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December 20, 2013

ASIC relief on superannuation disclosure

ASIC has issued Class Order [CO 13/1534] Deferral of Stronger Super amendments in relation to PDS and periodic statement disclosure which provides for the following:

  • a change to the start date for compliance with new fees and costs disclosure arrangements: the class order extends the date of compliance from 31 December 2013 to 1 July 2014 for Product Disclosure Statements given on or after that date, and reporting periods on or after 1 July 2014 for periodic statements and aligns it with the commencement date for managed investment products, and
  • interim relief so that RSE licensees do not have to provide a hard copy of the product dashboard with the periodic statement: the class order provides interim relief from compliance with subregulation 7.9.20(1)(o), if a trustee includes in the periodic statement, or accompanies the periodic statement with, a website address for the latest product dashboard for the investment option. This also applies to periodic statements provided to members who are exiting the fund.

ASIC has also provided a no-action position for RSE licensees so that information about accrued default amounts does not need to be included in an exit statement.

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Posted 20th December 2013 by David Jacobson in Corporations Act, Superannuation

December 17, 2013

Privacy Commissioner’s approach to privacy enforcement

In a recent speech Timothy Pilgrim, the Privacy Commissioner, gave an update on his approach to enforcement and preparation for the new rules on 12 March 2014.

OAIC's Enforcement approach

" I have been telling businesses and government since I became Privacy Commissioner in mid-2010, my focus will always be on resolving the majority of complaints via conciliation. However, I will not shy away from using new and existing powers where it is appropriate to do so. My publication of reports into major breaches is an example of this.

I have been asked whether I will I be taking a ‘softly, softly’ approach after implementation of the reforms. Well, I have never been known to be subtle so the answer to that question is probably ‘no’. Now before people get too excited about the bluntness of that response remember that I said I would always start by trying to resolve matters through conciliation. But please do not interpret conciliation to mean softly, softly."

Credit Reporting Code

"We have also been working with the Australian Retail Credit Association (ARCA) on the credit reporting code, which will be an important tool. This has been a big task for our Office and I am pleased to say that it is nearing completion — all the substantive issues have been addressed and we are expecting to receive the final amended version from ARCA before Christmas."

Guidelines

"People have noted the delay in the release of Guidelines, and we have been asked whether this will mean the OAIC will be taking a lenient approach for the period immediately following commencement, as entities will still be designing processes and policies.

My answer to that is ‘no’. Reference to the NPP Guidelines would tell you that the guidelines on privacy principles are not intended to be a step by step guide to developing process and procedures, and this continues to apply to the APP guidelines."

Preparation for 12 March

"If your policies and procedures are robust and up-to-date then you will be well on your way to best privacy practice. To this end, I recommend you:

  • Get working on your APP privacy policy: Establishing a comprehensive and practical privacy policy that is ready to go in March will get you started with a ‘privacy by design’ approach to your business.
  • Review information security: The Guide to information security that we released in Privacy Awareness Week this year gives some practical advice about how to ensure your systems comply with information security requirements.
  • Review your data breach plan: Do you have a response plan ready for if you have a data breach? The OAIC’s Data breach notification guide will provide you with processes to follow if your business does find itself in this situation. Remember, although mandatory data breach laws did not pass this year, being transparent about data breaches, and acting quickly to mitigate the damage is the best way to protect your business reputation.
  • Conduct a privacy impact assessment for new projects: Conducting a PIA for any new processes will help you to identify any potential problems before they impact on your business. The Privacy impact assessment guide is available on our website to assist you conduct a PIA."

More Privacy articles

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Posted 17th December 2013 by David Jacobson in Privacy

Review of AML/CTF Act

The Government has announced a review of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws: Terms of reference and Issues Paper.

The AML/CTF Act, Rules and Regulations together cover more than 13,800 businesses, including domestic and foreign owned banks, money transfer businesses (known as remittance dealers) and casinos.

Two topics related to the AML/CTF regime are not covered in this review: potential enhancements to the existing customer due diligence measures and the AUSTRAC supervisory levy are the subject of separate reviews.

The review will consider issues such as whether designated non-financial businesses and professions (such as lawyers, accountants, real estate agents, trust and company service providers and high value dealers) and the services they provide should be regulated under the regime.

It will also consider changes in technology such as the development of online identity verification systems.

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Posted 17th December 2013 by David Jacobson in Anti-money laundering, Financial Services

Tax review update

The Assistant Treasurer has announced the outcome of consultations over the backlog of 92 announced but unlegislated tax and superannuation measures. (Background)

The Government previously announced that 18 measures would proceed, 3 would be amended and seven would not go ahead including motor vehicle FBT changes and the cap on self-education expenses.

Of the 64 measures that were considered further, 16 will proceed and 48 measures will not proceed (including Not-for-profit sector reforms ).

