An Act to make provision for the supervision of certain entities engaged in the superannuation industry, and for related purposes
Part 1—Preliminary
Division 1—Preliminary
1 Short title
This Act may be cited as the Superannuation Industry (Supervision) Act 1993.
2 Commencement
(1) Subject to this section, Parts 1, 2, 21, 27, 28, 29, 30, 31 and 32 commence on the day on which this Act receives the Royal Assent.
(2) Part 1 (in so far as it relates to section 117) and section 117 are taken to have commenced on 21 October 1992.
(3) Parts 18, 19, 20, 23 and 24 and section 342 commence on 1 July 1994.
(4) The remaining provisions commence on 1 December 1993, but do not apply to a fund, scheme or trust in relation to a year of income of the fund, scheme or trust earlier than the 1994‑95 year of income.
3 Object of Act
Supervision of certain superannuation entities
(1) The main object of this Act is to make provision for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by APRA, ASIC and the Commissioner of Taxation.
Basis for supervision
(2) The basis for supervision is that those funds and trusts are subject to regulation under the Commonwealth’s powers with respect to corporations or pensions (for example, because the trustee is a corporation). In return, the supervised funds and trusts may become eligible for concessional taxation treatment.
Whole industry not covered
(3) The Act does not regulate other entities engaged in the superannuation industry.
4 Summary of provisions
The Act contains provisions dealing with the following matters:
Part No. | Matter dealt with |
1 | interpretation |
2A | licensing of trustees and groups of individual trustees |
2B | registrable superannuation entities |
2C | MySuper |
3 | operating standards for funds and trusts |
3A | Prudential standards concerning registrable superannuation entities |
3B | superannuation data and payment standards for funds and employers |
4 | accounts, audit and reporting obligations for superannuation entities |
5 | notices about complying fund status |
6 | governing rules of funds and trusts |
7 | rules applying only to regulated superannuation funds |
8 | in‑house asset rules applying to regulated superannuation funds |
9 | equal representation of employers and members in relation to employer‑sponsored funds |
10 | rules applying only to approved deposit funds |
11 | rules applying only to pooled superannuation trusts |
11A | General fees rules |
12 | statutory duties of trustees of superannuation entities |
14 | other provisions relating to funds and trusts |
15 | standards for trustees, custodians and investment managers of superannuation entities |
16 | actuaries and auditors of superannuation entities |
17 | suspension or removal of trustees of superannuation entities |
18 | amalgamation of funds |
19 | rules about dealing with superannuation interests in public offer entities |
20 | administrative directions and penalties for contraventions relating to self managed superannuation funds |
21 | civil and criminal consequences of serious breaches of the Act |
22 | infringement notices |
23 | financial assistance to funds that suffer loss as a result of fraud or theft |
24 | eligible rollover funds |
24A | transitional provisions relating to pre‑1 July 1995 automatic rollovers of benefits between funds |
24B | the administration by APRA and the Commissioner of Taxation of superannuation funds with fewer than 5 members |
25 | monitoring and investigating superannuation entities |
25A | tax file numbers |
26 | offences relating to statements and records |
27 | powers of courts |
28 | judicial and other proceedings under the Act |
29 | exemption and modification provisions |
29A | protections in relation to information |
30 | miscellaneous provisions |
32 | additional transitional provisions relating to tax file numbers |
33 | additional transitional provisions relating to MySuper |
34 | additional transitional provisions relating to eligible rollover funds |
6 General administration of Act
(1) Subject to subsections (3) and (4):
(a) APRA has the general administration of the following provisions, to the extent that administration of the provisions is not conferred on ASIC by paragraph (da) or the Commissioner of Taxation by paragraph (e), (ea), (fa), or (g):
(i) Parts 2A, 2B and 2C (other than subsection 29SAA(3) and sections 29QB and 29QC);
(ia) Part 3A;
(ib) Divisions 2 and 3 of Part 3B;
(ii) Parts 4 to 5;
(iii) section 60A;
(iv) Part 7 (other than sections 64A and 68A);
(v) Parts 8 to 11A (other than section 99F);
(vi) Part 12 (other than sections 101, 103 and 105);
(vii) Part 14 to 16;
(viii) Part 17;
(ix) Part 21;
(x) Parts 22 to 24A;
(xi) Division 3 of Part 25;
(xii) Part 25A;
(xiii) Part 32; and
(b) APRA also has the general administration of Parts 3 and 6 (other than section 60A) and section 105 to the extent that that administration is not conferred on any of the following:
(i) the Chief Executive Medicare by paragraph (ba);
(ii) ASIC by paragraph (d);
(iii) the Commissioner of Taxation by paragraph (f) or (g); and
(ba) the Chief Executive Medicare has the general administration of regulations made under Part 3 to the extent that the regulations relate to making determinations that an amount of benefits in a superannuation entity may be released on compassionate grounds; and
(c) ASIC has the general administration of:
(ia) subsection 29SAA(3) and sections 29QB and 29QC; and
(i) sections 64A and 68A; and
(iia) section 99F; and
(ii) sections 101 and 103; and
(iii) Part 19;
to the extent that administration is not conferred on the Commissioner of Taxation by paragraph (e); and
(d) ASIC also has the general administration of Parts 3 and 6 (other than section 60A) and section 105 to the extent to which they relate to:
(i) the keeping of reports to members of, or beneficiaries in, funds; or
(ii) disclosure of information to members of, or beneficiaries in, funds; or
(iii) disclosure of information about funds (including disclosure of information to ASIC but not including disclosure of information to APRA); or
(iv) any other matter prescribed by the regulations for the purposes of this paragraph; and
(da) ASIC also has the general administration of Part 16 (other than Division 2 and section 128P) to the extent that it relates to auditors of self managed superannuation funds; and
(e) the Commissioner of Taxation has the general administration of the following provisions to the extent that they relate to self managed superannuation funds:
(ia) Division 2 of Part 3B;
(i) Parts 4, 5, 7 (other than section 68A) and 8;
(ii) Part 12 (other than section 105);
(iii) Parts 13 and 14;
(iv) Part 15;
(v) Division 2 of Part 16 and section 128P;
(vi) Part 17 (other than section 140);
(vii) Parts 20, 21 and 24;
(viii) Divisions 2, 3, 4 and 5 of Part 25A; and
(ea) the Commissioner of Taxation also has the general administration of Part 16 (other than section 128N) to the extent that:
(i) it relates to self managed superannuation funds; and
(ii) that administration is not conferred on ASIC by paragraph (da); and
(f) the Commissioner of Taxation also has the general administration of Parts 3 and 6 (other than section 60A) and section 105:
(i) to the extent that they relate to self managed superannuation funds; and
(ia) to the extent that administration is not conferred on the Chief Executive Medicare by paragraph (ba); and
(ii) to the extent that administration is not conferred on ASIC by paragraph (d); and
(fa) the Commissioner of Taxation has the general administration of:
(i) Division 1 of Part 3B; and
(ii) Division 2 of Part 3B, to the extent it relates to employers; and
(iii) Division 2 of Part 3B, to the extent it relates to payments and information given to the Commissioner of Taxation; and
(iv) Division 4 of Part 3B; and
(g) the Commissioner of Taxation also has the general administration of:
(i) Division 3 of Part 3 (Portability forms); and
(ii) Division 1 of Part 25A, section 299NA, Division 3A of Part 25A and subsection 299U(2A) (about tax file numbers).
Note: An effect of a provision being administered by the Commissioner of Taxation (see paragraphs (e), (f) and (g)) is that people who acquire information under the provision are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.
(2) Powers and duties are also conferred by Parts 1, 25 (other than Division 3) and 26 27, 28, 29 (other than section 332) and 30 on:
(a) APRA for the purposes of APRA’s administration of the provisions it administers; and
(b) ASIC for the purposes of ASIC’s administration of the provisions it administers.
Note: Generally neither APRA nor ASIC are referred to in these provisions, Regulator is used instead. See the definition of Regulator in section 10.
(2AA) Despite paragraph (2)(b):
(a) powers and duties conferred on ASIC by section 255 are conferred only in relation to persons who are relevant persons in relation to superannuation entities; and
(b) powers and duties conferred on ASIC by section 256 are conferred only in relation to the affairs of superannuation entities.
(2A) Powers and duties are also conferred by Parts 1, 25 (other than Division 3), 26 to 28, 29 (other than section 332) and 30 (other than section 342) on the Commissioner of Taxation for the purposes of the administration of the provisions he or she administers.
Note: Generally, the Commissioner of Taxation is not referred to in these provisions, Regulator is used instead.
(2AB) Despite subsection (2A), powers and duties conferred on the Commissioner of Taxation by Divisions 4 to 8 of Part 25 (other than section 285) are conferred only in relation to:
(a) persons who are relevant persons in relation to superannuation entities; and
(b) the affairs of superannuation entities.
(2AC) Nothing in subsection (2AB) limits the powers and duties conferred on the Commissioner of Taxation by Part 25 (as mentioned in subsection (2A)) in relation to contributing employers.
Note: The Commissioner of Taxation’s powers and duties under Part 25 in relation to contributing employers are found in sections 255 and 256, with related provisions in Divisions 7, 8 and 9 of that Part.
(2B) Powers and duties are also conferred on APRA by section 332 for the purposes of the administration of provisions administered by APRA or by the Commissioner of Taxation.
(3) The Minister may give APRA or ASIC directions about the performance or exercise of its functions or powers under this Act.
(4) Despite subsection (1):
(a) if an entity is not a self managed superannuation fund on the last day of a year of income, APRA has (subject to any later application of this subsection) the general administration of subsections 40(1) and (2), in relation to the entity, in respect of the following:
(i) the doing of anything after the end of that year of income, in relation to that year of income;
(ii) the doing of anything after the end of that year of income, in relation to any previous year of income; and
(b) if an entity is a self managed superannuation fund on the last day of a year of income, the Commissioner of Taxation has (subject to any later application of this subsection) the general administration of subsections 40(1) and (2), in relation to the entity, in respect of the following:
(i) the doing of anything after the end of that year of income, in relation to that year of income;
(ii) the doing of anything after the end of that year of income, in relation any previous year of income; and
(c) the following rules apply in relation to the general administration of subparagraphs 42(1AA)(b)(ii) and (c)(ii), subsection 42(1AC), subparagraphs 42A(3)(c)(ii) and (d)(ii) and subsection 42A(4):
(i) subject to subparagraph (ii), APRA has the general administration of those provisions;
(ii) if another person or body is specified in regulations under subsection 19(4) in respect of a class of superannuation funds, that person or body has the general administration of those provisions to the extent that they relate to funds belonging to that class.
7 Application of Act not to be excluded or modified
This Act applies to a superannuation entity despite any provision in the governing rules of the entity, including any provision that purports to substitute, or has the effect of substituting, the provisions of the law of a State or Territory or of a foreign country for all or any of the provisions of this Act.
8 Act extends to external Territories
This Act extends to all the external Territories.
9 Crown to be bound
(1) This Act binds the Crown in all its capacities.
(2) The Crown is not liable to be prosecuted for an offence against, or arising out of, this Act.
9A Application of the Criminal Code
Chapter 2 of the Criminal Code (except Part 2.5) applies to all offences against this Act.
Division 2—Interpretation
10 Definitions
(1) In this Act, unless the contrary intention appears:
ABN has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.
accrued default amount, for a member of a regulated superannuation fund, has the meaning given by section 20B.
acquirable asset has the meaning given by section 67A.
activity fee has the meaning given by subsection 29V(7).
ADI (authorised deposit‑taking institution) means:
(a) a body corporate that is an ADI for the purposes of the Banking Act 1959; or
(b) a State bank.
administration fee has the meaning given by subsection 29V(2).
adopted child, in relation to a person, means a person adopted by the first‑mentioned person:
(a) under the law of a State or Territory relating to the adoption of children; or
(b) under the law of any other place relating to the adoption of children, if the validity of the adoption would be recognised under the law of any State or Territory.
advice fee has the meaning given by subsection 29V(8).
amend, in relation to the governing rules of a superannuation entity, includes the insertion of a provision in, or the omission of a provision from, those rules.
annuity includes a benefit provided by a life insurance company or a registered organisation, if the benefit is taken, under the regulations, to be an annuity for the purposes of this Act.
approved deposit fund means a fund that:
(a) is an indefinitely continuing fund; and
(b) is maintained by an RSE licensee that is a constitutional corporation; and
(c) is maintained solely for approved purposes.
approved form has the meaning given by section 11A.
approved guarantee has the meaning given by section 11E.
approved purposes, in relation to a fund, means:
(a) the purpose of receiving on deposit:
(i) amounts of roll‑over superannuation benefits (within the meaning of the Income Tax Assessment Act 1997); and
(ia) amounts of directed termination payments (within the meaning of section 82‑10F of the Income Tax (Transitional Provisions) Act 1997); and
(ii) amounts paid under Part 24 of this Act; and
(iii) amounts paid under section 65 of the Superannuation Guarantee (Administration) Act 1992; and
(b) the purpose of dealing with such amounts, in accordance with the rules of the fund, in any way calculated directly or indirectly to enhance the value of, or render profitable, property of the fund; and
(c) subject to any inconsistent requirement in the standards from time to time applicable to the fund under section 32, the purpose of paying to beneficiaries, or to the legal personal representatives of beneficiaries, upon request, amounts equal to the beneficiary’s interest in the fund; and
(d) such other purposes (if any) as APRA approves in writing.
approved SMSF auditor means a person who is registered under section 128B, but does not include:
(a) a person for whom an order disqualifying a person from being an approved SMSF auditor, or suspending a person’s registration as an approved SMSF auditor, is in force under section 130F; or
(b) a person who is disqualified from being or acting as an auditor of all superannuation entities under section 130D.
APRA means the Australian Prudential Regulation Authority.
APRA staff member has the same meaning as in the Australian Prudential Regulation Authority Act 1998.
ASIC means the Australian Securities and Investments Commission.
asset means any form of property and, to avoid doubt, includes money (whether Australian currency or currency of another country).
associate has the meaning given by section 12.
Australian court means:
(a) the High Court; or
(b) a court created by the Parliament; or
(c) a court of a State or Territory.
