Corporations Point-in-Time Service Updates

Wednesday 24 April 2019 @ 9.44 a.m.

The Corporations Point-in-Time Service has been updated to include the Treasury Laws Amendment (Mutual Reforms) Act 2019 (Cth) (Act 37 of 2019), the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 (Cth) (Act 40 of 2019), the Corporations Amendment (Strengthening Protections for Employee Entitlements) Act 2019 (Cth) (Act 44 of 2019), the Treasury Laws Amendment (2019 Measures No. 1) Act 2019 (Cth) (Act 49 of 2019), the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth) (Act 50 of 2019), the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2019 (Cth), the Treasury Laws Amendment (Transition of Chi-X to National Guarantee Fund) Regulations 2019 (Cth), the Treasury Laws Amendment (ASIC Cost Recovery and Fees) Regulations 2019 (Cth), the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Regulations 2019 (Cth), the Treasury Laws Amendment (AFCA Cooperation) Regulations 2019 (Cth), the Corporations Amendment (Proprietary Company Thresholds) Regulations 2019 (Cth) and the Treasury Laws Amendment (Protecting Your Superannuation Package) Regulations 2019 (Cth).

Act 37 of 2019

This Act gives effect to recommendations 5, 8 and 9 of the Hammond Report to:

  • introduce a definition of a mutual entity into the Corporations Act;
  • remove the uncertainty for transferring financial institutions and friendly societies in respect of the demutualisation provisions in Part 5 of Schedule 4 of the Corporations Act; and
  • expressly permit mutual entities registered under the Corporations Act to issue equity.

Act 40 of 2019

Schedule 1 to this Act amends the Superannuation Industry (Supervision) Act 1993 (SIS Act) to strengthen the obligation on superannuation trustees to consider the appropriateness of their MySuper product offering annually including how that product continues to deliver appropriate outcomes to MySuper members.
Schedule 2 to this Act amends the SIS Act to give the Australian Prudential Regulation Authority (APRA) an enhanced capacity to refuse a registerable superannuation entity (RSE) licensee a new authority to offer a MySuper product or to cancel an existing authority.
Schedule 3 to this Act amends the SIS Act to impose civil and criminal penalties on directors of RSE licensees who fail to execute their responsibilities to act in the best interests of members, or who use their position to further their own interests to the detriment of members.
Schedule 4 to this Act amends the SIS Act to strengthen APRA’s supervision and enforcement powers when a change of ownership or control of an RSE licensee takes place.
Schedule 5 to this Act amends the SIS Act to strengthen APRA’s supervision and enforcement powers to include the power to issue a direction to an RSE licensee where APRA has prudential concerns.
Schedule 6 to this Act amends the Corporations Act 2001 to refine the requirements for RSE licensees to make publically available their portfolio holdings.
Schedule 7 to this Act amends the SIS Act to require RSE licensees to hold annual members’ meetings. The meetings are to discuss the key aspects of the fund and provide members with a forum to ask questions about all areas of the fund’s performance and operations.
Schedule 8 to this Act amends the Financial Services (Collection of Data) Act 2001 (FSCODA) to provide APRA with the ability to obtain information on expenses incurred by RSE and RSE licensees in managing or operating the RSE.
Schedule 9 to this Act allows civil and criminal penalties to be imposed on the trustee of a superannuation fund who uses goods or services to influence employers to nominate the superannuation fund as the default fund or influence employers to encourage their employees to nominate the fund as their choice of fund (no treating of employers).

Act 44 of 2019

The Act strengthens enforcement and recovery options to deter behaviours that prevent, avoid or significantly reduce the recovery of employment entitlements in insolvency. These behaviours can cause the improper shift of employee entitlement costs onto Australian taxpayers through utilisation of the taxpayer funded Fair Entitlements Guarantee (FEG) scheme. The Act also introduces new provisions that will facilitate the disqualification of company directors and other officers where they have a track record of corporate contraventions, and inappropriately using the FEG scheme to pay outstanding employee entitlements.    

Act 49 of 2019

Schedule 2 of this Act and the Excise Tariff Amendment (Supporting Craft Brewers) Act 2019 amend the Excise Tariff Act and the Excise Act to extend concessional rates of excise to brewers that supply draught beer in kegs or other containers that have a capacity of 8 litres or more that are designed for use with a pressurised gas delivery system or pump delivery system.

Schedule 3 to the Act amends the ITAA 1997 to continue to provide the Global Infrastructure Hub Ltd (the Hub) with an exemption from the liability to pay income tax on its ordinary and statutory income.

Schedule 4 to the Act makes a number of miscellaneous amendments to legislation in the Treasury portfolio. These amendments are part of the Government’s commitment to the care and maintenance of the Treasury portfolio legislation. These amendments make minor technical changes to correct spelling errors, bring provisions in line with drafting conventions and repeal inoperative provisions. The Schedule also makes minor technical amendments to remove administrative inefficiencies and clarifies the law to ensure that it operates in accordance with policy intent.

Act 50 of 2019

Schedule 1 to this Act amends the Corporations Act to introduce design and distribution obligations in relation to financial products.

Schedule 2 to this Act amends the Corporations Act and the Credit Act to introduce a product intervention power for ASIC to prevent or respond to significant consumer detriment.

