Notice of Disqualification – Trace Kennard - 3 April 2025

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to regulate and oversee the superannuation industry in Australia, addressing issues related to the management and administration of superannuation funds. This legislation was introduced to ensure the integrity and accountability of superannuation trustees and their officers, particularly in light of instances where trustees had contravened the Act, thereby necessitating measures to protect the interests of superannuation fund members. The SISA was enacted by the Parliament of Australia, reflecting a policy objective to safeguard the retirement savings of Australians by imposing stringent regulatory standards and enforcement mechanisms on superannuation entities and their responsible officers. The Act empowers the Commissioner of Taxation to disqualify individuals who have acted in a manner that breaches the Act while serving as a responsible officer of a corporate trustee, thereby mitigating risks associated with poor governance and management practices within the superannuation sector.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the management and oversight of superannuation funds, particularly those acting as trustees, investment managers, custodians, or responsible officers. The geographic reach of the Act extends nationally across Australia, ensuring compliance with superannuation laws throughout the Commonwealth. The Act’s provisions include disqualifying individuals from acting in certain capacities if they are found to have contravened the Act’s requirements, particularly when such contraventions are deemed serious enough to warrant disqualification. The Act also specifies penalties for those who continue to act in prohibited roles post-disqualification, including potential imprisonment for up to two years. Furthermore, the Act allows for the revocation of disqualifications under certain conditions, providing a mechanism for redress. Exclusions or exemptions from the Act are not explicitly detailed in this notice, but the Act’s broad application suggests that it encompasses a wide range of entities and individuals within the superannuation industry unless otherwise specified in subordinate instruments or regulations.

Key Provisions

The Superannuation Industry (Supervision) Act 1993 (SISA) provides key provisions concerning the disqualification of individuals associated with the management of superannuation entities. Under subsection 126A(2) of the SISA, a person can be disqualified from being a responsible officer if it is determined that the corporate trustee has contravened the Act and the seriousness of the contravention warrants such a disqualification. This disqualification is effective immediately upon notice being given (subsection 126A(6)). In this particular case, Trace Kennard has been disqualified by Emma Rosenzweig, a delegate of the Commissioner of Taxation, due to his role as a responsible officer during the contraventions by the corporate trustee. The Act imposes certain obligations on the disqualified individual and the entities they manage. The most significant obligation is that a disqualified person is prohibited from acting or being appointed as a trustee, investment manager, or custodian of a superannuation entity, or being a responsible officer of such a body corporate (section 126K). This prohibition is intended to ensure that individuals who have been found to be associated with serious contraventions of the SISA do not continue to manage superannuation funds. Breaching the provisions of the Act that result in disqualification can lead to severe consequences. According to section 126K, it is an offence for a disqualified person to act in any capacity as a trustee, investment manager, custodian, or responsible officer of a superannuation entity. The maximum penalty for this offence is two years imprisonment. This stringent penalty underscores the seriousness with which the Act regards the management and oversight of superannuation funds. There are also provisions for the potential revocation of the disqualification. Subsection 126A(5) of the SISA allows for the disqualification to be revoked either on the initiative of the Commissioner or upon a written application by the disqualified individual. Additionally, section 344 of the SISA provides for a reconsideration process if the disqualified individual believes the decision is incorrect. This reconsideration request must be made in writing within 21 days of receiving the notice of disqualification and must include the reasons for the dissatisfaction with the decision. This ensures that there is a formal process for reviewing the disqualification and potentially reversing it if warranted.