Those that are proceeding include:
•Capital gains tax treatment of earn out arrangements;
•Income tax treatment of instalment warrants;
•GST reverse charge for going concerns.

Those that are not proceeding include:
•Research and development tax incentive – quarterly credits;
•Capital gains tax relief for taxpayers affected by natural disasters;
•Symmetric treatment of bad debts.

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Posted 17th December 2013 by David Jacobson in Tax

Do Not Call Register review

The Government has issued a discussion paper reviewing the optimal period of registration on the Do Not Call Register to opt out of receiving most unsolicited telemarketing calls and marketing faxes.

When the Register was first established, registrations were valid for three years from registration. Since 2007, the registration period has been extended on three occasions, and is now set at eight years.

Public comment is sought on four options:
1.Reduce the period of registration to three years
2.Retain the current eight year registration period
3.Extend the registration period to indefinite
4.Remove the need to register

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Posted 17th December 2013 by David Jacobson in Do Not Call Register, Marketing, Privacy

SA Identity verification compulsory compliance postponed

The South Australia Registrar-General has formally announced that the date for compulsory compliance with the Verification of Identity policy has been postponed to 1 April 2014 (Notice to Lodging parties number 171 dated 13 December 2013).

Background

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Posted 17th December 2013 by David Jacobson in Financial Services, Property

December 12, 2013

Season’s greetings

Thank you for reading our news throughout 2013.

We wish you a happy, successful and healthy 2014.

Langes will remain open over the holiday season, except for public holidays.

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Posted 12th December 2013 by David Jacobson in Business Planning

Leases from insolvent landlords at risk

In Willmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (In Liquidation) [2013] HCA 51 the High Court decided that the liquidators of a lessor company had the power to disclaim the leases to investors under section 568(1)(f) of the Corporations Act 2001.

A majority of the High Court decided that the liabilities of the lessor (including its obligations to provide quiet enjoyment and not derogate from the grant of exclusive possession) would be terminated from the day on which the disclaimer takes effect, as would the correlative rights of the tenant. Each tenant's estate or interest in the land would be terminated.

The decision has implications for tenants who make substantial improvements to property over which they have a long-term lease or who borrow on the security of their lease: the solvency of their landlord is now a risk factor.

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Posted 12th December 2013 by David Jacobson in Corporations Act, Financial Services, Property, Risk Management

Indicators of potential money laundering/terrorism financing activity

AUSTRAC's 2013 typologies report includes 23 real-life case studies showing how legitimate services offered by Australian businesses have been exploited for criminal purposes, including for drug trafficking, child exploitation, fraud and tax evasion.

The list below features some of the major indicators to identify potential money laundering or terrorism financing activity which appear within the case studies of the report:
• A group of individuals undertaking large structured foreign exchange transactions on multiple occasions
• A large number of individuals conducting domestic electronic transfers and direct deposits to linked company bank accounts
• Account activity inconsistent with customer profile
• Customer receives international funds transfers declared as loans from a foreign lender
• Customer undertakes consistent high-volume gaming chip ‘cash outs’ which are claimed to be winnings, an activity that appears unlikely given the comparatively low amounts of funds withdrawn by the customer for gaming purposes
• High-value cash deposits to pay for international funds transfers
• High-volume account activity involving significant amounts of cash funds
• High volume of cheques cashed
• International funds transfers to a high-risk jurisdiction
• Large cash deposits into an online betting account
• Multiple customers conducting international funds transfers to the same overseas beneficiary
• Multiple customers conducting international funds transfers under the guidance or instruction of another individual (i.e. use of ‘third parties’)
• Outgoing funds transfers sent to overseas entities matched by incoming funds transfers, in similar amounts, from different entities located in the same countries
• Opening and use of business accounts to transfer funds to Australian and offshore casinos
• Regular or multiple cash deposits below the AUD10,000 reporting threshold (i.e. structured cash deposits)
• Sudden increase in purchase of properties inconsistent with customer’s established transaction/wealth profile
• Third-party cash deposits made at branches distant from the branch at which the account is held
• Third-party cash deposits made by unidentifiable persons or by evasive customers with incomplete identification
• Use of multiple large cash payments for mortgage payments.

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Posted 12th December 2013 by David Jacobson in Anti-money laundering, Financial Services

Andrews v ANZ: bank exception fees case update

The question of whether bank exception fees were unlawful penalties or lawful service fees is in issue in the representative action of Andrews v Australian and New Zealand Banking Group Limited.

On 6 September 2012 the High Court of Australia made a declaration to the effect that certain fees were capable of characterisation as penalties even though they were not charged for a breach of contract (see note here ).

The trial in the Federal Court has concluded and a judgment is expected by April 2014.

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Posted 12th December 2013 by David Jacobson in Consumer Law, Financial Services
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