Notice of Disqualification – Michael Kevin Cheney - 25 June 2024

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address issues and gaps in the regulation and oversight of superannuation entities in Australia. The SISA was introduced by the Commonwealth Parliament to provide a framework for the supervision and regulation of the superannuation industry, ensuring the protection of superannuation funds and the interests of members. The Act was designed to enhance the accountability and integrity of superannuation trustees and other responsible officers by setting standards for their conduct and imposing penalties for breaches. The policy objective of the SISA is to maintain the confidence of the public in the superannuation industry by ensuring that superannuation entities are managed with the highest standards of probity, competence, and accountability. Under the SISA, the Commissioner of Taxation is empowered to disqualify individuals from acting as trustees, investment managers, custodians, or responsible officers of superannuation entities if they have contravened the Act, particularly where the contraventions are serious enough to warrant such action.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 applies to responsible officers of corporate trustees of superannuation entities and encompasses individuals or bodies corporate entrusted with the management and oversight of superannuation funds. This Act has a national reach, regulating the superannuation industry across Australia, including both public and private sector entities. The Act includes provisions for disqualifying individuals from acting in certain capacities if they have been associated with entities that have contravened the legislation, as demonstrated in the notice issued to Michael Kevin Cheney. The Act does not specify particular industries but rather targets conduct and transactions within the superannuation sector. Exclusions or exemptions from the Act are not explicitly mentioned in the provided text, but the Act's extensive coverage suggests that it applies broadly to the industry. The Act may also extend or restrict its application through subordinate instruments, although such details are not provided in the notice.

Key Provisions

The primary operative sections of the notice are subsection 126A(6) and subsection 126A(2) of the Superannuation Industry (Supervision) Act 1993 (SISA). Under subsection 126A(6), Emma Rosenzweig, a delegate of the Commissioner of Taxation, provides formal notice to Michael Kevin Cheney that he has been disqualified from participating in the management of superannuation entities. This disqualification arises from subsection 126A(2), which allows for disqualification if there is a conviction that a corporate trustee of one or more superannuation entities has contravened the SISA, and at the time of the contraventions, the person was a responsible officer of the corporate trustee, with the seriousness of the contraventions justifying the disqualification. The Act imposes several obligations and requirements on the parties it governs. Primarily, it mandates that responsible officers of corporate trustees must ensure compliance with the SISA. If there is a breach, the responsible officer may face disqualification. Furthermore, the Act requires that any disqualified person must refrain from acting as a trustee, investment manager, or custodian of a superannuation entity, or as a responsible officer or a body corporate that is a trustee, investment manager, or custodian. There are significant consequences for breaches of the Act. Section 126K makes it an offence for a disqualified person to act in any capacity related to the management of a superannuation entity. The maximum penalty for this offence is two years in jail. Additionally, under subsection 126A(5), the disqualification may be revoked either by the authority on its own initiative or upon a written application from the disqualified person. Moreover, section 344 allows an affected person to request a reconsideration of the disqualification decision by the Commissioner within 21 days of receiving notice of the decision, provided that the request is made in writing and includes reasons for the perceived error in the decision.