Financial Sector Reform (Amendments and Transitional Provisions) Amendment Regulations 1999 (No. 1) 1999 No. 30
EXPLANATORY STATEMENT
STATUTORY RULES 1999 NO. 30
Issued by the authority of the Minister for Financial Services and Regulation
Financial Sector Reform (Amendments and Transitional Provisions) Act 1998
Financial Sector Reform (Amendments and Transitional Provisions) Amendment Regulations 1999 (No. 1)
The Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 (the Act) and the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1998 (the Principal Regulations) were part of a package of legislation that implemented the Government's response to the recommendations of the Financial System Inquiry. They include transitional provisions necessary to implement the regulatory and legislative framework arising from the Government's response.
Schedule 19 of the Act provides for the making of these transitional provisions. Item 47 of Schedule 19 provides that the Governor-General may make regulations for the purposes of the Act. Item 46 of Schedule 19 provides that regulations may be made for the purposes of transitional matters relating to the establishment of the Australian Prudential Regulation Authority (APRA).
The Act, inter alia, made amendments to various legislation that was either administered by, or included references to, the former Insurance and Superannuation Commissioner (the Commissioner), to enable this legislation to be administered by APRA.
At the time, however, no amendment was made to the Occupational Superannuation Standards Amendment Act 1993 (the Amendment Act) to allow APRA to take over the role of the former Commissioner in respect of the compliance system provisions of the Occupational Superannuation Standards Act 1987 (the OSS Act, now named the Superannuation (Excluded Funds) Taxation Act 198 7) which were preserved by section 16 of the Amendment Act (the "preserved OSS Act provisions").
The Commissioner's responsibilities included the receipt and processing of annual returns for superannuation entities (ie, superannuation funds, approved deposit funds and pooled superannuation busts) for the years of income prior to the 1994-95 year of income, and the issuing of notices to trustees of complying funds and to the Commissioner of Taxation for tax concession purposes.
This means that, before the making of these Regulations, neither APRA nor any other agency had any supervisory role in respect of those provisions for the years of income of a superannuation entity prior to the 1994-95 year of income.
It is appropriate that APRA performs these functions under the "preserved OSS Act provisions" because APRA performs similar functions in relation to superannuation entities regulated under the Superannuation Industry (Supervision) Act 1993.
The purpose of the Regulations is to amend the Principal Regulations to address this undesirable situation. Schedule 1 of the Regulations inserts a new Regulation 6 into the Principal Regulations. Regulation 6 allows:
* APRA to validly do all things that must or may, be done by the Commissioner;
* an action to be validly taken in relation to APRA as if it was taken in relation to the Commissioner;
* the imposition on APRA of all obligations imposed on the Commissioner, and the allowing of such obligations to be carried out by an APRA staff member; and
* an immunity or privilege of the Commissioner, or of a superannuation standards officer, to be an immunity or privilege of APRA and an APRA staff member;
in respect of the "preserved OSS Act provisions".
The Regulations are described in detail in the Attachment.
The Regulations commence on gazettal.
ATTACHMENT
FINANCIAL SECTOR REFORM (AMENDMENTS AND TRANSITIONAL PROVISIONS) AMENDMENT REGULATIONS 1999 (No.1)
Regulation 1 - Name of regulations
The name of these Regulations is the Financial Sector Reform (Amendments and Transitional Provisions) Amendment Regulations 1999 (No. 1).
Regulation 2 - Commencement
Regulation 2 provides that the Regulations commence on gazettal.
Regulation 3 - Amendment of Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1998
Regulation 3 provides that the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1998 (the Principal Regulations) are amended as set out in Schedule 1 of these Regulations.
Schedule 1 - Amendment of Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1998
Background
On commencement of the Superannuation Industry (Supervision) Act 1993 (the SIS Act), section 16 of the Occupational Superannuation Standards Amendment Act 1993 (the Amendment Act) preserved the compliance system provisions of the Occupational Superannuation Standards Act 1987 (the OSS Act, now named the Superannuation (Excluded Funds) Taxation Act 1987) in relation to the'OSS Act years of income' (ie, the years of income prior to the 1994-95 year of income). These standards are called the "preserved OSS Act provisions" in this Attachment.
The former Insurance and Superannuation Commissioner (the Commissioner) was responsible for the administration of the OSS Act as preserved by section 16 of the OSS Amendment Act (ie, the "preserved OSS Act provisions"). The Commissioner was appointed under the Insurance and Superannuation Commissioner Act 1987 (the ISC Act).
