Notice of Disqualification – Kristan Forner

Overview

The Superannuation Industry (Supervision) Act 1993 was enacted to address the need for regulation and oversight in the superannuation industry, aiming to protect the interests of superannuation fund members. This Act was introduced by the Commonwealth Parliament to ensure the integrity and stability of superannuation funds by providing a framework for their supervision and regulation. The policy objective of the Act is to safeguard the financial well-being of superannuation fund members through stringent regulatory measures and enforcement actions against non-compliance. In the case of Kristan Forner, a notice of disqualification was issued under the Act due to contraventions by the trustee of one or more superannuation entities, with the disqualification taking immediate effect upon issuance. This action underscores the Act’s commitment to maintaining high standards of conduct within the superannuation industry.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to trustees of superannuation entities and covers conduct that breaches the Act's provisions. In this instance, the Act applies to Kristan Forner, who has been disqualified from being a trustee due to contraventions of the Act. The disqualification is issued by a delegate of the Commissioner of Taxation, indicating the Commonwealth's jurisdictional reach over superannuation matters. The Act also extends its application through subordinate instruments, allowing for the revocation of disqualification and the reconsideration of decisions by the Commissioner. This legislation is designed to protect the integrity of the superannuation industry and ensure that trustees adhere to the standards set forth by the Act. Any disqualified person found acting in contravention of the Act faces potential criminal penalties, including a maximum of two years imprisonment, as outlined in section 126K of the Act.

Key Provisions

The main operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) relevant to this disqualification notice are subsection 126A(2) and subsection 126A(6). Under subsection 126A(2), the Commissioner of Taxation is empowered to disqualify an individual from performing certain roles within the superannuation industry if they are satisfied that the individual has contravened the SISA and that the nature of the contraventions provides grounds for disqualification. Subsection 126A(6) requires the Commissioner to give written notice to the disqualified person, detailing the reasons for the disqualification and the effect of the disqualification. In this case, the notice was issued to Kristan Forner by Emma Rosenzweig, a delegate of the Commissioner, on 16 September 2022, stating that Kristan has been disqualified due to his role as a trustee of one or more superannuation entities at the time of the contraventions. The SISA imposes several obligations on trustees and other relevant entities within the superannuation industry. Trustees are required to comply with all provisions of the SISA, including those related to the prudent management and investment of superannuation funds. They must also ensure that the superannuation entity operates in a manner that is in the best interests of the members and beneficiaries. Any contravention of the SISA by a trustee or other relevant entity may lead to disqualification under subsection 126A(2) if the Commissioner is satisfied that the contraventions provide grounds for disqualification. Under section 126K of the SISA, it is an offence for a disqualified person, who knows that they are a disqualified person, to act as a trustee, investment manager, or custodian of a superannuation entity, or to be a responsible officer or a body corporate that is a trustee, investment manager, or custodian of a superannuation entity. The maximum penalty for committing this offence is two years in jail. This provision is intended to prevent disqualified individuals from continuing to operate within the superannuation industry and potentially causing further harm to members and beneficiaries. Under subsection 126A(5) of the SISA, the Commissioner may revoke a disqualification on their own initiative or on the written application of the disqualified person. This allows for the possibility of reinstatement if the disqualified individual can demonstrate that they have taken appropriate steps to rectify any issues that led to the disqualification and are now capable of performing their role within the superannuation industry in a manner that complies with the SISA. Under section 344 of the SISA, if a person is affected by a decision and is not satisfied with it, they can ask the Commissioner to reconsider the decision. This request must be made in writing within 21 days of receiving notice of the decision and must give the reasons the person thinks the decision is wrong. This provides an avenue for appeal and ensures that the decision-making process is fair and transparent.