Australian resident means a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936.
authorised person means a person authorised by the Regulator under section 298A for the purposes of the provision in which the expression occurs.
beneficiary, in relation to a fund, scheme or trust, means a person (whether described in the governing rules as a member, a depositor or otherwise) who has a beneficial interest in the fund, scheme or trust and includes, in relation to a superannuation fund, a member of the fund despite the express references in this Act to members of such funds.
books includes:
(a) any record; or
(b) any accounts or accounting records, however compiled, recorded or stored; or
(c) a document.
buy‑sell spread has the meaning given by subsection 29V(4).
Chief Executive Medicare has the same meaning as in the Human Services (Medicare) Act 1973.
child, in relation to a person, includes:
(a) an adopted child, a stepchild or an ex‑nuptial child of the person; and
(b) a child of the person’s spouse; and
(c) someone who is a child of the person within the meaning of the Family Law Act 1975.
choice product: A class of beneficial interest in a regulated superannuation fund is a choice product unless:
(a) all the members of the fund who hold that class of beneficial interest in the fund are defined benefit members; or
(b) that class of beneficial interest in the fund is a MySuper product.
civil penalty order means a declaration or order made under section 196.
civil penalty provision has the meaning given by section 193.
class, in relation to an RSE licensee, means (except in subsections 29E(7) and (8)) a class of RSE licence provided for under subsection 29B(2) or (3), or under regulations made for the purposes of subsection 29B(4).
Commissioner means the Insurance and Superannuation Commissioner appointed under the Insurance and Superannuation Commissioner Act 1987, or a person for the time being acting as Insurance and Superannuation Commissioner under that Act.
connected entity, in relation to an RSE licensee of a registrable superannuation entity, means:
(a) a subsidiary of the RSE licensee (where the RSE licensee is a body corporate); and
(b) any other entity of a kind prescribed by the regulations.
constitutional corporation means a body corporate that is:
(a) a trading corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution); or
(b) a financial corporation formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution).
contributing employer means an employer having obligations under Part 3B (about the superannuation data and payment regulations and standards).
corporate trustee, in relation to a fund, scheme or trust, means a body corporate that is a trustee of the fund, scheme or trust.
Corporations Law means the Corporations Law set out in the Corporations Act 1989.
court means any court, when exercising jurisdiction under this Act.
Court means the Federal Court of Australia or the Supreme Court of a State or a Territory.
custodian, in relation to a superannuation entity, means a person (other than a trustee of the entity) who, under a contract with a trustee or an investment manager of the entity, performs custodial functions in relation to any of the assets of the entity.
data and payment regulations and standards relating to RSAs has the same meaning as in the Retirement Savings Accounts Act 1997.
data processing device means any article or material (for example, a disc) from which information is capable of being reproduced with or without the aid of any other article or device.
death benefit: see section 68AA.
deed includes an instrument having the effect of a deed.
defined benefit fund has (except in Division 3A of Part 8 and in Part 23) the meaning given by the regulations.
defined benefit member:
(a) in the definition of choice product in this subsection, section 20B and Part 2C—has the same meaning as in the Superannuation Guarantee (Administration) Act 1992; and
(b) in Division 3A of Part 8 and in Part 23—has the meaning given by section 83A; and
(c) in any other provision of this Act—has the meaning given by the regulations;
subject to subsection (1A).
dependant, in relation to a person, includes the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship.
director, in relation to a body corporate, has the same meaning as in the Corporations Act 2001.
disclose, in relation to information, means give, reveal or communicate in any way.
education direction: see subsection 160(2).
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.
eligible superannuation entity means a regulated superannuation fund or an approved deposit fund.
employee has the meaning given by section 15A.
employer has the meaning given by section 15A.
employer representative, in relation to a group of trustees of a fund, a policy committee of a fund or the board of directors of a corporate trustee of a fund, means a member of the group, committee or board, as the case may be, nominated by:
(a) the employer or employers of the members of the fund; or
(b) an organisation representing the interests of that employer or those employers.
employer‑sponsor has the meaning given by subsection 16(1).
employer‑sponsored fund has the meaning given by subsection 16(3).
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.
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.
entity means any of the following:
(a) an individual;
(b) a body corporate;
(c) a partnership;
(d) a trust.
entry fee has the meaning given by subsection 99B(2).
excluded approved deposit fund means an approved deposit fund:
(a) in which there is only one beneficiary; and
(b) that satisfies such other conditions (if any) as are specified in the regulations.
excluded instalment trust, of a superannuation fund, means a trust:
(a) that arises because a trustee or investment manager of the superannuation fund makes an investment under which a listed security (the underlying security) is held in trust until the purchase price of the underlying security is fully paid; and
(b) where the underlying security, and property derived from the underlying security, is the only trust property; and
(c) where an investment in the underlying security held in trust would not be an in‑house asset of the superannuation fund.
executive officer, in relation to a body corporate, means a person, by whatever name called and whether or not a director of the body, who is concerned, or takes part, in the management of the body.
exempt public sector superannuation scheme means a public sector superannuation scheme that is specified in regulations made for the purposes of this definition.
exit fee has the meaning given by subsection 29V(6).
expert, in relation to a matter, means a person whose profession or reputation gives authority to a statement made by him or her in relation to that matter.
fees rules, in relation to MySuper products, means the rules in Division 5 of Part 2C.
financial product has the same meaning as in Chapter 7 of the Corporations Act 2001.
financial product advice has the same meaning as in Chapter 7 of the Corporations Act 2001.
financial services licensee has the meaning given by Chapter 7 of the Corporations Act 2001.
function includes duty.
general fees rules means the rules in Part 11A.
governing rules, in relation to a fund, scheme or trust, means:
(a) any rules contained in a trust instrument, other document or legislation, or combination of them; or
(b) any unwritten rules;
governing the establishment or operation of the fund, scheme or trust.
group of individual trustees means a group of trustees each of whom is an individual trustee.
group of trustees, in relation to a fund, scheme or trust, means a board, committee or other group of trustees of the fund, scheme or trust.
half‑year means a period of 6 months ending on 30 June or 31 December.
Income Tax Assessment Act means the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.
independent director, in relation to a corporate trustee of a fund, means a director of the corporate trustee who:
(a) is not a member of the fund; and
(b) is neither an employer‑sponsor of the fund nor an associate of such an employer‑sponsor; and
(c) is neither an employee of an employer‑sponsor of the fund nor an employee of an associate of such an employer‑sponsor; and
(d) is not, in any capacity, a representative of a trade union, or other organisation, representing the interests of one or more members of the fund; and
(e) is not, in any capacity, a representative of an organisation representing the interests of one or more employer‑sponsors of the fund.
Note: Subsection (2) sets out the circumstances in which a director of a corporate trustee of a fund is not taken to be an associate of an employer‑sponsor of the fund.
independent trustee, in relation to a fund, means a trustee of the fund who:
(a) is not a member of the fund; and
(b) is neither an employer‑sponsor of the fund nor an associate of such an employer‑sponsor; and
(c) is neither an employee of an employer‑sponsor of the fund nor an employee of an associate of such an employer‑sponsor; and
(d) is not, in any capacity, a representative of a trade union, or other organisation, representing the interests of one or more members of the fund; and
(e) is not, in any capacity, a representative of an organisation representing the interests of one or more employer‑sponsors of the fund.
individual trustee, in relation to a fund, scheme or trust, means an individual who is a trustee of the fund, scheme or trust.
insolvent under administration means a person who:
(a) under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or
(b) under the law of a country other than Australia or the law of an external Territory, has the status of an undischarged bankrupt;
and includes:
(c) a person any of whose property is subject to control under:
(i) section 50 or 188 of the Bankruptcy Act 1966; or
(ii) a corresponding provision of the law of an external Territory or the law of a foreign country; or
(d) a person who has executed a personal insolvency agreement under:
(i) Part X of the Bankruptcy Act 1966; or
(ii) the corresponding provisions of the law of an external Territory or the law of a foreign country;
if a certificate has not been given under section 232 of that Act or the corresponding provision of the law of the external Territory or foreign country, as the case may be, in respect of the agreement.
inspector has the meaning given by section 265.
instalment receipt means an investment under which:
(a) a listed security is held in a trust until the purchase price of the security is fully paid; and
(b) the security, and property derived from the security, is the only trust property.
insurance fee has the meaning given by subsection 29V(9).
interdependency relationship has the meaning given by section 10A.
invest means:
(a) apply assets in any way; or
(b) make a contract;
for the purpose of gaining interest, income, profit or gain.
investment fee has the meaning given by subsection 29V(3).
investment manager means a person appointed by a trustee of a fund or trust to invest on behalf of the trustee, or the trustees, of the fund or trust.
involved, in relation to a contravention, has the meaning given by section 17.
lawyer means a duly qualified legal practitioner and, in relation to a person, means such a practitioner acting for the person.
lease arrangement means any agreement, arrangement or understanding in the nature of a lease (other than a lease) between a trustee of a superannuation fund and another person, under which the other person is to use, or control the use of, property owned by the fund, whether or not the agreement, arrangement or understanding is enforceable, or intended to be enforceable, by legal proceedings.
legal personal representative means the executor of the will or administrator of the estate of a deceased person, the trustee of the estate of a person under a legal disability or a person who holds an enduring power of attorney granted by a person.
licensing transition period means the period:
(a) starting on the commencement of Part 1 of Schedule 1 to the Superannuation Safety Amendment Act 2004; and
(b) ending immediately before the commencement of Part 2 of that Schedule.
life insurance company means:
(a) a body corporate registered under section 21 of the Life Insurance Act 1995; or
(b) a public authority:
(i) that is constituted by a law of a State or Territory; and
(ii) that carries on life insurance business within the meaning of section 11 of that Act.
listed security has the meaning given by subsection 66(5).
loan includes the provision of credit or any other form of financial accommodation, whether or not enforceable, or intended to be enforceable, by legal proceedings.
lodge means lodge with the Regulator.
market value, in relation to an asset, means the amount that a willing buyer of the asset could reasonably be expected to pay to acquire the asset from a willing seller if the following assumptions were made:
(a) that the buyer and the seller dealt with each other at arm’s length in relation to the sale;
(b) that the sale occurred after proper marketing of the asset;
(c) that the buyer and the seller acted knowledgeably and prudentially in relation to the sale.
member has a meaning affected by section 15B.
member of staff means:
(a) in relation to APRA—a person who is an APRA staff member within the meaning of the Australian Prudential Regulation Authority Act 1998; and
(b) in relation to ASIC—a person who is a staff member within the meaning of the Australian Securities and Investments Commission Act 2001; and
(c) in relation to the Commissioner of Taxation—a taxation officer.
member representative, in relation to a group of trustees of a fund, a policy committee of a fund or the board of directors of a corporate trustee of a fund, means a member of the group, committee or board, as the case may be, nominated by:
(a) the members of the fund; or
(b) a trade union, or other organisation, representing the interests of those members.
modifications includes additions, omissions and substitutions.
MySuper member: A member of a regulated superannuation fund is a MySuper member of the fund if the member holds a beneficial interest in the fund of a class that the RSE licensee of the fund is authorised to offer as a MySuper product.
MySuper product: A class of beneficial interest in a regulated superannuation fund is a MySuper product if an RSE licensee is authorised under section 29T to offer that class of beneficial interest in the fund as a MySuper product.
occurrence of an event includes the coming into existence of a state of affairs.
old‑age pensions has the same meaning as in paragraph 51(xxiii) of the Constitution.
Part 8 associate has the meaning given by Subdivision B of Division 1 of Part 8.
pension, except in the expression old‑age pension, includes a benefit provided by a fund, if the benefit is taken, under the regulations, to be a pension for the purposes of this Act.
permanent incapacity: a member of a superannuation fund or an approved deposit fund is suffering permanent incapacity if the member is taken, under the regulations, to be suffering permanent incapacity for the purposes of this Act.
permanent incapacity benefit: see section 68AA.
personal advice has the same meaning as in Chapter 7 of the Corporations Act 2001.
policy committee, in relation to a regulated superannuation fund, means a board, committee or other body that:
(a) advises a trustee of the fund about such matters as are specified in the regulations; and
(b) is established by or under the governing rules of the fund.
pooled superannuation trust means a unit trust:
(a) the trustee of which is a constitutional corporation; and
(b) that, under the regulations, is a unit trust to which this definition applies.
premises includes:
(a) a structure, building, aircraft, vehicle or vessel; and
(b) any land or place (whether enclosed or built on or not); and
(c) a part of a structure, building, aircraft, vehicle or vessel or of such a place.
private sector fund means a superannuation fund covered by paragraph (a) of the definition of superannuation fund, other than a public sector fund.
procure includes cause.
produce includes permit access to.
prudential matter has the meaning given by subsection 34C(4).
prudential standard means a standard determined by APRA under subsection 34C(1).
public offer entity means:
(a) a public offer superannuation fund; or
(b) an approved deposit fund that is not an excluded approved deposit fund; or
(c) a pooled superannuation trust.
public offer entity licence means an RSE licence of a class provided for under subsection 29B(2).
public offer superannuation fund has the meaning given by section 18.
public sector fund means a superannuation fund that is:
(a) covered by paragraph (a) of the definition of superannuation fund; and
(b) part of a public sector superannuation scheme.
public sector superannuation scheme means a scheme for the payment of superannuation, retirement or death benefits, where the scheme is established:
(a) by or under a law of the Commonwealth or of a State or Territory; or
(b) under the authority of:
(i) the Commonwealth or the government of a State or Territory; or
(ii) a municipal corporation, another local governing body or a public authority constituted by or under a law of the Commonwealth or of a State or Territory.
quarter means a period of 3 months beginning on 1 January, 1 April, 1 July and 1 October.
rectification direction: see subsection 159(2).
rectify, in relation to a contravention of this Act or the regulations that has occurred in relation to a superannuation entity, includes put in operation managerial or administrative arrangements that could reasonably be expected to ensure that there are no further contraventions of a similar kind.
redeem, in relation to an interest in an approved deposit fund, includes pay an amount equal to the interest pursuant to a covenant of a kind referred to in section 53 that is contained, or taken to be contained, in the governing rules of the fund.
registered organisation means:
(a) an association registered under a law of a State or Territory as a trade union; or
(b) a society registered under a law of a State or Territory providing for the registration of friendly or benefit societies; or
(c) an association of employees that is registered as an organisation, or recognised, under the Fair Work (Registered Organisations) Act 2009.
registrable superannuation entity means:
(a) a regulated superannuation fund; or
(b) an approved deposit fund; or
(c) a pooled superannuation trust;
but does not include a self managed superannuation fund.
regulated document, in relation to a public offer entity, means a document:
(a) issued, or authorised to be issued, by the trustee of the entity; and
(b) that the trustee knows, or ought reasonably to know (having regard to the trustee’s abilities, experience, qualifications and other attributes), may influence a person’s decision:
(i) whether to apply to have a superannuation interest in the entity issued to a person; or
(ii) whether to apply to become a standard employer‑sponsor of the entity.
regulated superannuation fund has the meaning given by section 19.
