Notice of Disqualification – Alexandra Clissold - 24 January 2024

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address the need for stringent regulation of the superannuation industry in Australia, aiming to protect the interests of superannuation fund members by ensuring that trustees, investment managers, and custodians act in their best interests. This Act was introduced by the Commonwealth Parliament with a clear policy objective to maintain the integrity and stability of the superannuation system, thereby fostering public confidence in the sector. The Act empowers the Commissioner of Taxation to disqualify individuals from performing certain roles within the superannuation industry if they are found to have contravened the provisions of the Act in a manner that warrants such a sanction. This legislative framework is designed to deter misconduct and ensure that those who manage superannuation funds do so with the highest standards of responsibility and accountability.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the superannuation industry, specifically targeting conduct and transactions that relate to superannuation entities. This Commonwealth legislation governs the administration, regulation, and oversight of the superannuation industry across Australia, ensuring that superannuation entities are managed in a manner that protects the interests of superannuation members. The Act extends its reach to trustees, investment managers, custodians, and responsible officers of superannuation entities, irrespective of where these entities are located within the country. While the Act broadly applies to the entire superannuation industry nationwide, it does provide certain exclusions and exemptions, particularly for small APRA-regulated funds, small public sector funds, and self-managed superannuation funds (SMSFs) with specific asset thresholds. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, such as regulations or determinations, which can provide further detail or specific instances of application not covered in the primary legislation. These instruments can be used to refine the application of the Act and address new or emerging issues within the superannuation industry.

Key Provisions

The key operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) pertinent to this notice include subsection 126A(1) and subsection 126A(6). Subsection 126A(1) empowers the Commissioner of Taxation to disqualify individuals from being involved in superannuation entities if they are found to have contravened the Act, particularly if the seriousness of the contraventions justifies such action. Subsection 126A(6) mandates that the Commissioner must provide a notice of disqualification to the individual concerned, which is exactly what has been done in this case with Alexandra Clissold. This notice specifies the grounds for the disqualification and informs the individual that the disqualification is effective immediately from the date of issuance. The SISA imposes several obligations and requirements on individuals who are disqualified under its provisions. Firstly, a disqualified person must refrain from acting or being involved in any capacity, such as a trustee, investment manager, or custodian of a superannuation entity. This requirement is explicitly stated in section 126K of the Act. Additionally, any body corporate that is a trustee, investment manager, or custodian of a superannuation entity must also ensure that a disqualified individual does not participate in any capacity related to the management or administration of the superannuation entity. Failure to adhere to these obligations can lead to severe consequences. There are significant penalties and consequences for breaches of the SISA, particularly for a disqualified person who knowingly continues to act in a capacity restricted by the disqualification. As noted in Note 2, such an offence is punishable under section 126K of the Act, with a maximum penalty of two years imprisonment. This underscores the seriousness of the disqualification and the importance of compliance with the Act's provisions. Furthermore, the notice itself will be published as a Notifiable Instrument in the Federal Register of Legislation under subsection 126A(7), making the disqualification publicly known. In cases where a disqualified person believes the disqualification was unjust or seeks to have it revoked, there are provisions for reconsideration. Under section 344 of the SISA, Alexandra Clissold, or any other affected party, has the right to request the Commissioner to reconsider the decision. This request must be made in writing within 21 days of receiving notice of the decision and must include the reasons why the decision is thought to be incorrect. Additionally, there is a potential for the disqualification to be revoked under subsection 126A(5), either on the initiative of the Commissioner or upon a written application by the disqualified individual.