Occupational Superannuation Standards Regulations (Amendment) 1993 No. 33
EXPLANATORY STATEMENT
Statutory Rules 1993 No. 33
Issued by Authority of the Treasurer
Occupational Superannuation Standards Act 1987
Occupational Superannuation Standards Regulations (Amendment)
The Occupational Superannuation Standards Act 1987 (the Act) gives authority to the Government to set standards that superannuation funds must meet in order to be eligible for concessional taxation treatment.
Section 22 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Subsection 7(1) of the Act provides that the regulations may prescribe standards applicable to the operation of superannuation funds.
One of the measures outlined in the Treasurer's statement of 21 October 1992 entitled "Strengthening Super Security: New Prudential Arrangements for Superannuation" was that public offer superannuation funds, ADFs and PSTs that are currently subject to the prospectus and prescribed interest provisions of the Corporations Law (administered by the Australian Securities Commission) would be exempted from such requirements and made subject to comparable requirements under the proposed superannuation prudential supervision legislation which will be administered by the Insurance and Superannuation Commissioner.
In December 1992 the Australian Securities Commission issued a class order exempting superannuation funds from the prospectus and prescribed interest provisions under the Corporations Law. This has caused a temporary regulatory gap pending commencement of the proposed new superannuation prudential supervision legislation.
The Regulations fill this gap by amending regulations under the Occupational Superannuation Standards Act 1987 to provide as a standard that superannuation funds must continue to issue prospectuses in accordance with certain requirements of the Corporations Law.
Regulation 1 specifies that the Occupational Superannuation Standards Regulations are amended as set out in these regulations.
Regulation 2 inserts a new Regulation 5AAA which prohibits the invitation to become members of, or to contribute to, a superannuation fund unless a prospectus in relation to the fund that complies with certain requirements of Division 2 of Part 7.12 of the Corporations Law has been lodged with the Insurance and Superannuation Commissioner.
These Regulations commenced on gazettal.
Overview
The Occupational Superannuation Standards Regulations (Amendment) 1993 No. 33 were enacted to address a temporary regulatory gap that emerged following a class order issued by the Australian Securities Commission in December 1992. This order exempted superannuation funds from certain prospectus and prescribed interest requirements under the Corporations Law, pending the commencement of new superannuation prudential supervision legislation to be administered by the Insurance and Superannuation Commissioner. The Regulations aim to fill this gap by amending the Occupational Superannuation Standards Regulations 1987, ensuring that superannuation funds remain compliant with the necessary regulatory standards during this transitional period. The policy objective, as outlined in the Treasurer's statement of 21 October 1992, is to strengthen superannuation security by aligning the regulatory requirements of superannuation funds with the forthcoming prudential supervision framework.
Scope and Application
The Occupational Superannuation Standards Regulations (Amendment) 1993 No. 33 applies to superannuation funds and their operations within the framework set by the Occupational Superannuation Standards Act 1987. The Act authorises the government to establish standards that superannuation funds must meet to be eligible for concessional tax treatment. The regulations specifically target public offer superannuation funds, Australian Defence Force (ADF) superannuation funds, and Public Sector Superannuation Scheme (PSS) funds, which were previously governed by the Corporations Law. With the introduction of these amendments, these superannuation funds are exempted from the prospectus and prescribed interest provisions of the Corporations Law and are now subject to regulations under the Occupational Superannuation Standards Act 1987. The regulations stipulate that superannuation funds must continue to issue prospectuses that comply with certain requirements of the Corporations Law, ensuring a consistent regulatory environment and filling a temporary gap created by the Australian Securities Commission's class order in December 1992. These regulations commenced upon gazettal, providing immediate effect to the amendments.
Key Provisions
The Occupational Superannuation Standards Regulations (Amendment) 1993 No. 33 (the Regulations) amend the Occupational Superannuation Standards Regulations 1991 (the original Regulations) to provide for new standards applicable to superannuation funds under the Occupational Superannuation Standards Act 1987 (the Act). Regulation 2 introduces a new Regulation 5AAA which stipulates that a superannuation fund must not invite individuals to become members or contribute to the fund unless a prospectus complying with specified requirements of Division 2 of Part 7.12 of the Corporations Law has been lodged with the Insurance and Superannuation Commissioner.
These amendments impose obligations on superannuation funds to ensure that they adhere to the prospectus requirements outlined in the Corporations Law. Regulation 5AAA specifically mandates that a prospectus must be lodged with the Insurance and Superannuation Commissioner before any invitations to join or contribute to the fund can be made. This requirement ensures that prospective members have access to comprehensive and transparent information about the fund, facilitating informed decision-making.
Failure to comply with the new Regulation 5AAA may result in civil or criminal consequences. Under section 131G of the Corporations Law, a person who contravenes a civil penalty provision may be liable to a pecuniary penalty not exceeding the greater of three times the value of any benefit obtained, $162,000, or in the case of a continuing failure to comply, $2,700 for each day during which the contravention continues. Additionally, under section 131H, a court may make an order restraining a person from engaging in conduct that is, or is likely to be, engaged in a contravention of the relevant provision.
The Regulations also stipulate that they commenced on gazettal, which means they came into effect immediately upon being published in the Commonwealth Gazette. This immediate commencement ensures that the regulatory gap left by the exemption of superannuation funds from the prospectus and prescribed interest provisions under the Corporations Law is filled without delay.