Notice of disqualification - Mr Mark D Schrader

Overview

The Superannuation Industry (Supervision) Act 1993 was enacted to establish a regulatory framework for the supervision of superannuation funds, addressing concerns about the management and administration of these funds to ensure they are handled responsibly and in the best interests of members. The Act was introduced by the Commonwealth Parliament with a clear policy objective of maintaining the integrity of the superannuation system by ensuring that trustees and responsible officers of superannuation entities are fit and proper persons. The legislation provides mechanisms for disqualifying individuals who are deemed unsuitable for roles within the superannuation industry due to serious contraventions of the Act or unfitness for the role. The Act allows for the disqualification of individuals who have breached the legislation, thereby protecting the interests of superannuation fund members.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the management and administration of superannuation entities, including trustees, investment managers, custodians, and responsible officers of such entities. The Act's jurisdiction extends nationally, as it is a Commonwealth Act, thereby affecting superannuation practices across Australia. The Act targets serious contraventions of its provisions, particularly those that lead to the determination that an individual is not a fit and proper person to manage superannuation funds. The disqualification of Mr. Mark D Schrader, as noted in the Gazette, is a direct application of the Act, where an individual has been found to contravene the Act's provisions and deemed unfit to continue in their supervisory role within the superannuation industry. The disqualification is comprehensive, barring the individual from acting in any capacity that involves the management of superannuation entities, as per the provisions outlined in section 126K of the SISA. The Act's reach is further extended through subordinate instruments, which can specify additional conditions or requirements under which the Act operates, although the primary legislative text establishes the foundational framework and penalties for non-compliance.

Key Provisions

The main operative sections of the Superannuation Industry (Supervision) Act 1993 (SISA) involved in this notice of disqualification are subsections 126A(1), 126A(3), 126A(5), 126A(6), and 126A(7). Under these provisions, Mr Mark D Schrader has been disqualified from acting as a trustee or responsible officer of a superannuation entity due to breaches of the SISA and being deemed not a fit and proper person to hold such roles. The disqualification takes effect immediately upon issuance of the notice, which was dated 1 June 2022. The Act imposes several obligations and requirements on the parties it governs. Trustees and responsible officers must comply with all provisions of the SISA, including but not limited to, maintaining proper records, acting in the best interests of superannuation fund members, and ensuring the prudent management of funds. Additionally, they must demonstrate that they are fit and proper persons to hold their positions, which includes having the requisite integrity and competence. Mr Schrader’s disqualification indicates that he has failed to meet these standards. Under section 126K of the SISA, any disqualified person who knowingly acts as a trustee, investment manager, custodian, or responsible officer of a superannuation entity commits an offence. This offence is subject to a maximum penalty of two years imprisonment. The notice explicitly warns Mr Schrader that continuing to act in these capacities despite his disqualification would result in criminal liability. The seriousness of such breaches underscores the importance of compliance with the Act’s requirements. Finally, subsection 126A(5) of the SISA allows for the possibility of revoking the disqualification either on the initiative of the Commissioner of Taxation or upon a written application by Mr Schrader himself. Furthermore, section 344 of the Act provides a recourse for those dissatisfied with the disqualification decision. Any affected party can request the Commissioner to reconsider the decision within 21 days of receiving the notice, provided they submit a written request outlining the reasons for dissatisfaction. This provision ensures that there is a mechanism for challenging the disqualification if it is perceived to be unjust.