The Commissioner's responsibilities included the receipt and processing of annual returns for funds (ie, superannuation funds, approved deposit funds, and pooled superannuation trusts) for the 'OSS Act years of income', and the issuing of notices to trustees of complying funds and to the Commissioner of Taxation for tax concession purposes.
The Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 (the Act), inter alia, made amendments to various legislation that was either administered by, or included references to, the former Commissioner, to enable this legislation to be administered by the Australian Prudential Regulation Authority (APRA). Among these was the repeal of the ISC Act, and as a consequence, the office of Commissioner was abolished.
At the time, however, no amendment was made to the Amendment Act to allow APRA (or any other agency) to take over the role of the former Commissioner in respect of the provisions of the "preserved OSS Act provisions". This means that, before the making of these Regulations, neither APRA nor any other agency had any supervisory role in respect of those provisions for the years of income of a superannuation entity prior to the 1994-95 year of income.
It is appropriate that APRA performs these functions under the "preserved OSS Act provisions" because APRA performs similar functions in relation to superannuation entities regulated under the SIS Act.
Schedule 19 of the Act provides for the making of transitional regulations necessary to implement the regulatory and legislative framework arising from the Government's response to the recommendations of the Financial System Inquiry, in particular transitional matters relating to the establishment of APRA (item 46 of Schedule 19).
These Regulations are made under that power.
Item [1] New Regulation 6 (Transitional arrangement - preserved OSS Act provisions)
Item 1 inserts a new Regulation 6 into the Principal Regulations. The intention of regulation 6 is to enable APRA to administer the "preserved OSS Act provisions" in the same manner as they were administered by the Commissioner. Regulation 6 has several subregulations.
1 . Subregulation 6(1) defines a number of terms that are used in regulation 6. One of these is the term "preserved OSS Act provisions". These are provisions that mainly relate to the compliance system provisions of the OSS Act. By virtue of section 16 of the Amendment Act, they continue to apply in respect of years of income prior to the 1994-95 year of income as if the amendments and repeals made by the Amendment Act had not been made. Briefly, the "preserved OSS Act provisions" cover:
* the application of the OSS Act in relation to periods before its commencement (section 4);
* the satisfaction of certain conditions by superannuation funds (section 5);
* the satisfaction of certain conditions by approved deposit funds (section 6);
* the satisfaction of certain conditions by pooled superannuation trusts (section 6A);
* operating standards for superannuation funds, approved deposit funds, and pooled superannuation trusts (Part II);
* information to be given to the Commissioner (now APRA) (section 10);
* the Commissioner (now APRA) requiring the production of documents (section 11);
* the giving of notices by the Commissioner (now APRA) as to the satisfaction of the superannuation fund conditions (section 12);
* the Commissioner (now APRA) being able to modify the application of standards relating to prospectuses (section 12A);
* the Commissioner (now APRA) having a discretion to treat funds as satisfying the superannuation fund conditions (section 1,3);
* the giving of notices by the Commissioner (now APRA) as to the satisfaction of the approved deposit fund conditions (section 14);
* the Commissioner (now APRA) having a discretion to treat funds as satisfying the approved deposit fund conditions (section 15);
* the application of certain provisions of the Income Tax Assessment Act 1936 (section 15A);
* the giving of notices by the Commissioner (now APRA) as to the satisfaction of the pooled superannuation trust conditions (section 15B);
* the Commissioner (now APRA) having a discretion to treat funds as satisfying the pooled superannuation trust conditions (section MC);
* the approved form of returns (section 15CA);
* the collection of the superannuation supervisory levy (Part H1AA);
* and the remaining provisions of the OSS Act in so far as they relate to any or all of the provisions mentioned above (for example, definitions under section 3, the review of certain decisions under section 16, secrecy provisions under section 18, etc.).
2. Subregulation 6(2) provides that a thing that, under a preserved OSS Act provision must, or may, be done by the Commissioner, is validly done if done by APRA.
3. Subregulation 6(3) provides that an action that, under a preserved OSS Act provision must, or may, be taken in relation to the Commissioner (ie, by another party), is validly taken if taken in relation to APRA
4. Subregulation 6(4) provides that an obligation imposed on the Commissioner, under a preserved OSS Act provision, is imposed on APRA, and may be carried out by an APRA staff member.
5. Subregulation 6(5) provides that an immunity or privilege of the Commissioner, or of a superannuation standards officer, under a preserved OSS Act provision, is an immunity or privilege of APRA and an APRA staff member.