Regulator means:
(a) APRA if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by APRA; and
(b) ASIC if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by ASIC; and
(c) the Commissioner of Taxation if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by the Commissioner of Taxation; and
(d) the Chief Executive Medicare if the provision in which it occurs is, or is being applied for the purposes of, a provision that is administered by the Chief Executive Medicare under paragraph 6(1)(ba).
related, in relation to bodies corporate, has the meaning given by section 20.
related party, of a superannuation fund, means any of the following:
(a) a member of the fund;
(b) a standard employer‑sponsor of the fund;
(c) a Part 8 associate of an entity referred to in paragraph (a) or (b).
related trust, of a superannuation fund, means a trust that a member or a standard employer‑sponsor of the fund controls (within the meaning of section 70E), other than an excluded instalment trust of the fund.
relative of an individual means the following:
(a) a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the individual or of his or her spouse;
(b) a spouse of the individual or of any other individual referred to in paragraph (a).
Note: Subsection (5) may be relevant to determining relationships for the purposes of paragraph (a) of the definition of relative.
relevant person means:
(a) in relation to a fund or trust:
(i) if the trustee or an investment manager of the fund or trust is or includes an individual—that individual; or
(ii) if the trustee or an investment manager of the fund or trust is or includes a body corporate—a responsible officer of that body corporate; or
(iii) an auditor of the fund or trust; or
(iv) an actuary of the fund or trust; or
(v) a person who is a custodian in relation to the fund or trust; or
(b) in relation to an approved SMSF auditor:
(i) the approved SMSF auditor; or
(ii) a person who is a relevant person under paragraph (a) in relation to a self managed superannuation fund of which the approved SMSF auditor is or was an auditor; or
(c) in relation to an audit of a self managed superannuation fund:
(i) the person who is conducting, or conducted, the audit; or
(ii) a person who is a relevant person under paragraph (a) in relation to the self managed superannuation fund.
resident approved deposit fund has the meaning given by section 20A.
resident regulated superannuation fund means a regulated superannuation fund that is an Australian superannuation fund within the meaning of the Income Tax Assessment Act 1997.
responsible officer, in relation to a body corporate, means:
(a) a director of the body; or
(b) a secretary of the body; or
(c) an executive officer of the body.
reviewable decision means:
(a) a decision of APRA under subsection 18(6) or (7) to make a declaration; or
(aa) a decision of APRA under subsection 18(7A) to make a declaration under subsection 18(7) subject to conditions; or
(ab) a decision of APRA under subsection 18(7C) to revoke a declaration that a superannuation fund is not a public offer superannuation fund or;
(b) a decision of APRA under subsection 18(10) to revoke a declaration; or
(dd) a decision of APRA under subsection 29CA(2) to treat an application for an RSE licence as having been withdrawn; or
(de) a decision of APRA under subsection 29D(2) refusing an application for an RSE licence; or
(df) a decision of APRA under subsection 29EA(1) to impose additional conditions on an RSE licence; or
(dg) a decision of APRA under subsection 29FA(2) to treat an application for variation of an RSE licence so that it is an RSE licence of a different class as having been withdrawn; or
(dh) a decision of APRA under subsection 29FA(2) to treat an application for variation or revocation of a condition imposed on an RSE licence as having been withdrawn; or
(di) a decision of APRA to refuse to vary an RSE licence under subsection 29FC(1) so that it is an RSE licence of a different class; or
(dj) a decision of APRA to refuse to vary or revoke under subsection 29FC(1) any conditions imposed on an RSE licence; or
(dk) a decision of APRA under subsection 29FD(1) to vary or revoke any conditions imposed on an RSE licence; or
(dl) a decision of APRA under subsection 29G(1) to cancel an RSE licence; or
(dm) a decision of APRA under subsection 29M(2) refusing an application for registration of a registrable superannuation entity; or
(dn) a decision of APRA under subsection 29N(2) to cancel the registration of a registrable superannuation entity; or
(doa) a decision of APRA under subsection 29T(2) to refuse to authorise an RSE licensee to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; or
(dob) a decision of APRA under subsection 29U(1) to cancel an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; or
(doc) a decision to determine, vary or revoke a prudential standard referred to in paragraph 34C(1)(e) or (f); or
(dod) a decision of the Regulator to give or vary a direction under section 34P or 34Q; or
(dp) a decision of the Regulator refusing to give an approval under paragraph 35A(2)(b); or
(dq) a decision of the Regulator to give such an approval subject to conditions under subsection 35A(3); or
(e) a decision of the Regulator to give a notice under section 40; or
(f) a decision of the Regulator refusing to give a notice under section 40; or
(fa) a decision of the Regulator under subsection 42(1AA) or (1AC) or paragraph 50(1)(c); or
(fb) a refusal of the Regulator to give an approval under subparagraph 62(1)(b)(v); or
(g) a decision of the Regulator to give a direction under section 63; or
(h) a decision of the Regulator refusing to revoke a direction under section 63; or
(ha) a decision of the Regulator to make a determination under subsection 70A(1); or
(hb) a decision of the Regulator refusing to revoke a determination under subsection 70A(1); or
(i) a decision of the Regulator refusing to make a determination under paragraph 71(1)(e); or
(j) a decision of the Regulator to revoke a determination under paragraph 71(1)(e); or
(k) a decision of the Regulator to make a determination under subsection 71(4); or
(l) a decision of the Regulator refusing to revoke a determination under subsection 71(4); or
(m) a decision of APRA under section 92 refusing to grant an arrangement approval; or
(n) a decision of APRA under section 92 revoking an arrangement approval; or
(na) a decision of APRA under subsection 93A(2) or (3) to approve or not approve a higher percentage; or
(nb) a decision of APRA under subsection 93A(4) to specify conditions to which an approval is subject; or
(nc) a decision of APRA under subsection 93A(5) to vary an approval; or
(o) a decision of APRA under subsection 95(2) refusing to approve a borrowing; or
(p) a decision of APRA under subsection 117(6) refusing to waive a requirement; or
(q) a decision of APRA under subparagraph 123(2)(b)(ii) or (3)(c)(ii); or
(qa) a decision of the Regulator under subsection 126A(1), (2) or (3) to disqualify an individual; or
(qb) a decision of the Regulator under subsection 126A(5) refusing to revoke the disqualification of an individual; or
(r) a decision of the Regulator under subsection 126B(4) refusing to allow a longer period than 14 days to make an application for waiver; or
(ra) a decision of the Regulator under subsection 126D(3) refusing to make a declaration waiving an applicant’s status as a disqualified person; or
(rb) a decision of the Regulator under subsection 126F(3) refusing to waive, in whole or in part, the requirement to pay an amount under subsection 126F(2); or
(rc) a decision of the Regulator under section 128B refusing an application made under section 128A; or
(rd) a decision of the Regulator under section 128D imposing or varying conditions, or additional conditions, on a person’s registration as an approved SMSF auditor; or
(re) a decision of the Regulator refusing an application to vary or revoke conditions, or additional conditions, imposed under section 128D on a person’s registration as an approved SMSF auditor; or
(rf) a decision of the Regulator under subsection 128E(2) cancelling a person’s registration as an approved SMSF auditor; or
(rg) a decision of the Regulator refusing an application to waive the payment of the whole or a part of a fee under subsection 128L(4); or
(rh) a decision of the Regulator to make an order under subsection 130F(2); or
(ri) a decision of the Regulator refusing an application to revoke an order under subsection 130F(8); or
(s) a decision of the Regulator to make a disqualification order under section 131; or
(t) a decision of the Regulator refusing to revoke a disqualification order under section 131; or
(ta) a decision of APRA to give a direction under section 131AA, other than a direction on the ground mentioned in paragraph 133AA(2)(a); or
(taa) a decision of the Regulator to suspend or remove a trustee of a superannuation entity under section 133; or
(u) a decision of the Regulator under section 141; or
(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
(z) a decision of the Regulator under section 328 to make an exemption that applies to a particular person or a particular group of individual trustees; or
(zb) a decision of the Regulator under section 332 to make a declaration that applies to a particular person or a particular group of individual trustees; or
(zd) a decision of the Regulator under section 335 to vary or revoke an exemption or declaration that applies to a particular person or a particular group of individual trustees; or
(ze) a decision of APRA refusing to give a notice under subsection 342(2) in relation to a fund; or
(zf) a decision of APRA to give a notice under subsection 342(6) in relation to a fund; or
(zg) a decision of the Regulator under subsection 347A(9).
RSA has the same meaning as in the Retirement Savings Accounts Act 1997.
RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997.
RSE actuary means a person who is appointed as an actuary of a registrable superannuation entity.
RSE auditor means a person who is appointed as an auditor of a registrable superannuation entity.
RSE licence means a licence granted under section 29D.
RSE licensee means a constitutional corporation, body corporate, or group of individual trustees, that holds an RSE licence granted under section 29D.
RSE licensee law means:
(a) this Act or the regulations; and
(aa) prudential standards; and
(b) the Financial Sector (Collection of Data) Act 2001; and
(c) the Financial Institutions Supervisory Levies Collection Act 1998; and
(d) the provisions of the Corporations Act 2001 listed in a subparagraph of paragraph (b) of the definition of regulatory provision in section 38A of this Act or specified in regulations made for the purposes of subparagraph (b)(xvi) of that definition, as applying in relation to superannuation interests; and
(e) any other provisions of any other law of the Commonwealth specified in regulations made for the purposes of this paragraph.
salary or wages has the same meaning as in the Superannuation Guarantee (Administration) Act 1992.
self managed superannuation fund has the meaning given by sections 17A and 17B.
Note: Subsection (4) of this section extends the meaning of self managed superannuation fund for the purposes of sections 6, 42 and 42A.
signed, in relation to a body corporate, means executed by or on behalf of the body corporate in a way that is effective in law and that binds the body corporate.
SMSF actuary means a person who is a Fellow or an Accredited Member of the Institute of Actuaries of Australia.
SMSF auditor number, of an approved SMSF auditor, means the number stated under paragraph 128B(6)(b) in a certificate under subsection 128B(6) relating to the auditor’s registration under section 128B.
spouse of a person includes:
(a) another person (whether of the same sex or a different sex) with whom the person is in a relationship that is registered under a law of a State or Territory prescribed for the purposes of section 2E of the Acts Interpretation Act 1901 as a kind of relationship prescribed for the purposes of that section; and
(b) another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple.
standard employer‑sponsor has the meaning given by subsection 16(2).
standard employer‑sponsored fund has the meaning given by subsection 16(4).
standard employer‑sponsored member has the meaning given by subsection 16(5).
subsidiary has the same meaning as in the Corporations Act 2001.
superannuation account has the meaning given by subsection 108A(3).
superannuation actuary means:
(a) an RSE actuary; or
(b) an SMSF actuary.
superannuation auditor means:
(a) an RSE auditor; or
(b) an approved SMSF auditor.
Superannuation Complaints Tribunal means the Superannuation Complaints Tribunal established by the Superannuation (Resolution of Complaints) Act 1993.
superannuation data and payment matter has the meaning given by subsection 34K(5).
superannuation data and payment regulations and standards means:
(a) the regulations made under section 34K; and
(b) the standards issued by the Commissioner of Taxation under that section.
superannuation data and payment standard means a standard issued by the Commissioner of Taxation under section 34K.
superannuation entity means:
(a) a regulated superannuation fund; or
(b) an approved deposit fund; or
(c) a pooled superannuation trust.
superannuation entity affected by a reviewable decision, in relation to a reviewable decision, means the superannuation entity in relation to which the decision was made.
superannuation entity director has the meaning given by subsection 29VO(3).
superannuation fund means:
(a) a fund that:
(i) is an indefinitely continuing fund; and
(ii) is a provident, benefit, superannuation or retirement fund; or
(b) a public sector superannuation scheme.
superannuation interest means a beneficial interest in a superannuation entity.
suspended SMSF auditor means a person for whom an order suspending a person’s registration as an approved SMSF auditor is in force under section 130F.
switching fee has the meaning given by subsection 29V(5).
taxation officer means:
(a) a Second Commissioner of Taxation; or
(b) a Deputy Commissioner of Taxation; or
(c) a person engaged under the Public Service Act 1999, or an officer or employee of an authority of the Commonwealth, performing duties in the Australian Taxation Office; or
(d) a person engaged to provide services relating to the Australian Taxation Office.
trustee, in relation to a fund, scheme or trust, means:
(a) if there is a trustee (within the ordinary meaning of that expression) of the fund, scheme or trust—the trustee; or
(b) in any other case—the person who manages the fund, scheme or trust.
unit trust means:
(a) a unit trust within the meaning of Division 6C of Part III of the Income Tax Assessment Act 1936 (whether established by a law of the Commonwealth or of a State or Territory, by a government agency or otherwise); or
(b) the trustee of such a trust;
as appropriate.
value means market value, and includes amount.
year of income, in relation to a fund, scheme or trust, means a period that is, for the purposes of the Income Tax Assessment Act, a year of income of the fund scheme, or trust (subsection 6(2A) of that Act applies accordingly).
(1A) The regulations may prescribe:
(a) circumstances in which a member of a superannuation fund is not a defined benefit member for the purposes of this Act, or a provision of this Act; and
(b) circumstances in which a member of a superannuation fund who is not otherwise a defined benefit member for the purposes of this Act, or a provision of this Act, is to be taken to be a defined benefit member for the purposes of this Act, or that provision.
(2) For the purposes of paragraph (b) of the definition of independent director in subsection (1), a director of a corporate trustee of a fund that is also an employer‑sponsor of the fund is not taken to be an associate of that employer‑sponsor by reason only of being such a director.
(3) Without limiting the meaning of the expression member in this Act, that expression, in relation to a self managed superannuation fund, includes a person:
(a) who receives a pension from the fund; or
(b) who has deferred his or her entitlement to receive a benefit from the fund.
