Notice of Disqualification – Peter Kordas - 07 February 2025

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to ensure the proper regulation and supervision of the superannuation industry in Australia, addressing the need for oversight to protect the interests of superannuation fund members. The Act was introduced by the Australian Parliament with the policy objective of maintaining the integrity and financial stability of superannuation funds. One of the key provisions of the SISA is the ability to disqualify individuals from participating in the administration of superannuation entities if they are found to have contravened the Act. The Act empowers the Commissioner of Taxation, through a delegate, to disqualify individuals who have breached the Act, as demonstrated in the disqualification notice issued to Peter Kordas under subsection 126A(6) of the SISA. The disqualification becomes effective immediately upon issuance, reinforcing the Act's commitment to stringent oversight and enforcement within the superannuation sector.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the management of superannuation funds, such as trustees, investment managers, custodians, and responsible officers of bodies corporate that hold these roles. The Act operates nationally, covering all jurisdictions within Australia, and includes provisions that enable the disqualification of individuals who have breached the Act's regulations. The scope of the Act is further extended through subordinate instruments, which can specify additional details or create exceptions to the main provisions. The Act explicitly excludes from its application any entities or persons not directly involved in the administration or management of superannuation entities unless they are found to be in contravention of its provisions. The Act also provides mechanisms for the revocation of disqualifications and avenues for reconsideration of decisions, ensuring a balanced approach to enforcement and due process.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) includes specific provisions that empower the Commissioner of Taxation to disqualify individuals who have contravened the Act's requirements. Section 126A(1) allows for the disqualification of individuals found to have contravened the SISA, with the seriousness of the contravention being a key consideration (subsection 126A(6)). Once an individual is disqualified, the disqualification becomes effective immediately, as stated in the notice issued to Peter Kordas on 7 February 2025 by Emma Rosenzweig, a delegate of the Commissioner of Taxation. The disqualification of Peter Kordas was due to his contraventions of the SISA, which warranted such action. Under the SISA, there are obligations imposed on the parties and entities it governs. For example, section 126K makes it an offence for 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 in such a role. This requirement ensures that individuals who have been found to contravene the SISA do not continue to hold positions of responsibility within the superannuation industry. The penalties for breaching these provisions are severe, with a maximum penalty of two years in jail, as outlined in section 126K. The SISA also outlines the process for revoking a disqualification. According to subsection 126A(5), the Commissioner may revoke a disqualification either on their own initiative or in response to a written application from the disqualified individual. This provision provides a mechanism for individuals to potentially have their disqualification overturned if they can demonstrate that the grounds for the disqualification no longer apply. Furthermore, section 344 allows individuals who are dissatisfied with the decision to request a reconsideration from the Commissioner. This request must be made in writing within 21 days of receiving notice of the decision and should include the reasons why the decision is believed to be incorrect. The legislative framework established by the SISA ensures that the superannuation industry is supervised effectively, with clear provisions for the disqualification of individuals who contravene the Act's requirements. The obligations imposed on disqualified individuals, along with the potential civil and criminal consequences for breaches, serve to maintain the integrity and proper functioning of the superannuation industry. The provisions for reconsideration and revocation of disqualifications also provide a balanced approach, allowing for due process and the possibility of rectifying any errors or changes in circumstances.