Notice of Disqualification – Adam Faichney - 1 March 2024

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address significant governance and regulatory gaps in the supervision and regulation of the superannuation industry in Australia. The Act was introduced by the Australian Parliament to ensure the integrity, efficiency, and sustainability of the superannuation system, which is a critical component of Australia's retirement income framework. The SISA provides a comprehensive regulatory structure to govern the conduct of trustees, investment managers, and custodians of superannuation entities, and it includes provisions for the disqualification of individuals who have breached the Act's requirements. The policy objective of the Act is to protect the interests of superannuation fund members by ensuring that responsible officers and trustees adhere to high standards of conduct and compliance. This legislation is essential in maintaining public confidence in the superannuation system and ensuring that retirement savings are managed prudently and ethically.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the administration and management of superannuation entities in Australia. Specifically, it pertains to responsible officers and trustees of superannuation entities, ensuring compliance with the Act’s regulatory framework. The Act's jurisdictional reach is national, applying across all states and territories of Australia, and is enforced by the Commonwealth. The disqualification provisions in the Act extend to individuals who have been found to have contravened the Act’s provisions while serving as a responsible officer of a corporate trustee, with the disqualification taking effect immediately upon notice. Additionally, the Act provides for the publication of disqualification notices as Notifiable Instruments in the Federal Register of Legislation, ensuring transparency and accountability. The Act also imposes strict penalties for individuals who continue to act in a capacity prohibited by their disqualification, with the maximum penalty being two years imprisonment. The Commissioner of Taxation has the authority to revoke a disqualification on their own initiative or upon a written application by the disqualified individual, and affected parties can request a reconsideration of the decision within 21 days of receiving the notice.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) contains various sections that govern the supervision of superannuation entities and the disqualification of individuals from participating in these entities. One such section is subsection 126A(6) (1), which allows the Commissioner of Taxation to disqualify individuals from being involved in superannuation entities if certain conditions are met. In this case, Adam Faichney has been disqualified under subsection 126A(2) (2) because he was a responsible officer of a corporate trustee that contravened the SISA on multiple occasions, providing sufficient grounds for his disqualification. The SISA imposes specific obligations and requirements on parties involved with superannuation entities, particularly on responsible officers. These officers must ensure that the entities they oversee comply with the SISA and its regulations. Failure to do so can result in disqualification. The disqualification is immediate and prohibits the disqualified person from acting as a trustee, investment manager, or custodian of a superannuation entity, or from being a responsible officer of such an entity. The disqualification notice serves as a formal notification to the individual and is published as a Notifiable Instrument in the Federal Register of Legislation, as mandated by subsection 126A(7) (3). In addition to the disqualification, the SISA outlines significant consequences for breaches. Under section 126K (4), it is an offence for a disqualified person who is aware of their disqualification to continue acting in a capacity that they are barred from. This includes being, or acting as, a trustee, investment manager, or custodian of a superannuation entity, or as a responsible officer. The maximum penalty for this offence is a two-year jail term, as stated in the legislation. This serves as a strong deterrent against circumventing the disqualification. Furthermore, the SISA provides for the potential revocation of disqualification under subsection 126A(5) (5). The disqualification may be revoked either on the initiative of the Commissioner of Taxation or upon a written application from the disqualified person. If Adam Faichney wishes to have his disqualification reviewed or overturned, he must submit a written application. Additionally, section 344 (6) allows for reconsideration of the disqualification decision by the Commissioner if the affected party is dissatisfied with the initial decision. This reconsideration request must be made in writing within 21 days of receiving the disqualification notice and must include the reasons for dissatisfaction.