Explanatory Statement to Superannuation Industry (Supervision)
Modification Declaration No.4 of 2007
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Section 332 of the Superannuation Industry (Supervision) Act 1993
Section 332 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) provides that APRA may, in writing, declare that a modifiable provision of the SIS Act is to have effect, in relation to a particular person or class of persons, as if it were modified as specified in the declaration.
Superannuation Industry (Supervision) Modification Declaration No.4 of 2007 (MD 4 of 2007) modifies sections 29DC and 29MB of the SIS Act.
The instrument will come into force on the date of registration on the Federal Register of Legislative Instruments.
Background
- Subsection 29DC(1) provides that a licensee must ensure that their RSE licence number is disclosed in documents where the licensee is identifying itself as a trustee of a registered superannuation entity (RSE). Subsection 29MB(1) provides that a licensee must ensure that the RSE registration number is disclosed in documents relating to the RSE.
2. On 24 September 2007 the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007 (FSSR Act) was passed. Under Part 3, Amendments commencing 12 months after Royal Assent of the FSSR Act, Items 246, 248 and 254 replace the requirement to disclose an RSE licence and RSE registration number with the requirement to disclose the ABN of the RSE licensee and RSE, effective 24 September 2008.
3. Since the introduction of the RSE licensing requirements under Part 2A of the SIS Act, APRA has provided individual relief, by way of exemption under section 328, to a number of RSE licensees so that they are not required to disclose their RSE licence and registration numbers. In many cases this relief will lapse on 31 December 2007.
4. To facilitate the transition period from the end of the current exemptions until 24 September 2008, as well as allow any RSE licensee to implement the new ABN disclosure regime earlier than 24 September 2008 should they desire to do so, APRA wishes to offer RSE licensees the option to use the ABN of the RSE licensee and RSE as an alternative during the transition period.
Purpose of the instrument
5. APRA has agreed to provide relief to all RSE licensees from the requirement to include their RSE licence and/or RSE registration number on relevant disclosure documents where the ABN of the RSE licensee and of the RSE is already disclosed. This relief will lapse on 24 September 2008 when the provisions of the FSSR Act come into effect.
Operation of the instrument
6. Granting relief in these circumstances will enable RSE licensees to use:
(a) existing disclosure documents that contain the RSE licensee’s and/or the RSE’s ABN (as required); and/or
(b) the RSE licensee’s and RSE’s ABN in any new disclosure documents (as required) prior to 24 September 2008;
in order to meet their obligations under section 29DC and 29MB of the SIS Act.
7. MD 4 of 2007 will allow RSE licensees to utilise the provisions relating to sections 29DC and 29MB of the FSSR Act and does not impose additional obligations or costs on RSE licensees. It should alleviate the need for RSE licensees to make individual requests for relief to APRA under sections 29DC(2) and 29MB(2) of the SIS Act by allowing RSE licensee to implement the FSSR Act provisions during the transitional period.
Consultation
8. APRA consulted the main industry bodies on the draft instrument. No issues with the drafting or the overall approach adopted by APRA were identified in the consultation process.
Commencement
9. MD 4 of 2007 comes into force from the date of registration on the Federal Register of legislative Instruments.
Overview
The Superannuation Industry (Supervision) Modification Declaration No.4 of 2007 was introduced to facilitate the transition for Registered Superannuation Entities (RSE) licensees from disclosing their RSE licence and RSE registration numbers to disclosing their Australian Business Number (ABN) in compliance with the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007. Enacted by the Australian Prudential Regulation Authority (APRA) under Section 332 of the Superannuation Industry (Supervision) Act 1993, the declaration was designed to provide relief to RSE licensees from the existing requirement to include their RSE licence and/or RSE registration number on relevant disclosure documents. The policy objective was to ease the transition period by allowing RSE licensees to use their ABNs as an alternative disclosure method until the new requirements under the FSSR Act came into effect on 24 September 2008. This declaration was intended to alleviate the need for individual requests for relief from APRA and streamline the process for RSE licensees during the transitional period.
Scope and Application
The Superannuation Industry (Supervision) Modification Declaration No. 4 of 2007, prepared by the Australian Prudential Regulation Authority (APRA), modifies sections 29DC and 29MB of the Superannuation Industry (Supervision) Act 1993 (SIS Act) to facilitate a transition in disclosure requirements for Registered Superannuation Entities (RSE) in response to legislative changes introduced by the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007. This declaration applies to all RSE licensees and seeks to provide a transitional period until the new requirements come into effect on 24 September 2008, whereby the disclosure of the Australian Business Number (ABN) of the RSE licensee and the RSE replaces the existing requirement to disclose the RSE licence and registration numbers. The declaration allows RSE licensees to use their ABN in disclosure documents until the new provisions take effect, thus easing the administrative burden and avoiding the need for individual exemptions from APRA. The declaration does not impose any additional obligations or costs on RSE licensees and comes into force on the date of registration on the Federal Register of Legislative Instruments.
Key Provisions
The key provisions of Superannuation Industry (Supervision) Modification Declaration No.4 of 2007 (MD 4 of 2007) are primarily focused on modifying sections 29DC and 29MB of the Superannuation Industry (Supervision) Act 1993 (SIS Act) to facilitate the transition to a new disclosure regime. Section 29DC(1) of the SIS Act, which originally required a licensee to disclose their RSE licence number in relevant documents, is modified to allow the disclosure of the RSE licensee’s Australian Business Number (ABN) instead. Similarly, section 29MB(1), which required the disclosure of an RSE registration number, is modified to permit the disclosure of the ABN of the RSE. These modifications are intended to align with the new requirements introduced by the Financial Sector Legislation Amendment (Simplifying Regulation and Review) Act 2007 (FSSR Act), which will take effect on 24 September 2008.
The obligations imposed by MD 4 of 2007 on the parties it governs, primarily RSE licensees, are to ensure that their ABN and, if applicable, the ABN of the RSE, are disclosed in relevant documents in place of the RSE licence number and RSE registration number. This modification allows RSE licensees to use existing disclosure documents containing the ABN or to include the ABN in new disclosure documents prior to the effective date of the FSSR Act provisions. Importantly, this relief is temporary and will lapse on 24 September 2008, aligning with the commencement of the new ABN disclosure regime.
In terms of compliance, MD 4 of 2007 does not introduce any additional obligations or costs for RSE licensees. Instead, it aims to simplify the transition by allowing RSE licensees to utilise the new disclosure requirements before they become mandatory. However, it is essential that RSE licensees ensure they comply with the modified disclosure requirements during the transitional period. Failure to disclose the required ABNs in place of the RSE licence and registration numbers may result in non-compliance with the SIS Act. Although MD 4 of 2007 itself does not stipulate specific penalties, non-compliance with the SIS Act can lead to enforcement actions by the Australian Prudential Regulation Authority (APRA), which may include fines, remedial actions, or other regulatory measures. The potential penalties for non-compliance with the SIS Act are outlined in the Act itself and can include substantial financial penalties.