Business Planning « Australian Regulatory Compliance Review from Langes+ Lawyers

April 18, 2005

Business Continuity Standard finalised by APRA

The Australian Prudential Regulation Authority (APRA) has issued prudential standards on business continuity management (BCM) for authorised deposit-taking institutions (ADIs) and general insurers.

The new prudential standards aim to ensure that ADIs and general insurers implement a “whole of business” approach to BCM appropriate to the nature and scale of their individual operations.

Key requirements of the prudential standards include:

the
Board of Directors and senior management of an ADI or general insurer must consider business continuity risks and controls as part of the company’s overall risk management framework provided to APRA on an annual basis;
an ADI or general insurer must identify critical business functions, resources and infrastructure which, if disrupted, would have a material impact on the company’s business operations, reputation or profitability;
an ADI or general insurer must assess the impact of plausible disruption scenarios on critical business functions, resources and infrastructure and have in place appropriate recovery strategies to ensure all necessary resources are readily available to withstand the impact of the disruption; and
an ADI or general insurer must develop, implement and maintain through review and testing procedures, a Business Continuity Plan that documents procedures and information which enable the company to respond to disruptions and recover critical business functions.

The two new standards come into effect immediately, but ADIs and general insurers have a 12-month transitional period in which to identify areas of non-compliance with the new standards and provide to APRA a rectification plan and timetable.

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Posted 18th April 2005 by David Jacobson in Business Planning, Corporate Governance, Financial Services

Super fund choice and employers

The ATO has published an on-line choice of superannuation fund guide for employers.

It covers:

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Posted 18th April 2005 by David Jacobson in Business Planning, Financial Services

March 23, 2005

Phone and Internet Consumer Contracts Code

The Australian Communications Industry Forum has published a Consumer Contracts Code relating to phone and Internet contracts.

The new code of practice is intended to provide assurance that contracts offered by telecommunications service providers will be simpler, fairer and more transparent.

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Posted 23rd March 2005 by David Jacobson in Business Planning

Queensland BAD Tax to end

As announced last year Queensland debits tax will end on 1 July 2005.
Debits tax will continue to apply until 30 June 2005. Any debit tax liabilities accruing up to and including 30 June 2005 will remain payable.

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Posted 23rd March 2005 by David Jacobson in Business Planning, Financial Services

March 18, 2005

New Communications Regulator

The Australian Communications Authority and the Australian Braodcasting Authority will merge on 1 July to form the Australian Communications and Media Authority.

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Posted 18th March 2005 by David Jacobson in Business Planning, Intellectual Property

February 18, 2005

Super fund choice

Employers affected by the choice of fund provisions will be
required to give a standard choice form to their existing employees before 29 July 2005, and within 28 days of commencing employment for new employees.

Employers will have two months to action employees’ choices and start paying contributions
into the choice fund, according to minutes of the ATO Business System Working Group
meeting held in Sydney on 1 December 2004

Employees can choose a new complying fund; stay in the existing employer fund; or not make a choice, resulting in contributions going to the default fund identified in the standard choice form.

Failure to meet these obligations may attract the Super Guarantee charge. Employees can change funds once every 12 months (more often if employer allows it) and do not have to use the Standard Choice Form.

The ATO says employers will need to keep records for five years to show the choice requirements have been met and any additional documentation provided. However, the ATO notes there is no need to send standard choice forms to the ATO or the fund.

The Regulations for Choice of Fund are not expected to be finalised until March 2005. The regulations will cover the content of the standard choice form, information an employee choosing a fund must give their employer, the minimum level of life insurance to be offered by the default fund, exemptions where a trustee may provide benefits to employers.

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Posted 18th February 2005 by David Jacobson in Business Planning

February 1, 2005

Financial Sector Transfers of Business

New Transfer Rules for applications for approval of mergers and transfers by banks, building societies, credit unions, insurers and friendly societies commence today (1 February 2005) pursuant to the Financial Sector (Transfers of Business) Act 1999.

APRA liaises with ASIC, ACCC and ATO to process these applications.

There has been no change to Section 63 of the Banking Act which makes it a criminal offence for an ADI to enter "into an arrangement or agreement for any sale or disposal of its
business by amalgamation or otherwise, or for the carrying on of business in
partnership with another ADI", without the Treasurer’s prior consent.

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Posted 1st February 2005 by David Jacobson in Business Planning, Financial Services

December 11, 2004

Electronic Record Retention

Draft Taxation Ruling TR 2004/D23 was released on 8 December 2004 for public comment by 21 January 2005.

The draft Ruling explains the principles associated with the retention of electronic records created from business transactions including those carried out through the internet for the purposes of s 262A of ITAA 1936. It sets out the ATO view on what are sufficient electronic records to be retained including those created by internet electronic commerce so as to record and explain all transactions and other acts engaged in by such persons for the purposes of the ITAA 1936. The draft Ruling also explains the ATO view on access under s 263 of the ITAA 1936 to electronic records including those created from electronic commerce.

As a result of the release of TR 2004/D23, Taxation Ruling TR97/21 is withdrawn with effect from 8 December 2004. The Notice of Withdrawal states that Taxation Ruling TR 97/21 does not deal with the retention of electronic records created from business transactions carried out through the Internet or through the use of Smartcards.

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Posted 11th December 2004 by David Jacobson in Business Planning

December 5, 2004

Demutualisation in Australia

Competitive pressures continue to force mutuals to look for new sources of capital (outside their existing membership).

In this article Mark Fitzgerald argues that there is no evidence that an organisation’s performance is improved by demutualisation. He refers to research undertaken by the Association des Assureurs Cooperatifs et Mutuels Europeens which has refuted this claim.

"The study of 97 companies in 11 countries within the European market
shows that mutuals outperform stockholder companies in greater claims
payments, lower costs and better overall financial performance.

Mutuality was shown to have a significant value by creating a circle
of mutual benefit focusing primarily on customer value resulting in
good performance, which in turn strengthens and promotes the mutual
idea…

The ICMIF Report makes interesting reading, in this regard, as it
demonstrates that most co-operatives seeking to demutualise in order to
inject new capital into their organisation, have usually fallen prey to
a takeover once they have become stockholding entities. The report
concludes that the arguments for demutualisation are not so much based
on hard facts, but more often on the ideology of demutualisation."

ACCORD has commenced work to compare the stated aims of proponents of demutualisation with the actual outcome.

ACCORD is currently examining the performance of 10 co-operatives
that have recently demutualised in NSW. By comparing their mandatory
prospectus pre-demutualisation with their current status, it aims to
measure the real as against rhetorical results and impacts of the
process.

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Posted 5th December 2004 by David Jacobson in Business Planning, Financial Services

November 30, 2004

Friendly Societies

APRA’s latest Insight magazine carries this article on the friendly society industry.

The key quote:
"…several friendly societies have demutualised and restructured their operations to focus on activities outside the traditional friendly society business. Competitive and other pressures are likely to lead to further rationalisation in the industry over coming years."

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Posted 30th November 2004 by David Jacobson in Business Planning