Notice of Disqualification - Paul Strembickyj - 11 March 2025

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to establish a regulatory framework for the supervision of the superannuation industry, aiming to protect superannuation fund members by ensuring the responsible management and administration of their funds. The SISA was introduced to address gaps in the regulation of superannuation entities, providing a comprehensive legal basis for the oversight of trustees, investment managers, and custodians to safeguard the interests of superannuation fund members. The Act is administered by the Australian Parliament, with a policy objective to maintain the integrity of the superannuation system and provide confidence to the public regarding the administration of their superannuation funds. In the case of Paul Strembickyj, the Act was invoked to disqualify him due to the contravention of the SISA by a corporate trustee he was associated with, highlighting the Act's role in enforcing accountability and responsibility within the superannuation industry.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the administration of superannuation funds in Australia. Specifically, it targets responsible officers of corporate trustees who manage these funds. The Act extends to the entire Commonwealth of Australia, ensuring a consistent regulatory approach across all states and territories. It does not distinguish between types of superannuation entities or specific industries, but rather focuses on the conduct and management practices within the superannuation sector. Notably, the Act allows for the disqualification of individuals found to have contravened its provisions if the contraventions are serious enough to warrant such action. This disqualification prohibits the disqualified person from acting as a trustee, investment manager, or custodian of a superannuation entity, as well as from being a responsible officer of a body corporate involved in these roles. The legislation also provides mechanisms for the disqualification to be revoked, either by the delegate or upon the application of the disqualified person, and allows for reconsideration of the decision by the Commissioner if the affected party is dissatisfied within 21 days of receiving the notice. The consequences of being a disqualified person include potential criminal penalties, such as up to two years in jail, for continuing to act in prohibited capacities.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) includes provisions for disqualifying individuals from participating in the management of superannuation entities. Section 126A(2) allows the delegate of the Commissioner of Taxation to disqualify a person from being involved in the administration of a superannuation entity if they are satisfied that the corporate trustee has contravened the Act and the individual was a responsible officer at the time of the contraventions. The disqualification takes immediate effect upon issuance of the notice, as specified in subsection 126A(6). In the case of Paul Strembickyj, he has been disqualified due to his role as a responsible officer during instances of non-compliance by the corporate trustee. Those affected by the disqualification are subject to stringent obligations under the SISA. For example, section 126K stipulates that a disqualified person who is aware of their disqualification cannot serve as a trustee, investment manager, or custodian of a superannuation entity, nor can they be part of a body corporate that holds such roles. This prohibition extends to acting in any capacity that would involve managing or overseeing the superannuation entity's affairs. The intent behind these provisions is to ensure that individuals who have previously failed to comply with superannuation laws do not continue to manage funds that are critical to the financial security of many Australians. Failure to adhere to these obligations can result in serious consequences. Section 126K imposes a criminal offence on any disqualified person who knowingly acts in a restricted capacity. The penalty for such an offence can be up to two years imprisonment, as outlined in the Act. Additionally, subsection 126A(5) of the SISA provides the authority to revoke a disqualification either on their own initiative or upon written application by the disqualified person. This offers a potential pathway for individuals to seek reinstatement if they can demonstrate that the grounds for their disqualification no longer apply. For those dissatisfied with the decision to disqualify them, the Act offers a mechanism for reconsideration. Under section 344, an individual can request the Commissioner to reconsider the decision in writing within 21 days of receiving the notice of disqualification. This request must detail the reasons why the individual believes the decision is incorrect. This provision ensures that individuals have an opportunity to contest the decision and seek a remedy if they believe it was made in error or without proper consideration of the circumstances.