ASIC CLASS ORDER [CO 14/1249]
EXPLANATORY STATEMENT
Prepared by the Australian Securities and Investments Commission
Corporations Act 2001
The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 14/1249] under subsection 1020F(1) of the Corporations Act 2001 (the Act).
Subsection 1020F(1) of the Act provides that ASIC may exempt a person or class of persons from all or specified provisions of Part 7.9 of the Act.
- Background
A trustee of a superannuation fund must provide, at least annually or when a member leaves the fund, a periodic statement to a member of the fund to help the member understand their investment in the fund.
The Superannuation and Corporations Legislation Amendment (Low Income Superannuation Contribution) Regulation 2013 introduced paragraph 7.9.20(2A) of the Corporations Regulations 2001 which requires that superannuation trustees must state separately in periodic statements given to members:
a) the amount of Government co-contributions received; and
b) the amount of low income superannuation contributions (LISC) received.
The exemption set out in ASIC Class Order [CO 13/1420] provides interim relief from paragraph 7.9.20(2A) so that trustees are not required to separately report the amount of Government co-contributions and LISC received, but can instead group those amounts together as a total amount, so long as certain conditions are met.
In October 2013, the Government released an exposure draft of the Minerals Resources Tax Repeal and Other Measures Bill 2013 (Bill) which proposed to abolish payment of the LISC from 1 July 2014.
In anticipation of the impending abolition of the LISC from 1 July 2014, CO 13/1420 was issued to facilitate business given the short length of time trustees would have to implement systems changes necessary to comply with paragraph 7.9.20(2A), mitigate trustee's costs of complying and provide certainty pending the outcome of the Bill.
Relief under ASIC Class Order [CO 13/1420] was therefore provided to apply to periodic statements with a reporting period ending on or before 31 December 2014.
However, the Minerals Resource Rent Tax Repeal and Other Measures Act 2014 now
retains the LISC until 30 June 2017. This means that trustees will have to separately report Government co-contributions and LISC in respect of reporting periods covering a relatively short period of time (1 January 2015 - 1 July 2017).
2. Purpose of the class order
The purpose of this class order is to extend the exemption in CO13/1420 for a further six months so that it now applies to periodic statements with reporting periods ending on or before 30 June 2015. This six months extension of time will provide further time to make appropriate changes to deal with the ongoing reporting of LISC.
3. Operation of the class order
This class order operates to extend the relief given from the requirement to separately report Government co-contributions and LISC in periodic statements so that it applies to periodic statements with reporting periods that end on or before 30 June 2015.
4. Consultation
ASIC undertook an informal consultation process with respect to extending the operation of [CO 13/1420], even though the extension is only minor in nature. The purpose of extending the interim relief is to enable further consideration as to how best to deal with the ongoing obligation to separately report LISC in periodic statements. To this end, we consulted with the Australian Government Treasury and with the relevant industry bodies, and those that responded had no objection to a six months extension.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
ASIC Class Order [CO 14/1249]
This class order is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the class order
The Superannuation and Corporations Legislation Amendment (Low Income Superannuation Contribution) Regulation 2013 introduced paragraph 7.9.20(2A) of the Corporations Regulations 2001. This requires that superannuation trustees must state separately in periodic statements given to members:
a) the amount of Government co-contributions received; and
b) the amount of low income superannuation contributions (LISC) received.
ASIC Class Order [CO 13/1420] provides interim relief from the requirement in paragraph 7.9.20(2A) to separately report these payments on certain conditions including a requirement to report an aggregate amount. The interim relief applies to periodic statements for reporting periods ending on or before 31 December 2014.
The purpose of this class order is to extend the exemption in [CO 13/1420] for a further six months so that it now applies to periodic statements for reporting periods ending on or before 30 June 2015.
Human rights implications
This class order does not engage any of the applicable rights or freedoms.
Conclusion
This class order is compatible with human rights as it does not raise any human rights issues.