Treasury Laws Amendment (Professional Standards Schemes) Regulations 2019

These regulations update the list of prescribed professional schemes that have capped civil liability for misleading and deceptive conduct under the Australian Securities and Investments Commission Act 2001, the Competition and Consumer Act 2010 and the Corporations Act 2001. This provides consistency across Commonwealth and state and territory laws.    

Treasury Laws Amendment (Transition of Chi-X to National Guarantee Fund) Regulations 2019

These regulations amend the Corporations Regulations 2001 to facilitate Chi-X’s transition to the National Guarantee Fund (if admitted as a member of the Securities Exchange Guarantee Corporation).
The regulations aim to provide clarity to investors regarding when claims for loses in relation to Chi-X can be made on the National Guarantee Fund, the compensation fund administered by the SEGC, at such time Chi-X becomes a member. The regulations do not change the current operation of the NGF.

Treasury Laws Amendment (ASIC Cost Recovery and Fees) Regulations 2019

The purpose of the Treasury Laws Amendment (ASIC Cost Recovery and Fees) Regulations 2019 is to give effect to Government announcements by amending the ASIC Supervisory Cost Recovery Levy Regulations 2017, the Business Names Registration (Fees) Regulations 2011, the Corporations (Fees) Regulations 2001, the National Consumer Credit Protection (Fees) Regulations 2010 and the Superannuation Auditor Registration Imposition Regulation 2012 to:

  • create a new subsector to enable ASIC to recover its regulatory costs incurred from its close and continuous monitoring of Australia’s largest institutions – as announced by the Government on 7 August 2018;
  • exempt journalists from paying certain registry search fees, from 1 July 2019 – as announced by the Government on 30 July 2018;
  • reduce the fee to access company roles and relationship extracts from $40 to $19, from 1 July 2019 – as announced by the Government on 30 July 2018; and
  • make other minor amendments to the Levy and Fees Regulations to ensure ASIC’s regulatory costs are more accurately reflected.

Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Regulations 2019

This instrument amends multiple instruments to prescribe the list of offence, civil penalty and key requirement provisions that are subject to an infringement notice regime, ensure penalties and some offences in regulations are consistent with the strengthened penalty framework inserted by the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019, update a number of cross-references and provide for contingent amendments.  

Treasury Laws Amendment (AFCA Cooperation) Regulations 2019

These regulations impose a requirement that members of the Australian Financial Complaints Authority must provide the Australian Financial Complaints Authority with reasonable assistance to allow the Australian Financial Complaints Authority to promptly and fairly resolve complaints.    

Corporations Amendment (Proprietary Company Thresholds) Regulations 2019

The purpose of the Corporations Amendment (Proprietary Company Thresholds) Regulations 2019 (the Regulations) is to increase the thresholds for determining whether a company is a large or small proprietary company for a financial year.

Under the Act, large proprietary companies are required to lodge an annual financial report, a director’s report and an auditor’s report with the Australian Securities and Investments Commission (ASIC) and are required to have a whistleblower policy in place. Small proprietary companies are generally required to keep sufficient financial records and are only required to lodge or audit financial reports if directed by ASIC or 5 per cent or more of their shareholders.

The Regulations adjust these thresholds by doubling them as follows:

  • increasing the annual consolidated revenue threshold to $50 million or more;
  • increasing the value of gross assets to $25 million or more; and
  • increasing the employee size to 100 employees or more.

Treasury Laws Amendment (Protecting Your Superannuation Package) Regulations 2019

The purpose of the Regulations is to supplement and support the Protecting Your Super Package. 

The Regulations amend the Corporations Regulations to support the insurance changes by setting out:

  • when a trustee must notify a member that a member’s account has been inactive and that insurance may no longer be offered or maintained without a direction from the member; and 
  • how a trustee must inform a member that the member can cancel their insurance where the member has previously directed the trustee to take out or maintain insurance coverage.

Amendments are also required to the Superannuation Guarantee (Administration) Regulations 2018 (SG Regulations) as a result of the changes to the Superannuation Industry (Supervision) Act 1993 (the SIS Act) which stop insurance on inactive accounts. The Regulations amend the SG Regulations to remove the requirement that an employer make contributions to a fund that offers a certain level of insurance when the trustee cannot offer insurance as a result of the Protecting Your Super Package. 

From 1 July 2019, amendments to the SIS Act mean trustees will be unable to provide insurance by default when an account has been inactive for more than 16 months. A member will have to ask for the insurance to be provided. The Corporation Regulations 2001 (the Corporations Regulations) set out the disclosure and notification obligations for a trustee. The Regulations amend the Corporations Regulations to support the insurance changes by setting out:

  • when a trustee must notify a member that a member’s account has been inactive and that insurance may no longer be offered or maintained without a direction from the member; and 
  • how a trustee must inform a member that the member can cancel their insurance where the member has previously directed the trustee to take out or maintain insurance coverage.

Amendments are also required to the Superannuation Guarantee (Administration) Regulations 2018 (SG Regulations) as a result of the changes to the SIS Act which stop insurance on inactive accounts. The Regulations amend the SG Regulations to remove the requirement that an employer make contributions to a fund that offers a certain level of insurance when the trustee cannot offer insurance as a result of the Protecting Your Super Package.

The Regulations also make other changes relating to fees and the consolidation of inactive low balance accounts.

These amendments have been updated in the Point-in-Time Corporations Service current to 23 April 2019. (NB: subscription required).

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