(4) Treat an entity that is a superannuation fund as a self managed superannuation fund for the purposes of sections 6, 42 and 42A, and Part 20, if:
(a) it has ceased being a self managed superannuation fund for the purposes of the rest of this Act; and
(b) the trustee of the fund is not an RSE licensee.
(5) For the purposes of paragraph (a) of the definition of relative in subsection (1), if one individual is the child of another individual because of the definition of child in subsection (1), relationships traced to, from or through the individual are to be determined in the same way as if the individual were the natural child of the other individual.
10A Interdependency relationship
(1) Subject to subsection (3), for the purposes of this Act, 2 persons (whether or not related by family) have an interdependency relationship if:
(a) they have a close personal relationship; and
(b) they live together; and
(c) one or each of them provides the other with financial support; and
(d) one or each of them provides the other with domestic support and personal care.
(2) Subject to subsection (3), for the purposes of this Act, if:
(a) 2 persons (whether or not related by family) satisfy the requirement of paragraph (1)(a); and
(b) they do not satisfy the other requirements of an interdependency relationship under subsection (1); and
(c) the reason they do not satisfy the other requirements is that either or both of them suffer from a physical, intellectual or psychiatric disability;
they have an interdependency relationship.
(3) The regulations may specify:
(a) matters that are, or are not, to be taken into account in determining under subsection (1) or (2) whether 2 persons have an interdependency relationship; and
(b) circumstances in which 2 persons have, or do not have, an interdependency relationship.
11 Approvals, determinations etc. by Regulator
If:
(a) a provision of this Act refers to an approval given, determination made or other act or thing done by the Regulator; and
(b) there is no other provision of this Act expressly authorising the Regulator to give the approval, make the determination or do the act or thing;
the Regulator is authorised to give the approval, make the determination or do the act or thing.
11A Approved forms
(1) In this Act, a reference to an approved form is a reference to a form approved by the Regulator, in writing, for the purposes of the provision in which the expression appears.
(2) An approved form may require particular information to be included in the completed form.
(3) An approved form may do either or both of the following:
(a) require or permit the form to be attached to, or to form part of, another document;
(b) require or permit the form to be given on a specified kind of data processing device or by specified electronic transmission, in accordance with specified software or other requirements.
(4) An approved form may require the form to be signed by a particular person or persons. This applies whether or not a provision of this Act also requires the form to be signed.
(5) An approved form may make different requirements to be complied with according to whether or not the form is given in a way that is required or permitted as mentioned in paragraph (3)(b).
(6) If an approved form makes a requirement as mentioned in subsection (2), (3) or (4), a purported use of the form is not effective for the purposes of this Act unless the requirement has been complied with.
11B Electronic lodgment of approved forms
(1) If a person gives the Regulator an approved form in a way that is required or permitted as mentioned in paragraph 11A(3)(b):
(a) the form is taken to constitute a written notice; and
(b) if the form includes the electronic signature of a person—the form is taken to be signed by that person.
(2) The person’s electronic signature is a unique identification, in an electronic form, that is approved by the Regulator for use by the person.
(3) A person is guilty of an offence if:
(a) the person gives the Regulator an approved form in a way that is required or permitted as mentioned in paragraph 11A(3)(b); and
(b) either:
(i) the form purports to be given by another person; or
(ii) the form purports to be given on behalf of another person, and that other person has not consented to the giving of the form.
Penalty: 50 penalty units.
(4) A person is guilty of an offence if:
(a) the person gives the Regulator an approved form in a way that is required or permitted as mentioned in paragraph 11A(3)(b); and
(b) the form includes the electronic signature of another person who has not consented to the inclusion of the signature.
Penalty: 50 penalty units.
(5) Subsections (3) and (4) are offences of strict liability within the meaning of section 6.1 of the Criminal Code.
11C Declaration required if approved form lodged electronically on trustee’s behalf
(1) This section applies if:
(a) the Regulator is given an approved form in a way that is required or permitted as mentioned in paragraph 11A(3)(b); and
(b) the form is given to the Regulator by a person on behalf of the trustee, or one or more of the trustees, of a superannuation entity.
In this section, the trustee, or each of the trustees, on whose behalf the form is given is referred to as the responsible trustee.
(2) The responsible trustee is guilty of an offence if the responsible trustee does not, before the form is given to the Regulator, make a signed declaration that states that:
(a) the person is authorised to give the form to the Regulator on the responsible trustee’s behalf; and
(b) the information in the form is correct.
Penalty: 50 penalty units.
(3) The responsible trustee is guilty of an offence if the responsible trustee does not retain the declaration for 5 years after it is made.
Penalty: 50 penalty units.
(4) The responsible trustee is guilty of an offence if:
(a) within the 5 year period, the Regulator requests the responsible trustee to produce the declaration to the Regulator; and
(b) the responsible trustee does not comply with the request.
Penalty: 50 penalty units.
(5) Subsections (2), (3) and (4) are offences of strict liability within the meaning of section 6.1 of the Criminal Code.
11D Electronic lodgment—documents other than approved forms
(1) A document that is not required to be lodged in an approved form may be lodged with the Regulator electronically only if:
(a) the Regulator and the person seeking to lodge it (either on the person’s own behalf or on another person’s behalf) have agreed, in writing, that it may be lodged electronically; or
(b) the Regulator has approved, in writing, the electronic lodgment of documents of that kind.
(2) The document is taken to be lodged with the Regulator if it is lodged in accordance with the agreement or approval (including any requirements of the agreement or approval as to authentication).
11E Approved guarantees
In this Act, an approved guarantee is:
(a) a guarantee given by an ADI; or
(b) a guarantee given by or on behalf of the Commonwealth, a State or a Territory;
that meets the requirements that APRA, by legislative instrument, determines.
12 Associates
(1) The question whether a person is an associate of another person for the purposes of this Act is to be determined in the same way as that question would be determined under the Corporations Act 2001 if the assumptions set out in subsection (2) were made.
(2) The assumptions are as follows:
(a) that sections 12 and 14 and paragraphs 15(1)(b) and 16(1)(b) and (c) of that Act had not been enacted;
(b) that section 13 of that Act were not limited to Chapter 7, but extended to all provisions of that Act.
13 Single trustees
For the purposes of this Act:
(a) a fund, scheme or trust has a single corporate trustee if, and only if, there is only one trustee of the fund, scheme or trust and that trustee is a corporate trustee; and
(b) a fund, scheme or trust has a single individual trustee if, and only if, there is only one trustee of the fund, scheme or trust and that trustee is an individual trustee.
13A RSE licensees that are groups of individual trustees
(1) Subject to this section, for the purposes of this Act, the regulations and the prudential standards, a change in the composition of a group of individual trustees that is an RSE licensee does not affect the continuity of the group of individual trustees for the duration of the period during which the RSE licence continues in force.
Note: So, for example, an RSE licence granted to a group of individual trustees will not cease to continue in force, merely because of a change in the membership of the group.
(2) An obligation that would be imposed on an RSE licensee that is a group of individual trustees of a registrable superannuation entity by a provision of this Act, the regulations or the prudential standards is imposed instead on each of the trustees but, subject to the entity’s governing rules, may be discharged by any of them.
(3) A person who is a member of a group of individual trustees that is an RSE licensee is not liable under any offence of strict liability or civil penalty provision of this Act or the regulations in respect of any breach of a provision of this Act or the regulations, or failure, by the RSE licensee if the person proves that he or she:
(a) made all inquiries (if any) that were reasonable in the circumstances; and
(b) after doing so, believed on reasonable grounds that the obligations of the RSE licensee were being complied with.
Note: In a prosecution for an offence of strict liability against a provision of this Act or the regulations, a defendant bears a legal burden in relation to the matters in subsection (3) (see section 13.4 of the Criminal Code).
(4) If a group of individual trustees is an RSE licensee, a direction, notice or other document is taken, for the purposes of a provision of this Act, the regulations or the prudential standards, to be given to the RSE licensee if it is given it to any member of the group.
(5) If a group of individual trustees of a registrable superannuation entity is an RSE licensee, a request is taken, for the purposes of a provision of this Act, the regulations or the prudential standards, to have been made to the RSE licensee if it is made to any member of the group and, subject to the entity’s governing rules, may be dealt with by any member of the group.
(6) Any requirement under this Act, the regulations or the prudential standards that a document be signed by an RSE licensee is taken, if the RSE licensee is a group of individual trustees, to be a requirement that the document be signed by each of the members of the group.
(7) An RSE licensee that is a group of individual trustees is taken, for the purposes of a provision of this Act, the regulations or the prudential standards, to have provided something to a person if one of the members of the group has provided that thing to the person.
(8) For the purposes of this Act and the regulations, if an RSE licensee that is a group of individual trustees is affected by a reviewable decision, each member of the group is taken to be affected by that decision.
(9) The regulations may exclude or modify the effect of the subsections of this section (other than subsections (2) and (3)) in relation to specified provisions.
(10) This section has effect subject to a contrary intention in a provision of this Act or regulations made for the purposes of subsection (9).
14 Indefinitely continuing fund—application of rules against perpetuities
If the governing rules of a fund contain a provision the purpose of which is to avoid a breach of a rule of law relating to perpetuities, that provision does not prevent the fund from being treated as an indefinitely continuing fund for the purposes of the definition of approved deposit fund or superannuation fund in section 10.
15 Approved deposit funds—payments by trustees
(1) For the purposes of paragraph (c) of the definition of approved purposes in section 10 and for the purposes of section 53, if:
(a) a beneficiary has an interest in a fund; and
(b) on the request of the beneficiary, an amount equal to the beneficiary’s interest is paid by the fund:
(i) to a life insurance company or registered organisation for the purchase of an annuity in the name of the beneficiary; or
(ii) into an RSA specified by the beneficiary;
the trustee of the fund is taken to have paid the amount to the beneficiary on request.
(1A) For the purposes of paragraph (c) of the definition of approved purposes in section 10 and for the purposes of section 53, if:
(a) a beneficiary has an interest in a fund; and
(b) on the request of the beneficiary, an amount equal to the beneficiary’s interest is paid by the fund to:
(i) an approved deposit fund; or
(ii) a regulated superannuation fund;
the trustee of the first‑mentioned fund is taken to have paid the amount to the beneficiary on request.
(1B) For the purposes of paragraph (c) of the definition of approved purposes in section 10, if a payment is not made immediately on request but is deferred for a period determined by the trustee concerned, the payment is taken to have been made on request.
(2) A reference in subsection (1) or (1A) to a beneficiary includes a reference to the legal personal representative of a beneficiary.
15A Definitions of employee and employer
(1) Subject to this section, in this Act, employee and employer have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (10):
(a) expand the meaning of those terms; and
(b) make particular provision to avoid doubt as to the status of certain persons.
(2) A person who is entitled to payment for the performance of duties as a member of the executive body (whether described as the board of directors or otherwise) of a body corporate is, in relation to those duties, an employee of the body corporate.
(3) If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.
(4) A member of the Parliament of the Commonwealth is an employee of the Commonwealth.
(5) A member of the Parliament of a State is an employee of the State.
(6) A member of the Legislative Assembly for the Australian Capital Territory is an employee of the Australian Capital Territory.
(7) A member of the Legislative Assembly of the Northern Territory is an employee of the Northern Territory.
(8) For the purposes of this Act:
(a) a person who is paid to perform or present, or to participate in the performance or presentation of, any music, play, dance, entertainment, sport, display or promotional activity or any similar activity involving the exercise of intellectual, artistic, musical, physical or other personal skills is an employee of the person liable to make the payment; and
(b) a person who is paid to provide services in connection with an activity referred to in paragraph (a) is an employee of the person liable to make the payment; and
(c) a person who is paid to perform services in, or in connection with, the making of any film, tape or disc or of any television or radio broadcast is an employee of the person liable to make the payment.
(9) Subject to subsection (10), a person who:
(a) holds, or performs the duties of, an appointment, office or position under the Constitution or under a law of the Commonwealth, of a State or of a Territory; or
(b) is otherwise in the service of the Commonwealth, of a State or of a Territory (including service as a member of the Defence Force or as a member of a police force);
is an employee of the Commonwealth, the State or the Territory, as the case requires.
(10) A person who holds office as a member of a local government council is an employee of the council.
15B Modified meaning of member
(1) The regulations may provide that a person is to be treated, or is not to be treated, as being a member of a superannuation fund for the purposes of this Act or specified provisions of this Act.
(2) This Act applies with such modifications (if any) as are prescribed in relation to a person who is a member of a superannuation fund because of regulations made for the purposes of this section.
16 Definitions associated with employer‑sponsorship
Employer‑sponsor
(1) An employer‑sponsor of a regulated superannuation fund is an employer who:
(a) contributes to the fund; or
(b) would, apart from a temporary cessation of contributions, contribute to the fund;
for the benefit of:
(c) a member of the fund who is an employee of:
(i) the employer; or
(ii) an associate of the employer; or
(d) the dependants of such a member in the event of the death of the member.
Standard employer‑sponsor
(2) If an employer so contributes, or would contribute, wholly or partly pursuant to an arrangement between the employer and a trustee of the regulated superannuation fund concerned, the employer is a standard employer‑sponsor of the fund (as well as being an employer‑sponsor of the fund). If the employer only so contributes, or would contribute, pursuant to arrangements between the employer and a member or members of the fund, the employer is not a standard employer‑sponsor.
Employer‑sponsored fund
(3) An employer‑sponsored fund is a regulated superannuation fund that has at least one employer‑sponsor.
Standard employer‑sponsored fund
(4) If a regulated superannuation fund has at least one standard employer‑sponsor, the fund is a standard employer‑sponsored fund (as well as being an employer‑sponsored fund).
Standard employer‑sponsored member
(5) A standard employer‑sponsored member is a member of a regulated superannuation fund in respect of whom an employer‑sponsor contributes, or would contribute, as mentioned in subsection (1) wholly or partly pursuant to an arrangement between the employer‑sponsor and a trustee of the fund.
