Commonwealth Numbered Acts Commonwealth Numbered ActsSuperannuation Industry (Supervision) Act 1993
1 Subsection 10(1)
Insert:
"eligible rollover fund" : a regulated superannuation fund is an eligible rollover fund if an RSE licensee is authorised under section 242F to operate the fund as an eligible rollover fund.
2 Subsection 10(1) (definition of enhanced director obligations )
Repeal the definition, substitute:
"enhanced director obligations" means:
(a) for MySuper products--the obligations imposed by:
(i) section 29VO; and
(ii) covenants prescribed under section 54A that are specified in the regulations as forming part of the enhanced director obligations for MySuper products; and
(b) for eligible rollover funds--the obligations imposed by:
(i) section 242L; and
(ii) covenants prescribed under section 54A that are specified in the regulations as forming part of the enhanced director obligations for eligible rollover funds.
3 Subsection 10(1) (definition of enhanced trustee obligations )
Repeal the definition, substitute:
"enhanced trustee obligations" means:
(a) for MySuper products--the obligations imposed by:
(i) covenants referred to in section 52, as enhanced by the obligations imposed under section 29VN; and
(ii) covenants prescribed under section 54A that are specified in the regulations as forming part of the enhanced trustee obligations for MySuper products; and
(b) for eligible rollover funds--the obligations imposed by:
(i) covenants referred to in section 52, as enhanced by the obligations imposed under section 242K; and
(ii) covenants prescribed under section 54A that are specified in the regulations as forming part of the enhanced trustee obligations for eligible rollover funds.
4 Subsection 10(1) (after paragraph (u) of the definition of reviewable decision )
Insert:
(ua) a decision of APRA under subsection 242F(2) to refuse to authorise an RSE licensee to operate a regulated superannuation fund as an eligible rollover fund; or
(ub) a decision of APRA under subsection 242J(1) to cancel an authority to operate a regulated superannuation fund as an eligible rollover fund; or
5 After subsection 29E(6B)
Insert:
RSE licensees who apply for authority to operate eligible rollover funds
(6C) An additional condition is imposed on each RSE licensee who makes an application under section 242A for authority to operate a regulated superannuation fund as an eligible rollover fund. The condition is that the RSE licensee must give effect to an election made in accordance with section 242B.
RSE licensees authorised to operate eligible rollover funds
(6D) An additional condition is imposed on each RSE licensee that is authorised to operate a regulated superannuation fund as an eligible rollover fund. The condition is that the RSE licensee must ensure that the governing rules of the fund are not varied so that:
(a) the only purpose of the fund is no longer to be a temporary repository for amounts transferred to the fund from other regulated superannuation funds in circumstances allowed by the RSE licensee law; or
(b) a single diversified investment strategy is no longer adopted in relation to assets of the fund.
6 Paragraph 29T(1)(e)
Omit "(within the meaning of Part 24)".
7 At the end of subsection 54A(4)
Add ", for MySuper products or eligible rollover funds".
8 At the end of section 55B
Add:
; or (e) an election made in accordance with section 242B (election to transfer amounts held in an eligible rollover fund if authorisation cancelled); or
(f) an election made in accordance with section 242C (election not to pass costs of paying conflicted remuneration to members of eligible rollover fund).
9 Paragraph 193(l)
Repeal the paragraph, substitute:
(l) subsection 242M(1);
(m) section 388;
(n) section 394.
10 Part 24 (heading)
Repeal the heading, substitute:
Part 24 -- Eligible rollover funds
11 Before section 241
Insert:
12 Section 241
Repeal the section, substitute:
The object of this Part is:
(a) to provide for the authorisation of RSE licensees to operate eligible rollover funds; and
(b) to impose additional obligations on trustees, and directors of corporate trustees, in relation to eligible rollover funds; and
(c) to provide a facility for the payment of benefits to eligible rollover funds.
13 Section 242 (definition of eligible rollover fund )
Repeal the definition.
14 Section 242 (definition of fund )
Omit "or an approved deposit fund".
15 After section 242
Insert:
Division 2 -- Authority to operate an eligible rollover fund
Subdivision A -- Applying for authority
242A Application for authority to operate an eligible rollover fund
Who may apply?
(1) An RSE licensee of a prescribed class may apply to APRA for authority to operate a regulated superannuation fund as an eligible rollover fund.
