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The Australian Charities and Not-for-profits Commission (ACNC) has published a Guide for board members and others who manage charities.
The Guide covers registering with the ACNC, Commonwealth tax concessions, ongoing obligations and proposed minimum governance standards.
It also includes a “ready reckoner” of key ACNC dates.
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Just as athletes need to refine their techniques in order to perform better, businesses won’t get better at dealing with governance, risk and compliance by doing the same things as last year. You need to improve your processes and systems to be able to make more informed decisions and be more efficient.
In part what you will be doing in 2013 will be the result of events that occurred in 2012: changes to prudential requirements and laws such as the Corporations Act (FOFA), unclaimed money, the National Credit Act and the Privacy Act will require you to implement those changes.
And you will have to file the usual annual reports and compliance certificates.
So what will be different?
Assuming you are already attending to the “corporate hygiene” essentials, then by improving the way you explain these issues to your staff and by improving your processes you will perform better.
Compliance checklists can be helpful for repetitive tasks. The problem with checklists is making sure they do not become a mere “tick the box” exercise. Staff need to understand why they are being checked on. And some compliance obligations require “professional scepticism” to interpret the checklist answers.
Here’s a quick checklist to see if you have room for improvement.
When was the last time you reviewed your:
If you don’t know the answers or it’s been a while since you checked, then despite the pressures for short-term performance, addressing these issues will improve your long term success.
Here’s our updated regulatory timeline.
Talk to your local Langes representative to see how we can help you get better value from your budget.
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The Equal Opportunity for Women in the Workplace Amendment Act 2012 received Royal Assent on 6 December 2012. It amends the Equal Opportunity for Women in the Workplace Act 1999 and changes the title of the Act to Workplace Gender Equality Act 2012.
It imposes new reporting requirements on employers (including higher education institutions that are employers and non-public sector organisations with 100 or more employees).
The name of the Equal Opportunity for Women in the Workplace Agency is also changed to the Workplace Gender Equality Agency. The WGEA will monitor employer compliance.
New reporting obligations
A new reporting framework which requires employers to report against gender equality indicators will be phased in over a 2 year period.
If a relevant employer’s number of employees falls below 100, it must continue to report until employee numbers fall below 80.
The reporting period under the WGE Act refers to the 12 months from 1 April to 31 March, with reports being due between 1 April and 31 May.
For the reporting period 1 April 2012 to 31 March 2013, relevant employers will be required to prepare a public report which sets out the employer’s workplace profile and to comply with limited parts of the new framework.
Employers will be required to make public reports accessible to employees and shareholders and unions.
For the reporting period commencing on 1 April 2013 and onwards, a relevant employer must prepare and lodge a public report containing information relating to the employer and to the gender equality indicators. The report must be signed off by the employer’s CEO. New minimum standards will also be required to reported on from the 2014–15 reporting period.
The public report must:
(a) set out the workplace profile;
(b) describe the employer’s analysis of the issues in the employer’s workplace relating to equal opportunity for women;
(c) describe the actions taken by the employer during the reporting period to address the priority issues identified in the analysis; and
(d) describe the actions that the employer plans to take in the next reporting period to address the issues relating to employment matters that the employer would need to address to achieve equal opportunity for women in the workplace.
The gender equality indicators that a relevant employer must report on are:
• gender composition of the workforce;
• gender composition of governing bodies of relevant employers;
• equal remuneration between women and men;
• availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities;
• consultation with employees on issues concerning gender equality in the workplace; and
• any other matters specified in an instrument made by the Minister.
The employment matters are defined as:
• the recruitment procedure, and selection criteria, for appointment or engagement of persons as employees
• the promotion, transfer and termination of employment of employees
• training and development for employees
• work organisation including flexible working arrangements
• conditions of service of employees including equal remuneration between women and men
• arrangements for dealing with sex-based harassment of employees in the workplace
• arrangements for dealing with pregnant, or potentially pregnant employees and employees who are breastfeeding their children
• arrangements relating to employees with family or caring responsibilities.
Penalties
Although the Agency may identify non-compliant employers in its annual report to the Minister (“name and shame”) there are no penalties under the WGE Act.
Ineligibility for government contracts, grants and financial assistance may also be a substantial consequence for non-compliance with the WGE Act.
Employers may be subject to financial penalty (under the Fair Work Act 2009) or be ordered to pay damages (under the Sex Discrimination Act 1984) if they unlawfully discriminate against their employees on the basis of gender.
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ASIC has released Information Sheet 165 Claims of legal professional privilege (INFO 165) which sets out ASIC’s approach to claims of legal professional privilege over documents that would otherwise be subject to disclosure to ASIC under a statutory notice from ASIC.
If documents are privileged (because they constitute legal advice to you in anticipation of legal action) ASIC is not entitled to see them.
Although ASIC encourages the voluntary disclosure to ASIC of privileged information, providing documents to ASIC could enable a third party to claim that you have waived legal professional privilege. And ASIC may not accept your claim of privilege.
The Information Sheet seeks to prescribe a protocol for the identification of, and the claiming of, legal professional privilege over documents.
Companies (especially ASIC licensees) should have a procedure for responding to ASIC, ACCC and ATO investigations.
That procedure should include having your lawyers help respond to ASIC notices to produce and attend inspections to determine whether documents are privileged.
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The Credit Ombudsman Service (COSL) has released its 2011-2012 Annual Report on Operations.
Key data includes:
Due to the increase in the number of financial hardship complaints, as well as the time that needs to be expended to assist borrowers in these circumstances (which are usually emotive and financially critical in nature), the median number of days it took COSL to close a financial hardship complaint was 74 days (previously 45 days).
In about 65% (previously 72%) of the cases COSL received, the borrower had been served with a default notice or the lender had commenced legal proceedings, repossessed the security (with or without obtaining judgment) or issued a notice to vacate.