17A Definition of self managed superannuation fund
Basic conditions—funds other than single member funds
(1) Subject to this section, a superannuation fund, other than a fund with only one member, is a self managed superannuation fund if and only if it satisfies the following conditions:
(a) it has fewer than 5 members;
(b) if the trustees of the fund are individuals—each individual trustee of the fund is a member of the fund;
(c) if the trustee of the fund is a body corporate—each director of the body corporate is a member of the fund;
(d) each member of the fund:
(i) is a trustee of the fund; or
(ii) if the trustee of the fund is a body corporate—is a director of the body corporate;
(e) no member of the fund is an employee of another member of the fund, unless the members concerned are relatives;
(f) no trustee of the fund receives any remuneration from the fund or from any person for any duties or services performed by the trustee in relation to the fund;
(g) if the trustee of the fund is a body corporate—no director of the body corporate receives any remuneration from the fund or from any person (including the body corporate) for any duties or services performed by the director in relation to the fund.
Note: Section 17B contains exceptions to paragraphs (1)(f) and (g).
Basic conditions—single member funds
(2) Subject to this section, a superannuation fund with only one member is a self managed superannuation fund if and only if:
(a) if the trustee of the fund is a body corporate:
(i) the member is the sole director of the body corporate; or
(ii) the member is one of only 2 directors of the body corporate, and the member and the other director are relatives; or
(iii) the member is one of only 2 directors of the body corporate, and the member is not an employee of the other director; and
(b) if the trustees of the fund are individuals:
(i) the member is one of only 2 trustees, of whom one is the member and the other is a relative of the member; or
(ii) the member is one of only 2 trustees, and the member is not an employee of the other trustee; and
(c) no trustee of the fund receives any remuneration from the fund or from any person for any duties or services performed by the trustee in relation to the fund;
(d) if the trustee of the fund is a body corporate—no director of the body corporate receives any remuneration from the fund or from any person (including the body corporate) for any duties or services performed by the director in relation to the fund.
Note: Section 17B contains exceptions to paragraphs (2)(c) and (d).
Certain other persons may be trustees
(3) A superannuation fund does not fail to satisfy the conditions specified in subsection (1) or (2) by reason only that:
(a) a member of the fund has died and the legal personal representative of the member is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during the period:
(i) beginning when the member of the fund died; and
(ii) ending when death benefits commence to be payable in respect of the member of the fund; or
(b) the legal personal representative of a member of the fund is a trustee of the fund or a director of a body corporate that is the trustee of the fund, in place of the member, during any period when:
(i) the member of the fund is under a legal disability; or
(ii) the legal personal representative has an enduring power of attorney in respect of the member of the fund; or
(c) if a member of the fund is under a legal disability because of age and does not have a legal personal representative:
(i) the parent or guardian of the member is a trustee of the fund in place of the member; or
(ii) if the trustee of the fund is a body corporate—the parent or guardian of the member is a director of the body corporate in place of the member; or
(d) an appointment under section 134 of an acting trustee of the fund is in force.
Circumstances in which entity that does not satisfy basic conditions remains a self managed superannuation fund
(4) Subject to subsection (5), if a superannuation fund that is a self managed superannuation fund would, apart from this subsection, cease to be a self managed superannuation fund, it does not so cease until the earlier of the following times:
(a) the time an RSE licensee of the fund is appointed;
(b) 6 months after it would so cease to be a self managed superannuation fund.
Subsection (4) does not apply if admission of new members
(5) Subsection (4) does not, except for the purposes of section 29J, apply if the reason, or one of the reasons, why the superannuation fund would cease to be a self managed superannuation fund was the admission of one or more new members to the fund.
Extended meaning of employee in certain circumstances
(6) For the purposes of this section, a member of a fund, who is an employee of an employer‑sponsor of the fund, is also taken to be an employee of another person (the other person), if the employer‑sponsor is:
(a) a relative of the other person; or
(b) either of the following:
(i) a body corporate of which the other person, or a relative of the other person, is a director;
(ii) a body corporate related to that body corporate; or
(c) a trustee of a trust of which the other person, or a relative of the other person, is a beneficiary; or
(d) a partnership, where:
(i) the other person, or a relative of the other person, is a partner in the partnership; or
(ii) the other person, or a relative of the other person, is a director of a body corporate that is a partner in the partnership; or
(iii) the other person, or a relative of the other person, is a beneficiary of a trust, if a trustee of the trust is a partner in the partnership.
Note 1: An effect of this subsection is that a fund will not be a self managed superannuation fund if a member is employed by an employer‑sponsor of the fund, and another member (who is not a relative) has a specified interest in that employer‑sponsor: see paragraph (1)(e). An example of this would be where the employer‑sponsor is a company of which another member is a director.
Note 2: Another effect is that a fund will not be a self managed superannuation fund if its single member is employed by an employer‑sponsor of the fund in which the other trustee of the fund (who is not a relative) has a specified interest: see subsection (2).
(7) Subsection (6) does not limit the meaning of the term employee.
Regulations
(8) For the purposes of this section:
(a) a member of a fund is taken to be an employee of a person belonging to a class specified in the regulations for the purposes of this paragraph; and
(b) despite subsections (6) and (7) and section 15A, a member of a fund is not taken to be an employee of a person belonging to a class specified in the regulations for the purposes of this paragraph.
Meaning of relative
(9) In this section:
relative, in relation to an individual, means:
(a) a parent, child, grandparent, grandchild, sibling, aunt, uncle, great‑aunt, great‑uncle, niece, nephew, first cousin or second cousin of the individual or of his or her spouse or former spouse; or
(b) a spouse or former spouse of the individual, or of an individual referred to in paragraph (a).
(9A) For the purposes of paragraph (a) of the definition of relative in subsection (9), if one individual is the child of another individual because of the definition of child in subsection 10(1), relationships traced to, from or through the individual are to be determined in the same way as if the individual were the natural child of the other individual.
Disqualified persons
(10) For the avoidance of doubt, subsection (3) does not permit a person, in the capacity of legal personal representative of a disqualified person (within the meaning of section 120), to be a trustee of a self managed superannuation fund or a director of a body corporate that is a trustee of a self managed superannuation fund.
17B Definition of self managed superannuation fund—remuneration of trustees etc.
(1) Paragraphs 17A(1)(f) and (2)(c) do not apply to remuneration for any duties or services performed by a trustee of a fund, if:
(a) the trustee performs the duties or services other than in the capacity of trustee; and
(b) the trustee is appropriately qualified, and holds all necessary licences, to perform the duties or services; and
(c) the trustee performs the duties or services in the ordinary course of a business, carried on by the trustee, of performing similar duties or services for the public; and
(d) the remuneration is no more favourable to the trustee than that which it is reasonable to expect would apply if the trustee were dealing with the relevant other party at arm’s length in the same circumstances.
(2) Paragraphs 17A(1)(g) and (2)(d) do not apply to remuneration for any duties or services performed by a director of a body corporate that is a trustee of a fund, if:
(a) the director performs the duties or services other than:
(i) in the capacity of director; and
(ii) in connection with the body corporate’s capacity of trustee; and
(b) the director is appropriately qualified, and holds all necessary licences, to perform the duties or services; and
(c) the director performs the duties or services in the ordinary course of a business, carried on by the director, of performing similar duties or services for the public; and
(d) the remuneration is no more favourable to the director than that which it is reasonable to expect would apply if the director were dealing with the relevant other party at arm’s length in the same circumstances.
18 Public offer superannuation fund
Definition
(1) A superannuation fund is a public offer superannuation fund if:
(a) one of the following subparagraphs applies to the fund:
(i) it is a regulated superannuation fund that is not a standard employer‑sponsored fund;
(ii) it is a standard employer‑sponsored fund that has at least one member:
(A) who is not a standard employer‑sponsored member; and
(B) who is not a member of a prescribed class;
(iii) it is a standard employer‑sponsored fund in relation to which an election under subsection (2) has been made;
(iv) a declaration under subsection (6) (which allows for funds to be declared to be public offer superannuation funds) is in force in relation to the fund; and
(aa) the fund is not a self managed superannuation fund; and
(b) no declaration under subsection (7) (which allows for funds to be declared not to be public offer superannuation funds) is in force in relation to the fund.
Election to be a public offer superannuation fund
(2) The trustee of a standard employer‑sponsored fund may elect that the fund is to be treated as a public offer superannuation fund.
How an election is made
(3) An election must be made by giving APRA a written notice that is:
(a) in the approved form; and
(b) signed by the trustee.
Trustee has power to make election despite anything in the governing rules
(4) The trustee has the power to make an election despite anything in the governing rules of the fund.
Election is irrevocable
(5) An election is irrevocable.
Declaration that fund is a public offer superannuation fund
(6) APRA may, in writing, declare a superannuation fund to be a public offer superannuation fund.
Declaration that fund is not a public offer superannuation fund
(7) APRA may, in writing, declare a superannuation fund not to be a public offer superannuation fund.
(7A) A declaration that a superannuation fund is not a public offer superannuation fund may be subject to conditions.
(7B) If a condition has been breached the trustee must immediately notify APRA, in writing, of the breach.
Penalty: 30 penalty units.
(7BA) Subsection (7B) is an offence of strict liability.
Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Note 2: For strict liability, see section 6.1 of the Criminal Code.
(7C) If APRA is satisfied, whether because of a notification under subsection (7B) or otherwise, that a condition to which the declaration is subject has been breached:
(a) APRA may revoke the declaration; and
(b) the superannuation fund is taken, with effect from the revocation, to have become a public offer superannuation fund.
Commencement of declaration
(8) A declaration comes into force when it is made, or, if a later time is specified in the declaration as the time when it comes into force, it comes into force at that later time.
Cessation of declaration
(9) A declaration remains in force:
(a) if a time is specified in the declaration as the time when it stops being in force—until that time, or until the declaration is revoked, whichever occurs first; or
(b) otherwise—until the declaration is revoked.
Revocation of declaration
(10) APRA may, in writing, revoke a declaration.
APRA must have regard to guidelines when making or revoking a declaration
(11) When making or revoking a declaration, APRA must have regard to any written guidelines determined by APRA under this subsection.
Copy of declaration or revocation to be given to trustee
(12) As soon as practicable after making or revoking a declaration, APRA must give the trustee of the superannuation fund concerned a copy of the instrument making or revoking the declaration.
19 Regulated superannuation fund
Definition
(1) A regulated superannuation fund is a superannuation fund in respect of which subsections (2) to (4) have been complied with.
Fund must have a trustee
(2) The superannuation fund must have a trustee.
Trustee must be a constitutional corporation or fund must be a pension fund
(3) Either of the following must apply:
(a) the trustee of the fund must be a constitutional corporation pursuant to a requirement contained in the governing rules;
(b) the governing rules must provide that the sole or primary purpose of the fund is the provision of old‑age pensions.
Election by trustee
(4) The trustee or trustees must have given to APRA, or such other body or person as is specified in the regulations, a written notice that is:
(a) in the approved form; and
(b) signed by the trustee or each trustee;
electing that this Act is to apply in relation to the fund.
Note: The approved form of written notice may require the trustee or the trustees to set out the tax file number of the fund. See subsection 299U(1).
Regulations
(4A) Without limiting subsection (4), regulations for the purposes of that subsection may specify that notices are to be given to different persons or bodies in respect of different classes of superannuation funds.
Election is irrevocable
(5) An election made as mentioned in subsection (4) is irrevocable.
Trustee has power to make election despite anything in the governing rules etc.
(6) The trustee or trustees have the power to make an election as mentioned in subsection (4) despite anything in the governing rules of the fund.
Certain funds must become regulated superannuation funds
(7) If all of the following conditions are satisfied in relation to a superannuation fund at any time during the period beginning on the day on which this Act received the Royal Assent and ending at the end of the fund’s 1993‑94 year of income:
(a) the fund has a trustee;
(b) either:
(i) the trustee of the fund is a constitutional corporation; or
(ii) the governing rules of the fund provide that the sole or primary purpose of the fund is the provision of old‑age pensions;
(c) the fund is not a public sector superannuation scheme;
(d) there is in force a notice under section 12 or 13 of the Occupational Superannuation Standards Act 1987 stating that the Commissioner is satisfied that the fund satisfied, or should be treated as if it had satisfied, the superannuation fund conditions in relation to a particular year of income;
(e) there is not in force a notice under section 12 or 13 of the Occupational Superannuation Standards Act 1987 stating that the Commissioner is not satisfied that the fund satisfied the superannuation fund conditions in relation to a year of income later than the year of income mentioned in paragraph (d);
the trustee of the fund must use its best endeavours to ensure that the fund becomes a regulated superannuation fund at or before the beginning of the fund’s 1994‑95 year of income.
Contravention of subsection (7) is not an offence
(8) A contravention of subsection (7) is not an offence. However, a contravention of subsection (7) is a ground for the grant of an injunction under section 315.
References to repealed provisions of OSSA
(9) A reference in this section to a provision of the Occupational Superannuation Standards Act 1987 includes a reference to the provision as it continues to apply, despite its repeal, because of the Occupational Superannuation Standards Amendment Act 1993.
20 Related bodies corporate
The question whether bodies corporate are related to each other for the purposes of this Act is to be determined in the same way as that question would be determined under the Corporations Act 2001.
20A Resident approved deposit funds
Resident approved deposit funds
(1) For the purposes of this Act, an approved deposit fund is a resident approved deposit fund at a particular time if, and only if:
(a) either:
(i) the fund was established in Australia; or
(ii) at that time, any asset of the fund is situated in Australia; and
(b) at that time, the central management and control of the fund is in Australia; and
(c) at that time, the percentage worked out using the following formula is not less than 50%:
where:
Accumulated entitlements of resident members means the sum of so much of the value of the assets of the fund at that time as is attributable to:
(i) deposits made to the fund before that time by or in respect of members of the fund who are residents at that time; and
(ii) income or accretions arising from those deposits.
Total assets of fund means the value of the assets of the fund at that time.
Definitions
(2) In this section:
Australia has the same meaning as in the Income Tax Assessment Act 1936.
member includes depositor.
resident has the same meaning as in the Income Tax Assessment Act 1936.
20B Accrued default amounts
(1) Subject to this section, the total amount attributed by the trustee, or the trustees, of a regulated superannuation fund to a member of the fund is an accrued default amount for the member if subsection (1A) or (1B) is satisfied.
(1A) This subsection is satisfied if the member has given the trustee, or the trustees, of the fund no direction on the investment option under which the asset (or assets) of the fund attributed to the member in relation to the amount (the member’s underlying asset(s)) is to be invested.
