under Part 7.9A of the Corporations Act, and sets out:
- the scope of the power, including products that can be subject to an intervention order and the types of orders ASIC may consider making
- when and how ASIC may exercise the power, including how we may determine when consumer detriment is significant and how we may intervene
- the process for making an intervention order, including how we may consult with affected parties, when an order will commence, the process by which an order can be extended, amended or revoked, and the consequences of breaching an order.
ASIC frequently asked questions: COVID-19 – Information for superannuation trustees. Frequently asked questions (22 June 2020)
ASIC has updated its COVID-19 frequently asked questions by including the following questions:
"1F. How should trustees communicate with members about the Government's temporary reduction to the minimum drawdown rates for the 2020-21 financial year?"
"2D. How can I find out about how COVID-19 has affected other ASIC activities?"1
ATO updated Successor fund transfer reporting protocol is available (26 June 2020)
The ATO updated its Successor fund transfer (SFT) reporting protocol in order to provide more detailed guidance for funds undertaking an SFT. These updates include:
- adding the definition of a lost member and making it clear that a member's 'lost' status moves from the transferring fund to the receiving fund
- definitions for all unclaimed superannuation money (USM) categories, including legislative references, to assist funds in assessing accounts for USM reporting during an SFT
- guidance on how to confirm the requirements for tax relief for merging APRA super funds.
Legislation
Superannuation Guarantee (Administration) Amendment (Jobkeeper Payment) Regulations 2020 (3 June 2020)
The Regulations amend the Superannuation Guarantee (Administration) Regulations 2018 (Cth) to exclude the requirement for employers to make superannuation guarantee contributions on JobKeeper payments.
ASIC Corporations (Amendment) Instrument 2020/565 (12 June 2020)
The Instrument amends ASIC Corporations (COVID-19—Advice-related Relief) Instrument 2020/355, which provides certain relief in respect of advice during the COVID-19 pandemic, in order to repeal that relief in November 2020.
Superannuation Supervisory Levy Imposition Amendment Act 2020 (19 June 2020)
The Act amends the Superannuation Supervisory Levy Imposition Act 1998 (Cth) to:
- increase the statutory upper limit on the superannuation industry supervisory levy to $10 million for the 2021 financial year
- amend the calculation of the indexation factor used to establish the statutory upper limits applying in later years.
Treasury Laws Amendment (2019 Measures No. 3) Act 2020 (22 June 2020)
The Act has the following effects:
- reintroduces section 17 of the SIS Act that clarifies when a person is involved in a contravention
- amends the ATO notification requirements in respect of lost, unclaimed and inactive low balance accounts
- introduces the requirement that trustees pay fee rebates to exiting members, under section 99G of the SIS Act (the Protecting Your Superannuation Package Act omitted this requirement), but does not require exiting members to be paid out within three months after exit. Therefore trustees may pay out all rebates (for current and past members) up to three months after the end of financial year.
Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (22 June 2020)
The Act requires all directors to verify their identity in order to be issued a permanent director identification number (DIN) which will act as a unique identifier that traces each director's professional profile, official positions and corporate relationships over time.
ASIC Corporations, Superannuation and Credit (Amendment) Instrument 2020/99 (26 June 2020)
The Instrument amends the application of the ASIC Corporations and Credit (Internal Dispute Resolution—Transitional) Instrument 2019/965 (Transitional Instrument) to complaints received before 5 October 2021.
On 24 September 2019, ASIC made ASIC Corporations and Credit (Repeal) Instrument 2019/966 (Repeal Instrument) and the Transitional Instrument.
The Repeal Instrument repealed a number of ASIC Class Orders that implemented ASIC's existing policy in relation to internal dispute resolution for (among others) superannuation fund trustees.
The Transitional Instrument preserved the existing internal dispute resolution policy for a short transitional period, until 30 June 2020, pending the expected finalisation of ASIC's new internal dispute resolution standards and requirements. The release of ASIC's new internal dispute resolution standards and requirements was delayed due to the impacts of COVID-19. The new standards and requirements will be publicly released in July 2020 and will apply to complaints received by a financial firm on or after 5 October 2021.
Footnote
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