Requirements for applications
(2) An application for authority to operate a regulated superannuation fund as an eligible rollover fund must:
(a) be in the approved form; and
(b) contain the information required by the approved form; and
(c) state the RSE licensee's and the fund's ABNs; and
(d) be accompanied by an election made in accordance with each of the following sections:
(i) section 242B;
(ii) section 242C.
(3) If:
(a) an RSE licensee applies for authority to operate a regulated superannuation fund as an eligible rollover fund; and
(b) after the application is made, but before APRA decides the application, information contained in the application ceases to be correct;
the RSE licensee must give APRA the correct information, in writing, as soon as practicable after the information in the application ceases to be correct.
(4) An application is taken not to comply with this section if subsection (3) is contravened.
Note: APRA cannot give authority to operate a regulated superannuation fund as an eligible rollover fund while the application does not comply with this section: see paragraph 242F(1)(a).
Lapsed applications
(5) An application for authority lapses if:
(a) it was made by an RSE licensee; and
(b) the RSE licensee ceases to be an RSE licensee, or an RSE licensee of a class prescribed for the purposes of subsection (1), before:
(i) APRA makes a decision on the application for authority; or
(ii) if APRA's decision with respect to the application is subject to review under this Act--the review is finally determined or otherwise disposed of.
242B Election to transfer amounts held in eligible rollover fund if authorisation cancelled
An RSE licensee that applies for authority to operate a regulated superannuation fund as an eligible rollover fund makes an election in accordance with this section if:
(a) the RSE licensee elects:
(i) to take the action required under the prudential standards in relation to amounts held in the eligible rollover fund, if the authority to operate the fund as an eligible rollover fund is cancelled under subsection 242J(1); and
(ii) to do so before the end of a period of 90 days beginning on the day on which notice of the cancellation is given to the RSE licensee under subsection 242J(3); and
(b) the election is in writing; and
(c) the election is in the approved form.
242C Election not to charge members of eligible rollover fund for payment of conflicted remuneration
(1) An RSE licensee that applies for authority to operate a regulated superannuation fund as an eligible rollover fund makes an election in accordance with this section if:
(a) the RSE licensee elects that, if the authority is given, the RSE licensee will not charge any member of the fund a fee all or part of which relates directly or indirectly to costs incurred by a trustee or the trustees of the fund:
(i) in paying conflicted remuneration to a financial services licensee, or a representative of a financial services licensee; or
(ii) in paying an amount to another person that a trustee of the fund knows, or reasonably ought to know, relates to conflicted remuneration paid by that other person to a financial services licensee, or a representative of a financial services licensee; and
(b) the election is in writing; and
(c) the election is in the approved form.
(2) In this section:
"conflicted remuneration" has the same meaning as in Part 7.7A of the Corporations Act 2001 , subject to the extension of that meaning in subsection (3).
"representative" , of a financial services licensee, has the same meaning as in Part 7.6 of the Corporations Act 2001 .
(3) In this section, conflicted remuneration also has the meaning it would have if:
(a) financial product advice provided to the RSE licensee mentioned in subsection (1) by a financial services licensee, or a representative of a financial services licensee, mentioned in subparagraph (1)(a)(i) or (ii) were provided to the RSE licensee as a retail client; and
(b) financial product advice provided to the other person mentioned in subparagraph (1)(a)(ii) by a financial services licensee, or a representative of a financial services licensee, mentioned in that subparagraph were provided to the other person as a retail client.
242D APRA may request further information
APRA may give an RSE licensee that has applied for authority to operate a regulated superannuation fund as an eligible rollover fund a notice requesting the RSE licensee to give APRA, in writing, specified information relating to the application.
Note: A failure to give the requested information delays the time within which APRA must decide the application: see paragraph 242E(1)(b).
242E Period for deciding applications for authority
(1) APRA must decide an application by an RSE licensee for authority to operate a regulated superannuation fund as an eligible rollover fund:
(a) within 60 days after receiving the application; or
(b) if the applicant was requested to provide information under section 242D--within 60 days after:
(i) receiving from the RSE licensee all of the information the RSE licensee was requested to provide under that section; or
(ii) all notices relating to that information being disposed of;
unless APRA extends the period for deciding the application under subsection (2).
(2) APRA may extend the period for deciding an application by an RSE licensee for authority to operate a regulated superannuation fund as an eligible rollover fund by up to 60 days if APRA informs the RSE licensee of the extension:
(a) in writing; and
(b) within the period in which it would otherwise be required to decide the application under subsection (1).
(3) If APRA extends the period for deciding an application for authority to operate a regulated superannuation fund as an eligible rollover fund, it must decide the application within the extended period.
