EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 389
Issued by authority of the Minister for Financial Services, Superannuation and Corporate Law
Superannuation Industry (Supervision) Act 1993
Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6)
Subsection 353(1) of the Superannuation Industry (Supervision) Act 1993 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Trustees of a self managed superannuation fund (SMSF) are required to appoint an approved auditor to conduct a financial and compliance audit of their fund each year. An ‘approved auditor’ is defined in the Act to mean a person included in a class of persons specified in the Superannuation Industry (Supervision) Regulations 1994 (the Principal Regulations). Schedule 1AAA to the Principal Regulations currently specifies an approved auditor includes an individual associated in the relevant manner with a professional organisation listed in that Schedule.
The purpose of the Regulations is to include SMSF Specialist Auditors of the SMSF Professionals’ Association of Australia Limited (SPAA) in Schedule 1AAA to the Principal Regulations. This allows SPAA’s SMSF Specialist Auditors to be approved auditors and able to undertake audits of SMSFs.
Details of the Regulations are set out in the Attachment.
The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purpose of the Legislative Instruments Act 2003.
The Australian Taxation Office was consulted during the preparation of these Regulations.
The Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
ATTACHMENT
Details of Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6)
Regulation 1 – Name of Regulations
This regulation provides that the title of the Regulations is the Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6).
Regulation 2 – Commencement
This regulation provides that the Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
Regulation 3 – Amendment of Superannuation Industry (Supervision) Regulations 1994 – Schedule 1
This regulation provides that the Superannuation Industry (Supervision) Regulations 1994 (the Principal Regulations) are amended as set out in Schedule 1.
Schedule 1 Amendment
Item 1 – Schedule 1AAA
This item inserts the SMSF Professionals’ Association of Australia Limited into Schedule 1AAA to the Principal Regulations.
The item also inserts SPAA’s SMSF Specialist Auditors in Schedule 1AAA as the manner of association.
The amendments include SPAA among the specified organisations in the Principle Regulations, and allow individuals who are SMSF Specialist Auditors of SPAA to be approved auditors of SMSFs.
Overview
The Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6) were enacted to address a gap in the existing regulatory framework for self managed superannuation funds (SMSFs). This amendment was introduced to incorporate SMSF Specialist Auditors from the SMSF Professionals’ Association of Australia Limited (SPAA) into the list of approved auditors for SMSFs, as stipulated in Schedule 1AAA of the Superannuation Industry (Supervision) Regulations 1994. The policy objective behind these regulations is to enhance the oversight and auditing of SMSFs by allowing SPAA’s SMSF Specialist Auditors to perform audits, thereby improving the compliance and financial reporting standards within the superannuation industry. These regulations were issued by authority of the Minister for Financial Services, Superannuation and Corporate Law, in accordance with the powers granted by subsection 353(1) of the Superannuation Industry (Supervision) Act 1993.
Scope and Application
The Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6) extend the application of the Superannuation Industry (Supervision) Act 1993 by amending the Superannuation Industry (Supervision) Regulations 1994. Specifically, these regulations introduce the SMSF Professionals’ Association of Australia Limited (SPAA) and its SMSF Specialist Auditors as approved auditors for self-managed superannuation funds (SMSFs). This amendment allows SPAA’s SMSF Specialist Auditors to conduct financial and compliance audits of SMSFs, aligning with the legislative requirement that trustees of SMSFs must appoint an approved auditor annually. The regulations do not specify any conditions for their enactment and will come into effect on the day after their registration on the Federal Register of Legislative Instruments. By incorporating SPAA’s auditors into the approved list, the regulations enhance the oversight and auditing capabilities within the superannuation industry, ensuring compliance with the provisions of the Act.
Key Provisions
The main operative sections of the Superannuation Industry (Supervision) Amendment Regulations 2009 (No. 6) are Regulation 3 and Schedule 1. Regulation 3 amends the Superannuation Industry (Supervision) Regulations 1994 (Principal Regulations) by updating Schedule 1AAA to include the SMSF Professionals’ Association of Australia Limited (SPAA). This amendment permits SMSF Specialist Auditors associated with SPAA to be recognised as approved auditors for self-managed superannuation funds (SMSFs). Schedule 1AAA now lists SPAA and specifies the manner of association for its SMSF Specialist Auditors, thereby enabling them to conduct financial and compliance audits of SMSFs as required by section 353(1) of the Superannuation Industry (Supervision) Act 1993.
The Act imposes obligations on trustees of SMSFs to appoint an approved auditor to conduct annual audits of their fund’s financial and compliance status. The approved auditor must be an individual associated with a professional organisation listed in Schedule 1AAA of the Principal Regulations. By amending Schedule 1AAA, the Regulations now recognise SMSF Specialist Auditors of SPAA as approved auditors, providing trustees with additional qualified professionals from whom they can choose their auditors. Trustees must ensure that the auditors they appoint meet the criteria specified in the Regulations, thereby maintaining the integrity and compliance of their SMSFs.
Breach of the requirements set out in the Regulations may result in civil or criminal penalties. Trustees who fail to appoint an approved auditor or who appoint an auditor not listed in Schedule 1AAA could be in non-compliance with the Act, potentially facing penalties under section 132 of the Superannuation Industry (Supervision) Act 1993. This could include financial penalties or, in serious cases, prosecution. Approved auditors who do not meet the criteria specified in the Regulations may also face penalties, as their designation as an approved auditor would be invalid, leading to potential sanctions under the Act. The exact penalties depend on the nature and severity of the breach, with the potential for significant fines and other consequences.