Notice of Disqualification - Michael Borostyan - 6 May 2024

Overview

The Superannuation Industry (Supervision) Act 1993 was enacted to regulate the superannuation industry in Australia, ensuring that superannuation entities are managed responsibly and efficiently to protect the interests of members. The Act addresses the problem of inadequate oversight and potential misconduct in the management of superannuation funds. It was introduced by the Parliament of Australia with the policy objective of safeguarding the retirement savings of Australians by imposing stringent regulatory requirements on trustees, investment managers, and custodians of superannuation funds. The legislation aims to prevent financial mismanagement and fraudulent activities, thereby maintaining the integrity of the superannuation system. As a part of this legislative framework, the Act includes provisions for disqualifying individuals who have contravened its requirements, as evidenced in the notice of disqualification issued to Michael Borostyan under subsection 126A(6) of the Act.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to trustees, investment managers, custodians, and responsible officers of superannuation entities. This includes individuals and corporate bodies that are responsible for managing or overseeing superannuation funds. The Act extends to all superannuation entities within Australia, thereby covering the entire Commonwealth. The legislation provides a framework for the regulation and supervision of superannuation entities to ensure compliance with standards designed to protect the interests of superannuation fund members. Exclusions or exemptions are limited and generally pertain to specific types of entities or transactions as outlined within the Act or under subordinate instruments. The Act's provisions may be extended or modified through regulations or other legislative instruments, which are subject to parliamentary scrutiny and oversight. This ensures the Act remains adaptable to changing circumstances within the superannuation industry. In the case of Michael Borostyan, the notice of disqualification under the Superannuation Industry (Supervision) Act 1993 signifies a serious contravention of the Act's provisions. The disqualification prohibits Mr. Borostyan from acting as a trustee, investment manager, custodian, or responsible officer of a superannuation entity, with potential criminal penalties for non-compliance. The notice is effective immediately upon issuance and details of the disqualification will be published in the Federal Register of Legislation. Mr. Borostyan has the right to request a reconsideration of the decision within 21 days and the possibility of disqualification revocation under certain conditions. This legislative framework is designed to maintain integrity and trust within the superannuation industry by holding accountable those who fail to comply with the regulatory standards.

Key Provisions

The primary operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) in this context include subsections 126A(1) and 126A(6). Subsection 126A(1) provides the authority for disqualifying a person from certain roles within the superannuation industry if they have contravened the Act. Subsection 126A(6) requires that a formal notice of this disqualification be provided to the affected individual, as seen in the notice issued to Michael Borostyan. The notice, dated 6 May 2024, specifies that Michael has been disqualified by Emma Rosenzweig, a delegate of the Commissioner of Taxation, due to breaches of the SISA that are deemed serious enough to warrant disqualification. The obligations imposed by the Act on the parties it governs include ensuring compliance with the legislative requirements, particularly concerning the management of superannuation entities. For Michael Borostyan, this means he is prohibited from acting as a trustee, investment manager, or custodian of a superannuation entity, as well as from being a responsible officer or a body corporate in such roles. These restrictions are intended to maintain the integrity and proper functioning of the superannuation industry. Breaches of the disqualification provisions can result in significant consequences. Under section 126K of the SISA, it is an offence for a disqualified person who is aware of their disqualification to act in any capacity that the disqualification prohibits. This offence carries a maximum penalty of two years imprisonment, highlighting the seriousness with which the Act treats non-compliance. Additionally, the notice of disqualification will be published as a Notifiable Instrument in the Federal Register of Legislation, ensuring transparency and public accountability. For Michael Borostyan, there are provisions for reconsideration and potential revocation of the disqualification. Under subsection 126A(5) of the SISA, the disqualification can be revoked either on the initiative of the Commissioner of Taxation or upon a written application by Michael. Furthermore, if Michael is dissatisfied with the decision, he can request the Commissioner to reconsider it within 21 days of receiving the notice. This request must be in writing and must outline the reasons why he believes the decision is incorrect, providing an avenue for legal recourse and potential rectification of the disqualification.