Notice of Disqualification – James Herden – 25 August 2025

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address the need for stringent oversight and regulation of the superannuation industry in Australia, ensuring that superannuation funds are managed responsibly and in the best interest of members. This legislation was introduced by the Parliament of Australia to tackle issues such as mismanagement, fraud, and breaches of trust within the superannuation sector. The policy objective of the SISA is to protect superannuation members by ensuring that their funds are managed according to high standards of corporate governance, accountability, and transparency. The Act empowers the Commissioner of Taxation to disqualify individuals from acting in certain capacities within the superannuation industry if they have contravened the provisions of the Act, as demonstrated in the disqualification notice issued to James Herden. The Act also provides mechanisms for review and appeal of disqualification decisions, ensuring that affected individuals have a fair opportunity to contest the decision.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the administration and management of superannuation funds in Australia. The Act specifically targets those who act as trustees, investment managers, or custodians of superannuation entities. Its jurisdiction extends across the Commonwealth, making it a national regulation that applies uniformly regardless of state or territory boundaries. The Act imposes significant obligations and restrictions on disqualified persons, prohibiting them from engaging in certain roles within the superannuation industry, with severe penalties, including up to two years imprisonment, for non-compliance. The Act's disqualification provisions are enforceable through the issuance of a Notifiable Instrument, which is published in the Federal Register of Legislation. This legislative framework is designed to uphold the integrity and stability of the superannuation system, ensuring that those entrusted with managing these funds adhere to strict standards of conduct and accountability.

Key Provisions

The main operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) in this context are sections 126A and 126K. Section 126A(2) allows for the disqualification of individuals from participating in the superannuation industry if the Commissioner of Taxation is satisfied that they have contravened the Act on multiple occasions. This disqualification is immediate, as indicated in subsection 126A(6), and takes effect on the day it is made. Additionally, section 126K outlines the offences and penalties for a disqualified person who knowingly acts as a trustee, investment manager, custodian, responsible officer, or body corporate for a superannuation entity. The Act also provides for the possibility of revocation of the disqualification under subsection 126A(5), either on the initiative of the Commissioner or upon the written application of the disqualified individual. Furthermore, section 344 allows the Commissioner to reconsider the disqualification decision if the affected individual requests reconsideration in writing within 21 days of receiving notice, providing reasons for dissatisfaction with the decision. The obligations and requirements imposed by the SISA on James Herden, following his disqualification, are primarily centred around compliance with the Act’s prohibitions. As a disqualified person, James Herden is strictly prohibited from acting as a trustee, investment manager, custodian, responsible officer, or body corporate for any superannuation entity. This prohibition is crucial to ensure that individuals who have been found to have contravened the Act do not continue to manage or influence superannuation funds, which could potentially lead to further breaches or harm to beneficiaries. Additionally, the Act mandates that any details of the disqualification notice be published as a Notifiable Instrument in the Federal Register of Legislation, ensuring transparency and public awareness of the disqualification. In terms of the consequences for breach, the SISA imposes significant penalties for non-compliance with the disqualification. Under section 126K, it is an offence for a disqualified person to be or act as a trustee, investment manager, custodian, responsible officer, or body corporate of a superannuation entity, with the knowledge that they are disqualified. The maximum penalty for committing this offence is two years imprisonment, reflecting the seriousness with which the Act treats attempts to circumvent the disqualification. This stringent penalty serves as a deterrent to prevent disqualified individuals from continuing their involvement in the superannuation industry, thereby protecting the interests of superannuation fund members and the integrity of the industry. The Act also provides mechanisms for reconsideration and potential revocation of the disqualification. Under subsection 126A(5), the Commissioner has the authority to revoke the disqualification on their own initiative or upon receiving a written application from the disqualified person. This provision offers a pathway for James Herden to potentially have his disqualification overturned if he can demonstrate a change in circumstances or compliance with the Act’s requirements. Additionally, section 344 allows for the Commissioner to reconsider the disqualification decision if James Herden submits a written request within 21 days of receiving the notice, outlining the reasons for his dissatisfaction with the decision. This reconsideration process ensures that the disqualification decision is reviewed fairly and allows for the possibility of rectification if there are valid grounds for appeal.