(1B) This subsection is satisfied if the investment option under which the asset (or assets) of the fund attributed to the member in relation to the amount (the member’s underlying asset(s)) is invested is one which, under the current governing rules of the fund, would be the investment option for a new member if no direction were given.
(2) Such an amount is not an accrued default amount to the extent that the amount is attributed to the member in relation to a MySuper product.
(3) Such an amount is not an accrued default amount:
(a) if the member is a defined benefit member of the fund; or
(b) if the fund is an eligible rollover fund; or
(c) to the extent that the member’s underlying asset(s) is invested in one or more of the following:
(i) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested;
(ii) a life policy under which the benefit to the member (or a relative or dependant of the member) is based only on the realisation of a risk, not the performance of an investment;
(iii) an investment account contract the only beneficiaries of which are the member, and relatives and dependants of the member;
(iv) an investment option under which the investment is held as cash; or
(d) to the extent that a pension is payable out of the member’s underlying asset(s), because the member has satisfied a condition of release of benefits specified in a standard made under paragraph 31(2)(h).
(3A) For the purposes of subsection (1A), if:
(a) benefits of a person in a regulated superannuation fund (the earlier fund) are transferred to another regulated superannuation fund (the later fund); and
(b) the person gave or (because of a previous application of this subsection) is taken to have given the trustee, or the trustees, of the earlier fund a direction on the investment option under which an asset (or assets) of the earlier fund is to be invested; and
(c) an amount attributable to the person is invested under an equivalent investment option offered by the later fund (the equivalent investment option);
the person is taken to have given the trustee, or the trustees, of the later fund a direction to invest in the equivalent investment option any asset (or assets) of the later fund that is attributed to the person in relation to an amount attributed to the person.
(4) In this section:
investment account contract has the same meaning as in the Life Insurance Act 1995.
life policy has the same meaning as in the Life Insurance Act 1995.
Part 2A—Licensing of trustees and groups of individual trustees
Division 1—Object of this Part
29A Object of this Part and the relationship of this Part to other provisions
(1) The object of this Part is to set out provisions relating to the granting of RSE licences to:
(a) constitutional corporations; and
(b) other bodies corporate; and
(c) groups of individual trustees.
(2) The following is a simplified outline showing some key relationships between this Part and other provisions of the Act and the regulations that trustees should be aware of:
Certain provisions may be contravened if unlicensed trustees carry out particular activities (e.g.: sections 29J and 152). The trustee, or group of individual trustees, of a fund or trust may obtain an RSE licence under this Part.
Note 1: If the trustee is a constitutional corporation, the trustee obtaining an RSE licence may result in a fund or trust becoming an approved deposit fund or pooled superannuation trust, which are each registrable superannuation entities.
Note 2: If the trustee or group of individual trustees makes an election under section 19, the fund may become a regulated superannuation fund. Regulated superannuation funds other than self managed superannuation funds are registrable superannuation entities.
A trustee, or group of individual trustees, that has obtained an RSE licence may have a registrable superannuation entity registered under Part 2B. Certain provisions may be contravened if certain activities are carried out while a registrable superannuation entity is not registered (e.g.: accepting contributions while the entity is unregistered may lead to an offence under section 34.)
Note: A failure to register the fund or trust may also lead to a breach of an RSE licence condition and possible loss of the RSE licence.
Division 2—Classes of RSE licences
29B Classes of RSE licences
(1) There are to be classes of RSE licences.
(2) One class of RSE licences is to be a class that enables a trustee that holds a licence of that class to be a trustee of:
(a) any public offer entity; and
(b) any other registrable superannuation entity included in a class of registrable superannuation entities specified in regulations made for the purposes of this subsection;
subject to any condition imposed on that licence under subsection 29EA(3).
Note 1: An RSE licence of this class is called a public offer entity licence: see subsection 10(1).
Note 2: Only constitutional corporations may hold public offer entity licences: see paragraph 29D(1)(g).
(3) Another class of RSE licences is to be a class that enables a trustee that:
(a) holds a licence of that class; or
(b) is a member of a group of individual trustees that holds a licence of that class;
to be a trustee of any registrable superannuation entity included in a class of registrable superannuation entities (other than a class of public offer entities) specified in regulations made for the purposes of this subsection, subject to any condition imposed on that licence under subsection 29EA(3).
(4) The regulations may provide for other classes of RSE licences. For each such class, the regulations must specify the classes of registrable superannuation entities of which a trustee that:
(a) holds a licence of that class; or
(b) is a member of a group of individual trustees that holds a licence of that class;
is enabled to be a trustee, subject to any condition imposed on that licence under subsection 29EA(3).
(5) The classes of registrable superannuation entity that the regulations may specify in relation to a particular class of RSE licence may include one or more classes of registrable superannuation entity that the regulations specify in relation to another class of RSE licence.
Division 3—Applying for RSE licences
29C Applications for RSE licences
Who may apply for RSE licences
(1) A constitutional corporation may apply to APRA for an RSE licence of any class.
(2) A body corporate that is not a constitutional corporation may apply to APRA for an RSE licence of any class other than a class that would enable it to be a trustee of a public offer entity.
(3) A group of individual trustees may apply to APRA for an RSE licence of any class other than a class that would enable each of the members of the group to be a trustee of a public offer entity.
Requirements for applications
(4) An application for an RSE licence must:
(a) be in the approved form; and
(b) contain the information required by the approved form; and
(c) be accompanied by the application fee (if any) prescribed by regulations made for the purposes of this paragraph.
(5) Regulations made for the purposes of paragraph (4)(c) may prescribe different application fees for applications for different classes of RSE licences.
Notifying certain changes while applications are pending
(6) If:
(a) a body corporate applies for an RSE licence; and
(b) after the application is made, but before APRA decides the application, another director is added to, or removed from the board;
the body corporate must notify APRA, in the approved form, about the change to the membership of the board as soon as practicable after that change occurs.
Note: Part 9 has requirements about equal representation rules.
(7) If:
(a) a group of individual trustees applies for an RSE licence; and
(b) after the application is made, but before APRA decides the application, another trustee is added to, or removed from the group;
a member of the group must notify APRA, in the approved form, about the change to the membership of the group as soon as practicable after that change occurs.
Note: Part 9 has requirements about equal representation rules.
(9) An application is taken not to comply with this section if subsection (6) or (7) is contravened.
Note: APRA cannot grant an RSE licence while the application does not comply with this section: see paragraph 29D(1)(c).
29CA APRA may request further information
(1) If a body corporate or group of individual trustees has applied for an RSE licence, APRA may give the body corporate or a member of the group a notice requesting the body or group to give APRA, in writing, specified information relating to the application by a specified time that is reasonable in the circumstances.
(2) APRA may decide to treat an application by a body corporate or group of individual trustees for an RSE licence as having been withdrawn if the body or group:
(a) does not comply with a request to provide information under this section; and
(b) does not have a reasonable excuse for not complying.
(3) If APRA decides under subsection (2) to treat an application for an RSE licence as having been withdrawn, APRA must take all reasonable steps to ensure that the body that made the application, or a member of the group that made the application, is given a notice informing the body or group of:
(a) APRA’s decision; and
(b) the reasons for that decision;
as soon as practicable after making the decision.
29CB Period etc. for deciding applications from existing trustees in licensing transition period
Statements of intention to apply
(1) A person who was a trustee of a registrable superannuation entity at the start of the licensing transition period may give APRA a written statement that:
(a) is in the approved form; and
(b) indicates whether the person intends to apply under section 29C for an RSE licence; and
(c) lists the registrable superannuation entities that the person intends to apply to have registered under Part 2B if the RSE licence is granted.
Period for deciding applications
(2) Subject to subsection (3), APRA must decide an application for an RSE licence before the end of the licensing transition period if:
(a) the application is received by APRA during that period; and
(b) the application is for an RSE licence to be granted to:
(i) a body corporate that was a trustee of a registrable superannuation entity at the start of the licensing transition period; or
(ii) a group of individual trustees that has a member who was a trustee of a registrable superannuation entity at the start of the licensing transition period.
(3) At any time in the last 6 months of the licensing transition period, APRA may refuse to consider under subsection (2) any further applications for RSE licences that are received by APRA in the last 6 months before the end of the licensing transition period for RSE licences to be granted to:
(a) bodies corporate that were trustees of registrable superannuation entities at the start of the licensing transition period; or
(b) groups of individual trustees with one or more members who were each a trustee of a registrable superannuation entity at the start of the licensing transition period.
(4) If APRA decides to refuse, under subsection (3), to consider under subsection (2) any further applications, APRA must, as soon as practicable after making the decision, publish a notice stating APRA’s decision in a daily newspaper that circulates generally in each State and Territory.
(5) If APRA decides to refuse, under subsection (3), to consider under subsection (2) an application, that application is taken, at the end of the licensing transition period, to have been received by APRA immediately after the end of the licensing transition period.
29CC Period for deciding other applications
(1) APRA must decide an application for an RSE licence within 90 days after receiving it if:
(a) the application is received by APRA after the end of the licensing transition period; or
(b) the application is received by APRA during the licensing transition period and is for an RSE license to be granted to:
(i) a body corporate that was not a trustee of a registrable superannuation entity at the start of the licensing transition period; or
(ii) a group of individual trustees that has no members that were a trustee of a registrable superannuation entity at the start of the licensing transition period;
unless APRA extends the period for deciding the application under subsection (2).
(2) APRA may extend the period for deciding an application covered by paragraph (1)(a) or (b) by up to 30 days if APRA informs the body corporate, or a member of the group, that made the application of the extension:
(a) in writing; and
(b) within 90 days after receiving the application.
(3) If APRA extends the period for deciding the application, it must decide the application within the extended period.
(4) If APRA has not decided the application 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.
Division 4—Grant of RSE licences
29D Grant of RSE licences
(1) APRA must grant an RSE licence to a body corporate, or group of individual trustees, that has applied for an RSE licence if, and only if:
(a) APRA has no reason to believe that:
(i) if the application is made by a body corporate—the body corporate; or
(ii) if the application is made by a group of individual trustees—the group as a whole or any member of the group;
would fail to comply with the RSE licensee law if the RSE licence were granted; and
(b) APRA has no reason to believe that:
(i) if the application is made by a body corporate—the body corporate; or
(ii) if the application is made by a group of individual trustees—the group as a whole or any member of the group;
would fail to comply with any condition imposed on the RSE licence if it were granted; and
(c) the application for the licence complies with section 29C and is for a class of licence that the body corporate or group of individual trustees may apply for under that section; and
(d) APRA is satisfied that:
(i) if the application is made by a body corporate—the body corporate meets the requirements of the prudential standards relating to fitness and propriety for RSE licensees; or
(ii) if the application is made by a group of individual trustees—the group as a whole meets the requirements of the prudential standards relating to fitness and propriety for RSE licensees and each of the members of the group meets the requirements of the prudential standards relating to fitness and propriety for members of groups of trustees that are RSE licensees; and
(f) in a case where the applicant is not a constitutional corporation—APRA is satisfied that:
(i) if the application is made by a body corporate—the body corporate; or
(ii) if the application is made by a group of individual trustees—each member of the group;
only intends to act as a trustee of one or more superannuation funds that have governing rules providing that the sole or primary purpose of the fund is the provision of old‑age pensions; and
(g) in a case where the application is for a licence of a class that enables a trustee that holds a licence of the class to be a trustee of a public offer entity subject to any condition imposed under subsection 29EA(3)—APRA is satisfied that the applicant is a constitutional corporation; and
(h) the application has not been withdrawn, treated as withdrawn under subsection 29CA(2), refused consideration under subsection 29CB(3) or taken to have been refused under subsection 29CC(4).
Note 1: Conditions apply to all RSE licences. See Division 5.
Note 2: An RSE licence may only be granted to a body corporate or a group of individual trustees because only bodies corporate and groups of individual trustees may apply for RSE licences. See section 29C.
(2) Otherwise APRA must refuse the application.
29DB Notice of class of licence
If APRA decides to grant an RSE licence to a body corporate or group of individual trustees, APRA must give the body corporate or group an RSE licence that specifies the class of licence granted.
29DC Documents required to bear ABNs
(1) An RSE licensee must ensure that its ABN is included in:
(a) each document that it gives to APRA in the capacity of an RSE licensee; and
(b) any other document in which it identifies itself as an RSE licensee of a registrable superannuation entity; and
(c) if the RSE licensee is a body corporate—any document in which the body corporate identifies itself as a trustee of a registrable superannuation entity; or
(d) if the RSE licensee is a group of individual trustees—any document in which a member of the group identifies itself as a trustee of a registrable superannuation entity or as a member of a group of individual trustees that are the RSE licensee of a registrable superannuation entity.
(2) However, an RSE licensee is not required to comply with subsection (1) in respect of a particular document if it has been given written approval by APRA not to be required to ensure that its ABN is included in that document or in a class of documents that includes that document.
29DD Licence period
(1) An RSE licence comes into force at the later of:
(a) the time when it is granted; or
(b) the time specified on the licence as the time when it comes into force.
(2) An RSE licence continues in force, subject to:
(a) any imposition of licence conditions under Division 5; or
(b) any variation or revocation of the licence conditions, or variation of the licence class, under Division 6;
until the RSE licence is cancelled under Division 7.
29DE APRA to give notice of refusal of applications
If APRA refuses an application by a body corporate or a group of individual trustees for an RSE licence, APRA must take all reasonable steps to ensure that the body or a member of the group is given a notice informing the body or group of:
(a) APRA’s refusal of the application; and
(b) the reasons for that refusal;
as soon as practicable after refusing the application.
Division 5—Conditions on RSE licences
29E Conditions imposed on all licences and on groups of licences
Conditions imposed on all RSE licences
(1) The following conditions are imposed on all RSE licences:
(a) the RSE licensee and, if the RSE licensee is a group of individual trustees, each of the members of the group, must comply with the RSE licensee law;
(b) the duties of a trustee in respect of each registrable superannuation entity of which it is an RSE licensee must be properly performed by:
(i) if the RSE licensee is a body corporate—the body corporate; or
(ii) if the RSE licensee is a group of individual trustees—each of the members of the group;
(ba) the RSE licensee must:
(i) have an ABN; or
(ii) have made an application for an ABN that has not been refused under the A New Tax System (Australian Business Number) Act 1999;
(d) the RSE licensee must ensure that each registrable superannuation entity of which it is the RSE licensee is:
(i) registered under Part 2B; or
(ii) the subject of an application for registration under Part 2B that has not been finally determined or otherwise disposed of;
(ea) the RSE licensee must ensure that each registrable superannuation entity of which it is an RSE licensee has an ABN;
(f) the RSE licensee must notify APRA of any change in the composition of the RSE licensee (see subsection (2)) within 14 days after the change takes place;
(g) the RSE licensee must comply with any other conditions prescribed by regulations made for the purposes of this paragraph.