(4) If APRA has not decided an application for authority to operate a regulated superannuation fund as an eligible rollover fund by the end of the period by which it is required to decide the application, APRA is taken to have decided, at the end of the last day of that period, to refuse the application.
242F Authority to operate an eligible rollover fund
(1) APRA must authorise an RSE licensee to operate a regulated superannuation fund as an eligible rollover fund if, and only if:
(a) the application for authority complies with section 242A; and
(b) the applicant has provided to APRA all information that the applicant was requested, under section 242D, to provide, or the request has been disposed of; and
(c) the fund is registered under Part 2B; and
(d) the RSE licensee is of a class prescribed for the purposes of subsection 242A(1); and
(e) APRA is satisfied that, under the governing rules of the fund:
(i) the only purpose of the fund is to be a temporary repository for amounts transferred to the fund from other regulated superannuation funds in circumstances allowed by the RSE licensee law; and
(ii) a single diversified investment strategy is to be adopted in relation to all assets of the fund; and
(f) APRA is satisfied that the RSE licensee is likely to comply with the enhanced trustee obligations for eligible rollover funds; and
(g) APRA is satisfied that the directors of the RSE licensee are likely to comply with the enhanced director obligations for eligible rollover funds; and
(h) APRA is satisfied that the RSE licensee is likely to comply with the general fees rules; and
(i) APRA is satisfied that the RSE licensee is not likely to contravene section 242P.
(2) Otherwise APRA must refuse to give the authority.
If APRA authorises an RSE licensee to operate a regulated superannuation fund as an eligible rollover fund, APRA must notify the RSE licensee in writing of the authority.
242H APRA to give notice of refusal of authority
If APRA refuses an application by an RSE licensee for authority to operate a regulated superannuation fund as an eligible rollover fund, APRA must take all reasonable steps to ensure that the RSE licensee is given a notice:
(a) informing it of APRA's refusal of the application; and
(b) setting out the reasons for the refusal;
as soon as practicable after refusing the application.
Subdivision C -- Cancelling authority
242J Cancelling authority to operate eligible rollover fund
(1) APRA may, in writing, cancel an authority to operate a regulated superannuation fund as an eligible rollover fund.
(2) Without limiting subsection (1), APRA may cancel an authority to operate a regulated superannuation fund as an eligible rollover fund if:
(a) APRA is no longer satisfied that, under the governing rules of the fund:
(i) the only purpose of the fund is to be a temporary repository for amounts transferred to the fund from other regulated superannuation funds in circumstances allowed by the RSE licensee law; and
(ii) a single diversified investment strategy is to be adopted in relation to all assets of the fund; or
(b) APRA is no longer satisfied that the RSE licensee is likely to comply with the enhanced trustee obligations for eligible rollover funds (whether because of a previous failure to do so, or for any other reason); or
(c) APRA is no longer satisfied that the directors of the RSE licensee are likely to comply with the enhanced director obligations for eligible rollover funds (whether because of a previous failure to do so, or for any other reason); or
(d) APRA is no longer satisfied that the RSE licensee is likely to comply with the general fees rules (whether because of a previous failure to do so, or for any other reason); or
(e) APRA is no longer satisfied that the RSE licensee is not likely to contravene section 242P (whether because of a previous contravention of that section, or for any other reason); or
(f) the fund ceases to be registered under Part 2B; or
(g) the RSE licensee ceases to be of a class prescribed for the purposes of subsection 242A(1); or
(h) APRA is satisfied that the RSE licensee has contravened a provision of the governing rules of the eligible rollover fund; or
(i) APRA is satisfied that the RSE licensee has failed to give effect to an election made in accordance with section 242C (election not to pass costs of conflicted remuneration to members of eligible rollover fund).
(3) If APRA cancels an authority to operate a regulated superannuation fund as an eligible rollover fund it must take all reasonable steps to ensure that the RSE licensee is given a notice informing the RSE licensee:
(a) that APRA has cancelled the authority; and
(b) of the reasons for the cancellation.
Subdivision D -- Trustee obligations relating to eligible rollover funds
242K Additional obligations of a trustee in relation to an eligible rollover fund
Each trustee of an eligible rollover fund must promote the financial interests of the beneficiaries of the fund, in particular returns to those beneficiaries (after the deduction of fees, costs and taxes).
(1) Each director of a corporate trustee of an eligible rollover fund must exercise a reasonable degree of care and diligence for the purposes of ensuring that the corporate trustee carries out the obligations referred to in section 242K.
