Notice of Disqualification – Carolynn Chapman - 29 May 2025

Overview

The Superannuation Industry (Supervision) Act 1993 was enacted to address the need for effective regulation and supervision of the superannuation industry in Australia, ensuring that trustees and other responsible officers act in the best interests of superannuation fund members. This Act was passed by the Commonwealth Parliament with the primary objective of protecting the financial interests of superannuation fund members by establishing a robust regulatory framework. The legislation provides the Commissioner of Taxation with the authority to disqualify individuals who have acted in a manner that contravenes the Act, thereby preventing them from holding responsible positions within the superannuation industry. This measure is intended to maintain the integrity and stability of the superannuation system, ensuring that those entrusted with managing retirement funds adhere to the highest standards of conduct.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) governs the operation and regulation of superannuation funds in Australia. The Act applies to various entities, including trustees, investment managers, custodians, and responsible officers of superannuation funds. It encompasses conduct and transactions related to superannuation entities, ensuring compliance with regulatory standards. The Act has a national reach, as it is a Commonwealth statute. The notice of disqualification for Carolynn Chapman, a responsible officer of a corporate trustee, is an example of the Act's application. The disqualification occurs when a contravention of the Act has occurred, and the seriousness of the breach justifies the action. Any disqualified person who acts in a prohibited capacity may face criminal penalties, including up to two years in jail. Additionally, the Act allows for the disqualification to be revoked either by the authority or upon application by the disqualified person. Those dissatisfied with a decision can request a reconsideration by the Commissioner within 21 days of receiving the notice. The notice of disqualification will be published as a Notifiable Instrument in the Federal Register of Legislation.

Key Provisions

The main operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) relevant to the disqualification of Carolynn Chapman include subsection 126A(2) (which allows for disqualification), subsection 126A(6) (which mandates the giving of notice), and subsection 126A(7) (which requires the publication of the disqualification notice). Under these provisions, the Commissioner of Taxation has the authority to disqualify a person from acting as a trustee, investment manager, or custodian of a superannuation entity, or from being a responsible officer of such entities, if there are grounds to believe that the person has contravened the Act and the seriousness of the contravention justifies such a disqualification. The notice of disqualification, as required by subsection 126A(6), informs the disqualified person of the decision and the reasons for it. The obligations and requirements imposed by the Act on Carolynn Chapman and other relevant parties are primarily centred around compliance with the Act's provisions. Specifically, Carolynn Chapman, as a former responsible officer, is required to refrain from acting as a trustee, investment manager, or custodian of any superannuation entity, or from being a responsible officer of any body corporate that acts in such capacities. This restriction is designed to prevent individuals who have been found to contravene the SISA from continuing to manage superannuation funds. Furthermore, the Act requires the Commissioner of Taxation to publish the disqualification notice as a Notifiable Instrument in the Federal Register of Legislation, ensuring transparency and public awareness of such disqualifications. In terms of offences and penalties, the Act imposes significant consequences for any disqualified person who continues to act in the prohibited capacities. Section 126K of the SISA establishes that it is an offence for a disqualified person to be, or act as, a trustee, investment manager, or custodian of a superannuation entity, or to be a responsible officer of a body corporate that acts in these capacities. The maximum penalty for this offence is two years imprisonment, underscoring the seriousness with which the Act regards such breaches. Additionally, the Act provides for the possibility of revocation of the disqualification under subsection 126A(5), either at the initiative of the Commissioner or upon a written application by the disqualified person. Should Carolynn Chapman be dissatisfied with the decision to disqualify her, she has the right to request a reconsideration of the decision under section 344 of the SISA. This request must be made in writing within 21 days of receiving notice of the disqualification and must include the reasons why she believes the decision is incorrect. This provision ensures that individuals have an opportunity to contest decisions that they consider unjust, providing a measure of fairness and due process within the framework of the Act.