COSL is taking a number of steps to limit delays and reduce its timelines.
Apart from financial hardship the main areas of complaint included:
COSL had 16,979 Members as at 30 June 2012 in a variety of financial service sectors, of whom 4,383 joined in 2011/2012.
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APRA has issued for consultation draft prudential practice guide PPG 235 – Managing Data Risk to provide guidance on data risk management to Boards, senior management, risk management, business and technical specialists.
In APRA’s view, effective governance of data risk management should be aligned to the broader corporate governance frameworks and involve the clear articulation of Board and senior management responsibilities and expectations, formally delegated powers of authority and regular oversight.
Subject to the requirements of APRA’s prudential standards, an APRA-regulated institution has the flexibility to manage data risk in the way most suited to achieving its business objectives, having regard to the nature, size, complexity, risk profile and risk appetite of the institution.
What is data risk?
Data risk encompasses the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events impacting on data quality.
Examples include:
(a) fraud due to theft of data;
(b) business disruption due to data corruption or unavailability;
(c) execution delivery failure due to inaccurate data; and
(d) breach of legal or compliance obligations resulting from disclosure of confidential data.
For the purposes of the draft PPG, data risk is considered to be a subset of information and information technology risk, which in turn is a subset of operational risk. In addition, IT security risk overlaps with data risk.
The draft PPG pays particular attention to the outsourcing/offshoring of data.
APRA considers that the moving of data management responsibilities to service providers or other entities within a group (both on- and offshore) increases the risk that data lifecycle controls may be inadequate, with problems potentially magnified when offshoring is involved.
The possible causes of this increased risk include control framework variations, lack of proximity, reduced corporate allegiance, geopolitical risks and jurisdictional-specific requirements.
APRA expects a regulated institution to apply a cautious and measured approach when considering retaining data outside the jurisdiction it pertains to.
See also the Payments Systems Board report on operational risk and OAIC’s draft guide to information security
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The Government has announced that ASIC and APRA will consult in 2013 on proposals to regulate non-ADI finance companies that issue debentures to retail investors.
The proposals have two broad aims. The first is to improve the financial strength of retail debenture issuing finance companies. The second is to more clearly differentiate debenture issuers from banks, building societies and credit unions that are regulated under APRA’s prudential framework.
The proposals involve:
• mandatory minimum capital and liquidity requirements;
• restricting the ability of issuers to offer ‘at call’ investments and use ‘bank-like’ terms to describe their products;
• improving on-going disclosure to investors; and
• enhancing the capacity of trustees to monitor the financial performance of issuers and compliance with their legal obligations.
It is proposed amendments be made to the instrument that exempts Registered Financial Companies from the Banking Act to prohibit debenture issuers using terms like ‘deposit’ to describe their debentures. It is also proposed they be prohibited from offering these products on an ‘at-call’ basis and that debentures would have a minimum maturity period such as 31 days.
These proposals have two objectives. The first is to facilitate investor understanding that retail debentures have a different risk profile from ADI deposits. The second is to reduce the likelihood of issuers’ being subject to large numbers of investors seeking to redeem their debentures at very short notice.
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The Government has released for public consultation an exposure draft Tax Laws Amendment (2013 Measures No. 1) Bill 2013 relating to acquisitions and disposals of certain assets between self managed superannuation funds (SMSFs) and related parties.
If passed, the Bill will:
The prohibition on acquiring an asset from a related party will not apply:
A trustee or an investment manger of an SMSF must not dispose of an asset to a related party of the fund, subject to certain exceptions. This applies only to SMSFs.
The exceptions include:
A trustee or investment manager of an SMSF who disposes of an asset to a related party otherwise than in accordance with an exception contravenes a civil penalty provision, to which civil or criminal penalties may be sought by the Regulator.
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The Government has released for public consultation a discussion paper on development of governance standards for charities registered with the Australian Charities and Not-for-profits Commission (ACNC) and draft regulations on the new ACNC financial reporting framework.
Final standards are expected to commence on 1 July 2013.
The standards will apply to registered charities, excepting basic religious charities. Charities will need to comply with these standards to be, and remain, registered with the ACNC. The governance standards are intended to reflect a minimum set of outcomes for registered charities.
The six draft governance standards cover:
• purposes and NFP character of a charity;
• accountability to members (for those charities with members);
• compliance with Australian laws;
• responsible management of financial affairs;
• suitability of responsible entities; and
• duties of responsible entities.
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After a widespread investigation UBS has been fined a total of US$1.5billion in 3 different countries.
For misconduct relating to the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR), UBS has agreed to pay a US $700 million civil monetary penalty to the U.S. Commodity Futures Trading Commission, cease and desist from further violations , and take specified steps to ensure the integrity and reliability of its LIBOR and other benchmark interest rate submissions and improve related internal controls.
UBS’s breaches encompassed a number of issues, involved a significant number of employees and occurred over a period of years in a number of countries.
In matters concerning the U.S. Justice Department, UBS Securities Japan Co., Ltd., agreed to plead guilty to a criminal charge of wire fraud, UBS AG agreed pursuant to a non-prosecution agreement to continue to cooperate with the Justice Department, and UBS AG and UBS Securities Japan Co., Ltd. agreed to make payments that when combined total $500 million.
In addition, the United Kingdom’s Financial Services Authority (“FSA”) issued a Final Notice regarding its enforcement action against UBS AG and has imposed a penalty of £160 million, the equivalent of $259.2 million, against the Bank; the Swiss Financial Market Authority (“FINMA”) issued an order resolving proceedings against UBS AG and requiring disgorgement of 59 million Swiss Francs, the equivalent of $64.3 million.
Wall Street Journal
Barclay’s Bank fine
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