Notice of Disqualification – Adam Follington

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address issues within the superannuation industry, particularly to ensure that superannuation entities are managed in the best interests of their members. The Act was introduced by the Australian Parliament with the policy objective of protecting the retirement savings of Australians by regulating the conduct of trustees, investment managers, and custodians of superannuation entities. The Act aims to prevent misconduct, ensure compliance with legal requirements, and maintain the integrity of the superannuation system. The 1993 Act has undergone several amendments to strengthen its provisions and adapt to the evolving needs of the superannuation industry. One such amendment, as evidenced by the notice of disqualification issued to Adam Follington, is the introduction of stricter penalties and oversight mechanisms to deter and address breaches of the Act, thus safeguarding the financial interests of superannuation members.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to responsible officers of corporate trustees managing superannuation entities. In this instance, the Act has been invoked to disqualify Adam Follington from acting as a trustee, investment manager, or custodian of a superannuation entity or as a responsible officer of such entities due to a contravention of the Act by the corporate trustee for which he was responsible at the time. The disqualification is applicable across the Commonwealth of Australia, and the decision to disqualify is effective immediately upon notice. The Act also includes provisions for the potential revocation of such disqualifications and allows for judicial review of the decision by the Commissioner if the disqualified party contests the decision within 21 days of receiving notice. Additionally, there is a criminal penalty for any disqualified person who knowingly continues to act in the roles prohibited by the Act.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) includes provisions that empower the Commissioner of Taxation to disqualify individuals from being involved in the management of superannuation entities. Specifically, under subsection 126A(1) of the SISA, a person can be disqualified if they are a responsible officer of a corporate trustee that has contravened the SISA, and the seriousness of the contravention warrants such a disqualification. In this case, Adam Follington has been disqualified under these provisions by a delegate of the Commissioner, Emma Rosenzweig, who has determined that Mr. Follington meets the criteria for disqualification. The disqualification requires Mr. Follington to cease any involvement with superannuation entities as a trustee, investment manager, or custodian. This includes not being able to act as a responsible officer or being associated with any body corporate that assumes such roles. This prohibition is designed to ensure that individuals who have been part of serious breaches of the SISA do not continue to manage superannuation funds, thereby protecting the interests of superannuation members. The disqualification takes immediate effect, as outlined in the notice dated 27 September 2022. Under section 126K of the SISA, it is an offence for a disqualified person to continue to act in any capacity governed by the disqualification. This includes being or acting as a trustee, investment manager, or custodian of a superannuation entity. The seriousness of this offence is underscored by the potential penalty, which can include up to two years in jail. This serves as a deterrent to those who might otherwise ignore the disqualification and continue their involvement in superannuation management. There are avenues for recourse and potential revocation of the disqualification. Under subsection 126A(5) of the SISA, the disqualification can be revoked either by the Commissioner's office on their own initiative or following a written application from the disqualified person. Additionally, under section 344 of the SISA, Mr. Follington has the right to request a reconsideration of the decision within 21 days of receiving notice, provided he submits his reasons in writing. These provisions ensure that the disqualification process is fair and that there are mechanisms in place for review and potential reinstatement.