Notice of Disqualification – Clifford May - 19 June 2024

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted by the Australian Parliament to address the need for regulation and oversight within the superannuation industry. The Act was introduced to ensure the proper management and administration of superannuation funds, protecting the interests of superannuation members and beneficiaries. It provides a framework for the regulation of trustees, investment managers, and custodians, as well as establishing penalties for breaches of the Act. This notice of disqualification under the SISA serves to uphold these objectives by ensuring that individuals who have contravened the Act are appropriately sanctioned, thereby maintaining the integrity of the superannuation system. The notice, issued by Emma Rosenzweig, a delegate of the Commissioner of Taxation, informs Clifford May that he has been disqualified from acting in certain capacities within the superannuation industry due to contraventions of the SISA. The disqualification aims to prevent individuals who have breached the Act from continuing to manage or influence superannuation funds, thereby protecting the interests of superannuation members. This action reflects the policy objective of the SISA to maintain high standards of conduct and compliance within the superannuation sector.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to individuals and entities involved in the superannuation industry, including trustees, investment managers, custodians, and responsible officers of superannuation entities. The Act's jurisdiction extends across Australia, as it is a Commonwealth Act, ensuring uniform regulation of the superannuation sector. The Act specifically targets conduct that contravenes its provisions, imposing strict penalties for breaches, including the possibility of disqualification. The disqualification, as exemplified in the notice to Clifford May, is a significant measure taken when the seriousness of the contraventions warrants such action. The notice of disqualification informs the individual of the grounds for their disqualification and the immediate effect of the decision, as well as the potential for revocation under certain conditions. The Act also mandates that details of such disqualifications be published, thereby maintaining transparency and accountability within the industry.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) includes specific provisions that govern the disqualification of individuals who contravene its requirements. Under section 126A(1) of the SISA, the Commissioner of Taxation has the authority to disqualify individuals from participating in the superannuation industry if they are found to have contravened the SISA on multiple occasions and the nature and seriousness of these contraventions warrant such action. Section 126A(6) mandates that the Commissioner must provide written notice to the disqualified individual, detailing the reasons for the disqualification. In the case of Clifford May, such a notice was issued on 19 June 2024, stating that he has been disqualified based on multiple contraventions of the SISA. The disqualification under section 126A(1) imposes significant obligations and requirements on the disqualified individual. Once disqualified, an individual is prohibited from acting or being involved in any capacity as a trustee, investment manager, custodian, responsible officer, or body corporate associated with a superannuation entity. This restriction aims to protect the integrity and compliance of the superannuation industry. Furthermore, section 126K of the SISA outlines the criminal penalties for a disqualified person who knowingly continues to act in any of the restricted capacities. Such an offence carries a maximum penalty of two years imprisonment, underscoring the seriousness with which the Act treats non-compliance. In addition to the disqualification and criminal penalties, the Act provides mechanisms for the revocation of a disqualification. According to subsection 126A(5) of the SISA, the Commissioner may revoke a disqualification either on their own initiative or in response to a written application by the disqualified individual. This offers a pathway for individuals to seek relief if they can demonstrate a change in circumstances or compliance with the Act's requirements. Moreover, section 344 of the SISA allows an affected individual to request a reconsideration of the disqualification decision if they believe it is unjust. This reconsideration request must be made in writing within 21 days of receiving the notice and should detail the reasons for dissatisfaction with the original decision. The Act also ensures transparency and public accountability through its reporting mechanisms. Under subsection 126A(7) of the SISA, details of the disqualification notice are published as a Notifiable Instrument in the Federal Register of Legislation. This publication serves to inform the public and industry participants about the disqualification, thereby maintaining the integrity of the superannuation industry by deterring potential non-compliance.