Notice of Disqualification – Karyn Kajan – 27 November 2023

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted by the Parliament of Australia to address the need for effective supervision and regulation of the superannuation industry. This Act was introduced to safeguard the interests of superannuation fund members by ensuring that trustees, investment managers, and custodians comply with relevant laws and standards. The policy objective of the SISA is to maintain the integrity and stability of the superannuation system by imposing obligations on entities involved in superannuation activities and by providing mechanisms for enforcement and penalties for non-compliance. The Act includes provisions for disqualifying responsible officers of corporate trustees who have been involved in serious contraventions of the Act, as seen in the case of Karyn Kajan's disqualification notice dated 27 November 2023. The notice, issued by a delegate of the Commissioner of Taxation, highlights the serious nature of the contraventions and the consequences of such actions, which include potential criminal penalties and the possibility of disqualification from participating in superannuation activities.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to individuals and entities involved in the administration and oversight of superannuation entities, including trustees, investment managers, custodians, and responsible officers of corporate trustees. The Act operates on a Commonwealth level, regulating conduct and transactions within the superannuation industry across Australia. Notably, the Act disqualifies responsible officers who have been party to breaches of the Act by the corporate trustees they serve, as evidenced by the notice of disqualification served to Karyn Kajan. This notice, issued under the authority of the Commissioner of Taxation, signifies that Karyn Kajan has been disqualified due to serious contraventions of the Act while she was a responsible officer. The disqualification prohibits Karyn Kajan from acting as a trustee, investment manager, or custodian of a superannuation entity, or from being a responsible officer of a corporate trustee, and failure to comply with this prohibition is an offence punishable by up to two years in jail. The disqualification may be subject to revocation either on the initiative of the Commissioner or following a written application by the disqualified person, and aggrieved parties have the right to request reconsideration of the decision within 21 days of receiving notice. Details of such disqualifications are published as Notifiable Instruments in the Federal Register of Legislation.

Key Provisions

The primary sections of the Superannuation Industry (Supervision) Act 1993 (SISA) relevant to this notice involve the disqualification of responsible officers of corporate trustees of superannuation entities. Specifically, under subsection 126A(2), a person can be disqualified if the corporate trustee has contravened the SISA and the officer was a responsible officer at the time, with the seriousness of the contravention warranting such action. The disqualification notice given to Karyn Kajan under subsection 126A(6) of the SISA informs her that she has been disqualified as a responsible officer due to the corporate trustee's contraventions of the SISA. The disqualification takes immediate effect as per the notice dated 27 November 2023, signed by Emma Rosenzweig, a delegate of the Commissioner of Taxation. Under the Act, the disqualification imposes certain obligations and requirements on Karyn Kajan. Primarily, she is prohibited from acting as a trustee, investment manager, or custodian of a superannuation entity, or serving as a responsible officer of a body corporate that is a trustee, investment manager, or custodian, as outlined in section 126K of the SISA. This prohibition is intended to prevent her from participating in the management or administration of superannuation entities until the disqualification is addressed. Additionally, Karyn Kajan must refrain from any actions that could be construed as acting in the prohibited roles, thereby ensuring compliance with the terms of her disqualification. Failing to comply with the disqualification notice can result in significant legal consequences. Section 126K of the SISA establishes that it is an offence for a disqualified person to act in any of the prohibited capacities while knowing of their disqualification. The penalty for this offence includes a maximum of two years imprisonment, highlighting the seriousness with which the law treats breaches of the disqualification. Moreover, under subsection 126A(5) of the SISA, the disqualification may be revoked either on the initiative of the relevant authority or upon a written application by Karyn Kajan. This offers a potential pathway for her to have the disqualification lifted, provided she meets the necessary conditions or criteria. Lastly, section 344 of the SISA allows Karyn Kajan to request a reconsideration of the decision if she is dissatisfied with it, provided the request is made in writing within 21 days of receiving the notice and includes the reasons for her dissatisfaction.