Australian Regulatory Compliance Review from Langes+ Lawyers

February 15, 2012

Super fund loans

Treasury has released an exposure draft of amendments to the Corporations Regulations 2001 to provide that certain borrowing arrangements by superannuation fund trustees permitted by the Superannuation Industry (Supervision) Act 1993 (SIS Act) are financial products under the Corporations Act 2001.

Limited recourse borrowing arrangements are permitted under subsections 67A and 67B of the SIS Act.

There is currently a conflict between the SIS Act and the National Credit Code in respect of super fund loans to acquire a residential investment property where the borrowers are natural persons and the property trustee giving the mortgage is a different natural person.

The proposed Regulations amend the Corporations Regulations 2001 to provide that:

limited recourse borrowing arrangements are financial products under the Corporations Act when acquired by superannuation funds;
limited recourse borrowing arrangements are not a credit facility under the Corporations Act when acquired by superannuation funds; and
an Australian Financial Services Licence covering securities or derivatives is taken to also cover limited recourse borrowing arrangements.

Financial institutions who currently provide SMSF loans may need to vary their AFSL licence if they are not currently authorised to issue securities or derivatives.

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Posted 15th February 2012 by David Jacobson in Financial Services, Superannuation

Disclosure of superannuation contributions

Treasury has released an exposure draft for the payslip reporting of superannuation contributions.

This measure will amend the Superannuation Industry (Supervision) Act 1993 (the SIS Act) to require employers to report, on payslips, any information prescribed in the regulations about superannuation contributions. The regulations will in turn require employers to report the amount of superannuation contributions, as well as the date on which the employer expects to pay them.

Treasury has also released an exposure draft of a measure which will permit the Australian Taxation Office to disclose details of an individual’s superannuation interests and superannuation benefits to superannuation providers and their administrators to enable funds to assist their members to find and consolidate their superannuation interests.

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Posted 15th February 2012 by David Jacobson in Superannuation, Tax

GST treatment of mortgagee sale

Treasury has released an exposure draft of the Tax Laws Amendment (2012 Measures 2 No. 3) Bill 2012 which will clarify that a mortgagee in possession or control which sells the property of a corporation must report for GST Purposes and that the controller of the corporation does not need to report as well.

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Posted 15th February 2012 by David Jacobson in Financial Services, Tax

Retirement Savings Accounts Amendment

Retirement Savings Accounts Amendment Regulation 2012 (No. 1) reduces the minimum payment amounts for account-based pensions by 25 per cent for the 2012‑13 financial year.

The reduction in the minimum payment amounts for 2012-13 applies to account-based annuities and pensions, allocated annuities and pensions, and market linked annuities and pensions.

This measure is designed to assist pension account balances to recover from capital losses associated with the global financial crisis.

A consolidated Retirement Savings Accounts Regulations 1997 can be downloaded here.

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Posted 15th February 2012 by David Jacobson in Superannuation, Tax

February 13, 2012

National Business Names register to start on 28 May

ASIC has announced that the new ASIC business names register is expected to go live on 28 May 2012. From that date ASIC will nationally register and maintain business names and provide search facilities.

Business names will no longer be required to register separately in each state and territory they operate in. The registration fee will be $30 for one year or $70 for three years.

All existing registrations will be transferred to the new business name service automatically.

Following the start of the new service on 28 May 2012, ASIC will issue renewal reminders to all existing businesses with registered business names.

As registration of a business name will require an Australian Business Number (ABN), a joint online application for an Australian Business Number (ABN) and national business name registration will need to be completed.

The registration of a business name under this legislation will not give rise to any proprietary rights over that name; that will still require registration of a trade mark.

More information

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Posted 13th February 2012 by David Jacobson in Business names

Consultation paper on reform of charitable fundraising regulation

Treasury has released a consultation paper on reform of charitable fundraising regulation.

The purpose of this discussion paper is to seek comments on a proposed framework for a new nationally consistent approach to regulation of charitable fundraising. At present, every State and Territory of Australia, with the exception of the Northern Territory, separately regulates fundraising by charities. Appendix A sets out the current State and Territory fundraising legislation.

The discussion paper calls for comments on:

Defining fundraising activities that are to be regulated
Activities that might be exempt from fundraising regulation
Implementing a national approach to fundraising regulation
Registering for fundraising activities
Application of consumer protection laws to charitable fundraising
Charitable fundraising and unsolicited selling provisions of the Australian Consumer Law
Information disclosure at the time of giving
Information disclosure after the time of giving
Internet and electronic fundraising
Fundraising by third parties on behalf of charities./li>

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Posted 13th February 2012 by admin in Charities, Not-for-profit sector

The naming of debt products: debentures and secured notes

ASIC has announced changes to the naming of debt products such as debentures and secured notes.

ASIC introduced the ‘secured note’ description by providing relief to the law under ASIC Class Order [CO 12/1482] When debentures can be called secured note.

ASIC will now permit issuers of debt to name its product a secured note if there is a first ranked security over some assets, so long as conditions about describing the security are met. Issuers may only call a product a debenture if the security is over tangible property.

All issuers must make clear in their advertising that the products are not a bank deposit and must not suggest that they compare favourably to a bank deposit.

Regulatory Guide 69 Debentures and notes: Improving disclosure for retail investors (RG 69) and Regulatory Guide 156 Advertising of debentures and notes to retail investors (RG 156) have been updated.

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Posted 13th February 2012 by admin in Corporations Act, Financial Services

Use of the term “merchant bank” revoked

The Australian Prudential Regulation Authority has revoked an existing consent for non-regulated financial businesses operating in the short-term money market to describe themselves as ‘merchant banks’.

In its review of the guidelines for approval to use the term ‘bank’ under Section 66 of the Banking Act 1959, APRA found that the term ‘merchant bank’ had been overtaken in common language by the term ‘investment bank’, a term that APRA does not allow unauthorised financial businesses to use. Therefore, APRA believes the use of the term ‘merchant bank’ could cause confusion in the minds of the public when used by entities that are not authorised to carry on banking business in Australia.

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Posted 13th February 2012 by David Jacobson in Financial Services

Volunteers and the new work health and safety laws

Safe Work Australia has published a site clarifying the rights and obligations of volunteer organisations under the Work Health and Safety Act.

The new Act commenced on 1 January 2012 in New South Wales, Queensland, the Australian Capital Territory, the Commonwealth and the Northern Territory.

Volunteer organisations that employ paid staff are covered by the new laws and may need to make some changes to ensure they meet their duty of care to their volunteers.

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Posted 13th February 2012 by David Jacobson in Not-for-profit sector, Workplace

Superannuation Data and Payment Standards

The Government has released for comment exposure draft legislation and a draft explanatory memorandum for the Superannuation Legislation Amendment (Stronger Super and Other Measures) (No. 2) Bill 2012 amending the Superannuation Industry (Supervision) Act 1993 and the Retirement Savings Accounts Act 1997 establishing a compliance regime for the superannuation data and payment regulations and standards that applies to trustees of regulated superannuation entities and employers.

The superannuation data and payment standards may specify the format of 1 or more unique identifiers to be included in superannuation payments and information.

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Posted 13th February 2012 by David Jacobson in Superannuation