Note 1: Breach of a licence condition may lead to consequences such as a direction from APRA to comply with the condition (see section 29EB) or cancellation of the licence (see section 29G).
Note 2: An RSE licensee must notify APRA if the RSE licensee breaches a licence condition: see section 29JA.
Note 3: Additional conditions may be imposed on various types of RSE licences (see subsections (3) to (7)) or a particular RSE licence (see section 29EA).
Change in the composition of the RSE licensee
(2) For the purposes of paragraph (1)(f), a change in the composition of the RSE licensee is:
(a) if the RSE licensee is a body corporate—a person becoming, or ceasing to be, a director of the body corporate; or
(b) if the RSE licensee is a group of individual trustees—an individual becoming, or ceasing to be, a member of the group.
(3) An additional condition is imposed on each RSE licence that enables a trustee that holds a licence of that class to be a trustee of a public offer entity. The condition is that the RSE licensee that holds the licence must continue to be a constitutional corporation.
Licences held by RSE licensees that are not constitutional corporations
(4) The following additional condition is imposed on each RSE licence that is not held by a constitutional corporation:
(a) if the RSE licensee that holds the licence is a body corporate—that the body; or
(b) if the RSE licensee is a group of individual trustees—that the members of the group;
only act as a trustee of superannuation funds that have governing rules providing that the sole or primary purpose of the fund is the provision of old‑age pensions.
Licences held by groups of individual trustees
(5) The following additional conditions are imposed on each RSE licence held by a group of individual trustees:
(a) the members of the group must make all reasonable efforts to ensure that the group always has at least 2 members;
(b) any continuous period for which the group has less than 2 members must be 90 days or less.
Note: Paragraph 29E(1)(f) requires APRA to be notified of any change in the composition of the RSE licensee.
Licences held by RSE licensees of transferee funds
(6) An additional condition is imposed on each RSE licence held by an RSE licensee of a fund that has had benefits of members and beneficiaries transferred to it from a transferor fund under Part 18 (whether while the RSE licensee was the RSE licensee of the fund or earlier). The condition is that, while the RSE licensee is the RSE licensee of the fund, the RSE licensee assumes the obligation to pay benefits to those who were members or beneficiaries of the transferor fund immediately before the transfer.
RSE licensees authorised to offer MySuper products
(6A) The following additional conditions are imposed on each RSE licensee that is authorised to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product:
(a) the RSE licensee must ensure that the governing rules of the fund are not varied so that section 29TC is no longer satisfied in relation to that class of interest;
(b) the RSE licensee must ensure that the governing rules of the fund relating to that class of interest are not contravened.
RSE licensees who apply for authority to offer MySuper product
(6B) An additional condition is imposed on each RSE licensee who makes an application under section 29S for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product. The condition is that the RSE licensee must give effect to elections made in accordance with sections 29SAA, 29SAB and 29SAC.
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.
Complying with rules relating to merging multiple accounts in a superannuation entity
(6E) The following additional condition is imposed on each RSE licence that relates to a superannuation entity for which the RSE licensee has obligations under section 108A. The condition is that the RSE licensee must ensure that the rules that that section requires in relation to the superannuation entity are complied with.
Prescribed conditions imposed on classes of licences
(7) An additional condition prescribed by a regulation made for the purposes of this subsection as a condition applying to all RSE licences of a specified class is imposed on each RSE licence of that class.
(8) A specified class mentioned in subsection (7) may be a class other than a class provided for under subsection 29B(2) or (3) or under regulations made for the purposes of subsection 29B(4).
29EA Additional conditions imposed on individual licences by APRA
(1) APRA may, at any time, impose an additional condition on an RSE licence by giving the RSE licensee a notice setting out the additional condition.
(2) A condition imposed under subsection (1) must not be inconsistent with any condition imposed by, or under, section 29E on an RSE licence.
Note 1: Breach of a licence condition may lead to consequences such as a direction from APRA to comply with the condition (see section 29EB) or cancellation of the licence (see section 29G).
Note 2: An RSE licensee must notify APRA if the RSE licensee breaches a licence condition: see section 29JA.
Note 3: RSE licensees may apply to APRA to have conditions imposed under this section varied or revoked: see section 29F.
(2A) A condition may be expressed to have effect despite anything in the prudential standards.
(3) Without limiting subsection (1), an additional condition imposed under that subsection on an RSE licence may provide that the body corporate that is the RSE licensee, or each of the members of a group of individual trustees that is the RSE licensee, must not act as a trustee under that RSE licence for a registrable superannuation entity other than:
(a) a registrable superannuation entity specified in the condition; or
(b) a registrable superannuation entity included in the class of registrable superannuation entities specified in the condition.
(4) Without limiting subsection (1), an additional condition imposed under that subsection on an RSE licence may provide that the RSE licensee must ensure that a fund specified in the condition, or in a class of funds specified in the condition, must comply with the alternative agreed representation rules whenever section 92 applies to the fund. However, before imposing such a condition, APRA must have regard to any written guidelines determined by APRA under this subsection.
(5) If the RSE licensee is also a financial services licensee:
(a) APRA must consult ASIC before imposing a condition that, in APRA’s opinion, might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and
(b) APRA must inform ASIC about the imposition of any condition not covered by paragraph (a) within one week after the condition is imposed.
(6) A failure to comply with a requirement of subsection (5) does not invalidate the imposition of any condition.
(7) An additional condition imposed under this section comes into force on the later of:
(a) the day on which APRA gives the RSE licensee the notice of the condition; or
(b) the day specified in the notice as the day on which the condition comes into force.
29EB Directions to comply with licence conditions
APRA may direct an RSE licensee to comply with a specified condition of its RSE licence by a specified time if APRA has reasonable grounds to believe that the RSE licensee has breached the condition. The direction must:
(a) be by notice in writing given to the RSE licensee; and
(b) specify a time that is reasonable in the circumstances.
Note: A failure to comply with a direction may lead to cancellation of the RSE licence (see section 29G) and may be an offence (see section 29JB).
Division 6—Varying RSE licences
29F Applications for variation of RSE licences
(1) An RSE licensee may apply to APRA for one or both of the following:
(a) variation of its RSE licence so that the RSE licence is an RSE licence of a different class;
(b) variation or revocation of a condition that APRA has imposed on its RSE licence under section 29EA.
(2) An application under this section must:
(a) be in the approved form; and
(b) contain the information required by the approved form; and
(c) if the application is for a variation of an RSE licence so that it is an RSE licence of a different class—be accompanied by the application fee (if any) prescribed for the type of variation by regulations made for the purposes of this paragraph.
29FA APRA may request further information
(1) APRA may give an RSE licensee that makes an application under section 29F a notice requesting the RSE licensee to give APRA, in writing, specified information relating to the application by a specified time that is reasonable in the circumstances.
(2) APRA may decide to treat an application under section 29F as having been withdrawn if the RSE licensee:
(a) does not comply with a request to provide information under this section; and
(b) does not have a reasonable excuse for not complying.
(3) If APRA decides to treat an application under section 29F as having been withdrawn, APRA must take all reasonable steps to ensure that the RSE licensee is given a notice informing the RSE licensee of:
(a) APRA’s decision; and
(b) the reasons for that decision;
as soon as practicable after making the decision.
29FB Period for deciding applications
(1) APRA must decide an application under section 29F within 60 days of receiving the application, unless APRA extends the period for deciding the application under subsection (2).
(2) APRA may extend the period for deciding an application under section 29F by up to 60 days if APRA informs the RSE licensee of the extension:
(a) in writing; and
(b) within 60 days of receiving the application.
(3) If APRA extends the period for deciding an application under section 29F, it must decide the application within the extended period.
(4) If APRA has not decided an application under section 29F 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.
29FC APRA may vary RSE licences in accordance with applications
(1) APRA may, by notice to an RSE licensee:
(a) vary the RSE licensee’s RSE licence so that it is an RSE licence of a different class; or
(b) vary or revoke a condition that APRA has imposed on the RSE licence under section 29EA;
in accordance with an application under section 29F.
(2) However:
(a) an RSE licence must not be varied so that it becomes an RSE licence of a particular class unless APRA is satisfied that the RSE licensee will comply with any conditions imposed on that class of RSE licence; and
(b) a condition as varied under paragraph (1)(b) must not be inconsistent with any condition imposed by section 29E; and
(c) if the RSE licensee is also a financial services licensee:
(i) APRA must consult ASIC before varying the RSE licence so that it is an RSE licence of a different class, if, in APRA’s opinion, the variation might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and
(ii) APRA must consult ASIC before varying or revoking a condition that, in APRA’s opinion, might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and
(iii) APRA must consult ASIC before varying a condition so that it would, in APRA’s opinion, become a condition that might reasonably be expected to have an effect as described in subparagraph (ii); and
(iv) APRA must inform ASIC about the variation or revocation of any condition not covered by subparagraph (i), (ii) or (iii) within one week after the condition is varied or revoked.
(3) A failure to comply with a requirement of paragraph (2)(c) does not invalidate:
(a) the variation of an RSE licence so that it is an RSE licence of a different class; or
(b) the variation or revocation of a licence condition.
(4) APRA is not required to vary the class of, or vary or revoke any condition of, an RSE licence in the terms requested by an RSE licensee in an application under section 29F.
29FD APRA may vary or revoke licence conditions on its own initiative
(1) APRA may, on its own initiative, vary or revoke any condition that it imposed on an RSE licence under section 29EA.
(2) However:
(a) a condition as varied under subsection (1) must not be inconsistent with any condition imposed by section 29E; and
(b) if the RSE licensee that holds the licence is also a financial services licensee:
(i) APRA must consult ASIC before varying or revoking a condition that, in APRA’s opinion, might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and
(ii) APRA must consult ASIC before varying a condition so that it would, in APRA’s opinion, become a condition that might reasonably be expected to have an effect as described in subparagraph (i); and
(iii) APRA must inform ASIC about the variation or revocation of any condition not covered by subparagraph (i) or (ii) within one week after the condition is varied or revoked.
(3) A failure to comply with a requirement of paragraph (2)(b) does not invalidate the variation or revocation of a condition.
29FE Notification of APRA’s decisions under this Division
(1) APRA must give a notice to an RSE licensee if APRA:
(a) varies the RSE licensee’s RSE licence under section 29FC so that it is an RSE licence of a different class; or
(b) varies or revokes, under section 29FC or 29FD, a condition that APRA imposed on the RSE licence under section 29EA.
(2) The notice must:
(a) if paragraph (1)(a) applies—specify the class of the RSE licence after the variation; and
(b) if paragraph (1)(b) applies:
(i) identify the licence condition being varied or revoked; and
(ii) specify any conditions imposed under section 29EA to which the licence is subject after the variation or revocation comes into force; and
(c) state the reasons for the variation or revocation; and
(d) specify the day, not earlier than the day on which APRA gives the notice, on which the variation or revocation comes into force.
(3) If APRA refuses an application for a variation or revocation under section 29FC, APRA must take all reasonable steps to ensure that the RSE licensee that made the application is given a notice informing it of:
(a) APRA’s refusal of the application; and
(b) the reasons for the refusal;
as soon as practicable after refusing the application.
29FF When variations or revocations come into force etc.
(1) If, under section 29FC, APRA varies an RSE licence so that it is an RSE licence of a different class:
(a) the variation comes into force on the day specified in the notice under paragraph 29FE(2)(d); and
(b) the variation remains in force until:
(i) the licence is again varied so that it is an RSE licence of a different class; or
(ii) the licence is cancelled.
(2) If, under section 29FC or 29FD, APRA varies a condition imposed on an RSE licence:
(a) the variation comes into force on the day specified in the notice under paragraph 29FE(2)(d); and
(b) the variation remains in force until:
(i) the condition is varied in an inconsistent manner; or
(ii) the condition is revoked; or
(iii) the licence is cancelled.
(3) If, under section 29FC or 29FD, APRA revokes a condition imposed on an RSE licence, the revocation comes into force on the day specified in the notice under paragraph 29FE(2)(d).
Division 7—Cancelling RSE licences
29G Cancellation of RSE licences
(1) APRA may, in writing, cancel an RSE licence.
Note: In some circumstances, APRA must inform or consult ASIC (see section 29GA).
(2) Without limiting subsection (1), APRA may cancel an RSE licence under that subsection if:
(a) the RSE licensee has requested, in the approved form, that the licence be cancelled; or
(b) the RSE licensee is a body corporate and is a disqualified person for the purposes of Part 15; or
(c) the RSE licensee has breached a condition imposed on the licence; or
(d) APRA has reason to believe that the RSE licensee will breach a condition imposed on the licence; or
(e) the RSE licensee has failed to comply with a direction by APRA under section 29EB; or
(f) APRA has reason to believe that the RSE licensee will fail to comply with a direction by APRA under section 29EB.
(4) If APRA cancels an RSE licence it must take all reasonable steps to ensure that the body corporate or a member of the group that held the RSE licensee is given a notice informing the body corporate or group:
(a) that APRA has cancelled the licence; and
(b) of the reasons for the cancellation.
29GA Cancellation of RSE licences of financial services licensees
(1) Before cancelling the RSE licence of an RSE licensee that is also a financial services licensee, APRA must consult ASIC if, in APRA’s opinion, the cancellation might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides.
(2) If APRA cancels the RSE licence of an RSE licensee that is also a financial services licensee, APRA must inform ASIC of the cancellation within one week after the cancellation.
(3) A failure to comply with a requirement of this section does not invalidate the cancellation of an RSE licence.
29GB APRA may allow RSE licence to continue in effect
In a notice that APRA gives to an RSE licensee cancelling its RSE licence, APRA may specify that the RSE licence continues in effect as though the cancellation had not happened for the purposes of:
(a) a specified provision, administered by APRA, of this Act, the regulations or the prudential standards; or
(b) a specified provision, administered by APRA, of any other law of the Commonwealth;
in relation to specified matters, a specified period, or both.