(2) The reference in subsection (1) to a reasonable degree of care and diligence is a reference to the degree of care and diligence that a superannuation entity director would exercise in the corporate trustee's circumstances.
242M Contravention of section 242K or 242L
(1) A person must not contravene section 242K or 242L.
(2) Subsection (1) is a civil penalty provision as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or of being involved in a contravention of, that subsection.
(3) A contravention of subsection (1) does not result in the invalidity of a transaction.
A provision of the governing rules of an eligible rollover fund is void to the extent that it is inconsistent with:
(a) the obligations that apply to a trustee of the fund under section 242K; or
(b) the obligations that apply to the directors of a corporate trustee of the fund under section 242L.
Subdivision E -- Miscellaneous
242P Operating a fund as an eligible rollover fund when not authorised to do so
(1) A person commits an offence if:
(a) the person makes a representation; and
(b) the representation is that a regulated superannuation fund is an eligible rollover fund; and
(c) the RSE licensee for the fund does not have authority to operate the fund as an eligible rollover fund.
Penalty: 60 penalty units.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility and Part IA of the Crimes Act 1914 contains provisions dealing with penalties.
(2) Subsection (1) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code .
242Q Prudential standards dealing with amounts held in eligible rollover funds
A prudential standard determined under section 34C may include provisions:
(a) requiring an RSE licensee whose authority to operate a regulated superannuation fund as an eligible rollover fund is cancelled under subsection 242J(1) to transfer any amounts held in the eligible rollover fund to a regulated superannuation fund that:
(i) is an eligible rollover fund; or
(ii) offers a MySuper product; and
(b) setting out the requirements that must be met in relation to the transfer of such amounts; and
(c) dealing with other matters relating to such amounts.
242R No liability for giving effect to a section 242B election
A trustee of a regulated superannuation fund is not subject to any liability to a member of the fund for an action taken to give effect to an election made in accordance with section 242B.
16 Before section 243
Insert:
Division 3 -- Facility to pay benefits to eligible rollover funds
16A After paragraph 349B(3)(b)
Insert:
or (c) it would require a person to take action in relation to an amount held in an entity that is or was an eligible rollover fund;
16B Subsection 349B(4)
After "paragraph 29SAC(1)(a)", insert "or 242C(1)(a)".
16C After paragraph 349B(7)(b)
Insert:
(ba) action in relation to an amount held in an entity that is or was an eligible rollover fund; and
16D Paragraph 349B(7)(c)
After "paragraph 29SAC(1)(a)", insert "or 242C(1)(a)".
17 At the end of the Act
Add:
Part 34 -- Additional transitional provisions relating to eligible rollover funds
In this Part:
"existing ERF" means a regulated superannuation fund that is an eligible rollover fund within the meaning of the old law immediately before the commencement of this section.
"old law" means this Act as in force immediately before the commencement of this section.
392 Authority to operate an eligible rollover fund given before 1 January 2014
If, before 1 January 2014, APRA authorises an RSE licensee to operate a regulated superannuation fund as an eligible rollover fund, that authority takes effect on 1 January 2014.
393 Operation of existing ERFs after commencement
Despite the amendments made by Schedule 7 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012 , an existing ERF is taken to be an eligible rollover fund for the purposes of Division 3 of Part 24 during the period:
(a) beginning on the day this section commences; and
(b) ending on 31 December 2013.
394 Moving amounts held in existing ERFs
(1) If:
(a) immediately before 1 January 2014, an amount is held in an existing ERF; and
(b) on that day, the RSE licensee of the existing ERF is not authorised to operate the existing ERF as an eligible rollover fund;
the RSE licensee of the existing ERF must take the action required under the prudential standards in relation to the amount before the end of a period of 90 days beginning on 1 January 2014.
(2) A prudential standard determined under section 34C may include provisions:
(a) requiring an RSE licensee of an existing ERF to, in the circumstances mentioned in subsection (1), transfer the amount held in the existing ERF to a regulated superannuation fund that:
(i) is an eligible rollover fund; or
(ii) offers a MySuper product; and
(b) setting out the requirements that must be met in relation to the transfer of such an amount; and
(c) dealing with other matters relating to such an amount.
(3) A trustee of a regulated superannuation fund is not subject to any liability to any member of the fund for an action taken in accordance with this section.
Retirement Savings Accounts Act 1997
18 Section 88 (definition of eligible rollover fund )
Omit "Part 24 of".
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