Notice of Disqualification - Drasko Malovic

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted by the Parliament of Australia to establish a regulatory framework aimed at ensuring the proper management and supervision of superannuation funds. This legislation was introduced to address the need for maintaining the integrity and financial stability of the superannuation industry by ensuring that entities involved in managing these funds are operated by individuals who are deemed fit and proper for the role. The Act provides mechanisms for the disqualification of individuals who do not meet the required standards, thus protecting the interests of superannuation fund members. The policy objective of the SISA is to safeguard the financial wellbeing of superannuation fund members by ensuring that their funds are managed by trustworthy and competent individuals. This is achieved through stringent regulatory oversight and the imposition of disqualifications on those who fail to meet the required standards.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the supervision and management of superannuation funds in Australia. Specifically, the Act applies to trustees, investment managers, custodians, and responsible officers of body corporates that function as trustees, investment managers, or custodians of superannuation entities. This legislation is of Commonwealth jurisdiction, thereby extending its reach across the entire nation. The Act explicitly excludes any conduct or transactions not directly related to the administration and supervision of superannuation funds. However, the scope of the Act may be further extended or restricted through subordinate instruments issued under its authority. The Act imposes significant penalties, including up to two years of imprisonment, for any disqualified individual who knowingly acts in a capacity that the Act restricts. The Act also provides mechanisms for the revocation of disqualification and the reconsideration of decisions by the Commissioner, ensuring that affected parties have avenues for redress and compliance.

Key Provisions

The notice of disqualification provided under the Superannuation Industry (Supervision) Act 1993 (SISA) addresses Drasko Malovic, indicating that he has been disqualified from being a trustee, investment manager, custodian, or a responsible officer of a body corporate involved with superannuation entities. This disqualification is issued by James O’Halloran, a delegate of the Commissioner of Taxation, under subsection 126A(3) of the SISA, as he is satisfied that Malovic is not a fit and proper person for these roles (subsection 126A(6)). The disqualification takes effect immediately upon issuance, which is on 13 April 2017. The SISA imposes several obligations and requirements on Malovic and potentially other entities it governs. Notably, Malovic is prohibited from acting or being involved in any capacity that requires him to manage or oversee superannuation entities. This includes being a trustee, investment manager, or custodian, or serving as a responsible officer of a body corporate that undertakes these functions (section 126K). Compliance with this disqualification is mandatory, and failure to adhere to it may result in severe legal consequences. Additionally, under subsection 126A(5) of the SISA, the disqualification can be revoked either by the authority's initiative or upon Malovic's written application. Breaching the disqualification by knowingly acting in any of the prohibited capacities is a serious offence under section 126K of the SISA. The maximum penalty for committing this offence is two years imprisonment. This stringent penalty underscores the importance of compliance with the disqualification order. Furthermore, section 344 of the SISA allows Malovic to request a reconsideration of the decision if he is dissatisfied with it. Such a request must be made in writing within 21 days of receiving the notice and should detail the reasons for believing the decision is incorrect. This process provides Malovic with an avenue to contest the disqualification and potentially seek its revocation.