Division 9—Offences and self‑incrimination
29J Being trustee of a registrable superannuation entity while unlicensed etc.
(1) A person must not be a trustee, or act as a trustee, of a registrable superannuation entity unless at least one of the following paragraphs apply:
(a) the person holds an RSE licence that enables the person to be the trustee of the entity;
(b) the person is a member of a group of individual trustees that holds an RSE licence that enables the members of the group to each be a trustee of the entity.
(2) Despite subsection 13.3(3) of the Criminal Code, a defendant does not bear an evidential burden in relation to any matter in subsection (1) of this section.
(3) A person that contravenes subsection (1) commits an offence.
Penalty: Imprisonment for 2 years, or 120 penalty units, or both.
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.
(4) A person must not be a trustee of a registrable superannuation entity, or act as a trustee of a registrable superannuation entity, if the person:
(a) is a body corporate; and
(b) is not the only trustee of the registrable superannuation entity.
(5) A person that contravenes subsection (4) commits an offence.
Penalty: Imprisonment for 2 years, or 120 penalty units, or both.
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.
(6) This section does not prevent an RSE licensee from engaging or authorising persons to act on its behalf.
29JA Failing to notify breach of licence condition
(1) If an RSE licensee becomes aware that:
(a) the RSE licensee has breached or will breach a condition imposed on its RSE licence; and
(b) the breach is or will be significant (see subsection (1A));
the RSE licensee must give APRA a written report about the breach as soon as practicable, and in any case no later than 10 business days, after becoming aware of the breach.
(1A) For the purposes of subsection (1), a breach is or will be significant if the breach is or will be significant having regard to any one or more of the following factors:
(a) the number or frequency of similar previous breaches;
(b) the impact the breach has or will have on the RSE licensee’s ability to fulfil its obligations as trustee of the superannuation entity;
(c) the extent to which the breach indicates that the RSE licensee’s arrangements to ensure compliance with the RSE licensee law might be inadequate;
(d) the actual or potential financial loss arising or that will arise from the breach to the beneficiaries of the entity or to the RSE licensee;
(e) any other matters prescribed by regulations made for the purposes of this paragraph.
(2) A person commits an offence if:
(a) the person is:
(i) a body corporate that is an RSE licensee; or
(ii) a member of a group of individual trustees that is an RSE licensee; and
(b) the RSE licensee is in breach of subsection (1).
Penalty: 50 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: 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.
29JB Not complying with direction to comply with licence conditions
(1) An RSE licensee must comply with a direction given to it under section 29EB within the time specified in the direction.
(2) A person commits an offence if:
(a) the person is:
(i) a body corporate that is an RSE licensee; or
(ii) a member of a group of individual trustees that is an RSE licensee; and
(b) the RSE licensee is in breach of subsection (1).
Penalty: 60 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: 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.
29JCA False representation about status as RSE licensee
(1) A person commits an offence if:
(a) the person makes a representation; and
(b) the representation is that the person is, or is a member of a group that is, an RSE licensee; and
(c) the representation is false.
Penalty: 60 penalty units.
(2) Strict liability applies to subsection (1).
Note: For strict liability, see section 6.1 of the Criminal Code.
29JD Breach does not affect validity of issue of superannuation interests etc.
A breach of section 29J, 29JA or 29JB does not affect the validity of the issue of a superannuation interest or of any other act.
Part 2B—Registrable superannuation entities
Division 1—Object of this Part
29K Object etc. of this Part
(1) The object of this Part is to provide for the registration of registrable superannuation entities.
(2) Registration is significant because an RSE licensee may breach the licence condition imposed by paragraph 29E(1)(d) if a registrable superannuation entity of which it is the RSE licensee is not registered.
Note: Breach of a licence condition may lead to consequences such as a direction from APRA to comply with the condition (see section 29EB) or cancellation of the licence (see section 29G).
Division 2—Applying for registration
29L Applications for registration
Who may apply for registration
(1) An RSE licensee may apply to APRA for registration of a registrable superannuation entity.
Requirements for applications
(2) An application for registration of a registrable superannuation entity must:
(a) be in the approved form; and
(b) contain the information required by the approved form; and
(ba) state the RSE licensee’s and the entity’s ABNs; and
(c) be accompanied by an up‑to‑date copy of the trust deed by which the registrable superannuation entity is constituted (except to the extent that the trust deed is constituted by the governing rules of the entity); and
(d) be accompanied by an up‑to‑date copy of the governing rules of the registrable superannuation entity (except to the extent that the governing rules are constituted by the law of the Commonwealth or by unwritten rules).
Note: If the RSE licensee is a group of individual trustees, the copy or statement must be signed by each of the members of the group: see subsection 13A(6).
Notifying certain changes while applications are pending
(3) If:
(a) an RSE licensee applies for registration of a registrable superannuation entity; and
(b) after the application is made but before APRA decides the application, the trust deed (other than the governing rules of the entity) by which the entity is constituted is varied or revoked and replaced;
the RSE licensee must lodge an up‑to‑date copy of the trust deed with APRA as soon as practicable after the trust deed is varied or revoked and replaced.
(4) If:
(a) an RSE licensee applies for registration of a registrable superannuation entity; and
(b) after the application is made but before APRA decides the application, any governing rules of the entity (that are not constituted by the law of the Commonwealth or by unwritten rules) are varied or revoked and replaced;
the RSE licensee must lodge an up‑to‑date copy of the governing rules (that are not constituted by the law of the Commonwealth or by unwritten rules) with APRA as soon as practicable after the governing rules are varied or revoked and replaced.
(6) An application is taken not to comply with this section if subsection (3) or (4) is contravened.
Note: APRA cannot register an entity while the application does not comply with this section: see paragraph 29M(1)(a).
Lapsed applications
(7) An application for registration lapses if:
(a) it was made by an RSE licensee; and
(b) the RSE licensee ceases to be an RSE licensee before:
(i) APRA makes a decision on the application for registration; or
(ii) if APRA’s decision with respect to the application is subject to review under this Act—before the review is finally determined or otherwise disposed of.
29LA APRA may request further information
APRA may give an RSE licensee that has applied for registration of a registrable superannuation entity 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 29LB(1)(b).
29LB Period for deciding applications for registration
(1) APRA must decide an application by an RSE licensee for registration of a registrable superannuation entity:
(a) within 21 days after receiving the application; or
(b) if the applicant was requested to provide information under section 29LA—within 21 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 registration of a registrable superannuation entity by up to 7 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 registration of a registrable superannuation entity, it must decide the application within the extended period.
(4) If APRA has not decided an application for registration of a registrable superannuation entity 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.
Division 3—Registration
29M Registration of registrable superannuation entity
(1) APRA must register a registrable superannuation entity if, and only if:
(a) the application for registration complies with section 29L; and
(b) the applicant has provided to APRA all information that the applicant was requested, under section 29LA, to provide, or the request has been disposed of; and
(c) APRA is satisfied that nothing in the governing rules of the entity conflicts with Part 6; and
(e) the applicant for registration holds an RSE licence that enables:
(i) if the applicant is a body corporate—the body corporate; or
(ii) if the applicant is a group of individual trustees—each member of the group;
to be a trustee of that entity.
(2) Otherwise APRA must refuse to register the entity.
29MA Notice of registration
If APRA registers a registrable superannuation entity, APRA must notify the RSE licensee of the entity in writing of the registration.
29MB Documents required to bear ABNs
(1) After a registrable superannuation entity is registered, the RSE licensee of the entity must ensure that the entity’s ABN is included in:
(a) each document that the RSE licensee gives to APRA that relates to the entity; and
(b) any other document in which the RSE licensee identifies itself as the RSE licensee of the entity; and
(c) if the RSE licensee is a body corporate—any document in which the body corporate identifies itself as a trustee of the entity; and
(d) if the RSE licensee is a group of individual trustees—any document that a member of the group gives to APRA or in which a member of the group identifies itself as a trustee of the entity or as a member of a group of individual trustees that are the RSE licensee of the entity.
(2) However, an RSE licensee is not required to comply with subsection (1) in respect of a particular document if the RSE licensee has been given written approval by APRA not to ensure that the ABN is included in that document or in a class of documents that includes that document.
29MC APRA to give notice of refusal of applications
If APRA refuses an application by an RSE licensee for registration of a registrable superannuation entity, 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.
Division 4—Cancelling registration
29N Cancelling registration
(1) APRA must cancel the registration of a registrable superannuation entity if a document that:
(a) is a reporting document within the meaning of the Financial Sector (Collection of Data) Act 2001; and
(b) relates to the entity; and
(c) was given to APRA under that Act;
states that the entity has been wound up.
(1A) APRA may cancel the registration of a superannuation entity that has become a self managed superannuation fund.
(2) APRA may cancel the registration of a registrable superannuation entity if APRA is satisfied, on reasonable grounds, that:
(a) the entity has no beneficiaries and no assets; and
(b) there are no outstanding claims against the entity for benefits or other payments; and
(c) other circumstances (if any) prescribed by regulations made for the purposes of this paragraph exist.
(3) If APRA cancels the registration of a registrable superannuation entity under subsection (2), APRA must take all reasonable steps to ensure that the RSE licensee of the entity is given a notice:
(a) stating that APRA has cancelled the registration of the entity; and
(b) setting out the reasons for the cancellation;
as soon as practicable after cancelling the registration of the entity.
Division 5—Offences
29QB Certain information required to be made publicly available
(1) An RSE licensee of a registrable superannuation entity must ensure that the following is made publicly available, and kept up to date, at all times on the registrable superannuation entity’s website:
(a) details of the remuneration of:
(i) if the RSE licensee is a body corporate—each executive officer in relation to the RSE licensee; and
(ii) if the RSE licensee is a group of individual trustees—each trustee of the registrable superannuation entity;
being details of a kind prescribed by the regulations;
(b) any other document or information prescribed by the regulations.
(2) A person commits an offence if:
(a) the person is:
(i) a body corporate that is an RSE licensee; or
(ii) a member of a group of individual trustees that is an RSE licensee; and
(b) the RSE licensee contravenes subsection (1).
Penalty: 50 penalty units.
(3) Subsection (2) is an offence of strict liability.
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Chapter 2 of the Criminal Code sets out the general principles of criminal liability and Part IA of the Crimes Act 1914 contains provisions dealing with penalties.
29QC Obligation to give consistent information
(1) Subject to subsection (2), if:
(a) an RSE licensee is required to give information to APRA under a reporting standard (within the meaning of the Financial Sector (Collection of Data) Act 2001); and
(b) under the reporting standard, the information is required to be calculated in a particular way; and
(c) the same or equivalent information is given by the RSE licensee to a person other than an agency of the Commonwealth or of a State or Territory, whether or not by publishing the information on a website;
the RSE licensee must ensure that the information given to the other person is calculated in the same way as the information given to APRA.
(2) Subsection (1) does not apply to information given to the other person in circumstances prescribed by the regulations.
(3) A person commits an offence if:
(a) the person is:
(i) a body corporate that is an RSE licensee; or
(ii) a member of a group of individual trustees that is an RSE licensee; and
(b) the RSE licensee contravenes subsection (1).
Penalty: 50 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Chapter 2 of the Criminal Code sets out the general principles of criminal liability and Part IA of the Crimes Act 1914 contains provisions dealing with penalties.
Part 2C—MySuper
Division 1—Object of this Part
29R Object of this Part
(1) It is intended that all MySuper products will be simple products sharing common characteristics.
(2) The object of this Part is to ensure that a class of beneficial interest in a regulated superannuation fund is not offered as a MySuper product unless it has those characteristics.
(3) This is done by requiring the RSE licensee of a regulated superannuation fund to obtain authority from APRA before offering a class of beneficial interest in the fund as a MySuper product.
(4) The ability of an RSE licensee to offer a MySuper product is significant for the purposes of the Superannuation Guarantee (Administration) Act 1992. Under that Act, employers will need to pay contributions for an employee who has no chosen fund into a fund that offers a MySuper product, in order to meet the choice of fund requirements and so avoid an increased individual superannuation guarantee shortfall for the employee.
Division 2—Applying for authority
29S Application for authority to offer a MySuper product
Who may apply?
(1) An RSE licensee may apply to APRA for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product.
Requirements for applications
(2) An application for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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 up‑to‑date copy of the trust deed by which the fund is constituted (except to the extent that the trust deed is constituted by governing rules of the fund); and
(e) be accompanied by an up‑to‑date copy of the governing rules of the fund (except to the extent that the governing rules are constituted by the law of the Commonwealth or by unwritten rules); and
(f) be accompanied by elections made in accordance with each of the following sections:
(i) section 29SAA;
(ii) section 29SAB;
(iii) section 29SAC.
Notifying certain changes while applications are pending
(3) If:
(a) an RSE licensee applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; and
(b) after the application is made but before APRA decides the application, the trust deed (other than the governing rules of the fund) by which the fund is constituted is varied or revoked and replaced;
the RSE licensee must lodge an up‑to‑date copy of the trust deed with APRA as soon as practicable after the trust deed is varied or revoked and replaced.
(4) If:
(a) an RSE licensee applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; and
(b) after the application is made but before APRA decides the application, any governing rules of the fund (that are not constituted by the law of the Commonwealth or by unwritten rules) are varied or revoked and replaced;
the RSE licensee must lodge an up‑to‑date copy of the governing rules (that are not constituted by the law of the Commonwealth or by unwritten rules) with APRA as soon as practicable after the governing rules are varied or revoked and replaced.
(5) If:
(a) an RSE licensee applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; 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.
(6) An application is taken not to comply with this section if subsection (3), (4) or (5) is contravened.
Note: APRA cannot give authority to offer a class of beneficial interest in the fund as a MySuper product while the application does not comply with this section: see paragraph 29T(1)(a).
Lapsed applications
(7) 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 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.
29SAA Election to transfer accrued default amounts
(1) An RSE licensee that applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product makes an election in accordance with this section if:
(a) the RSE licensee elects that, if authority to offer the class of beneficial interest in the fund as a MySuper product is given, the RSE licensee will:
(i) attribute to the MySuper product each amount that is an accrued default amount for a member of the fund who is eligible to hold the MySuper product, unless the member directs the RSE licensee in writing to attribute the amount to another MySuper product or an investment option within a choice product in the fund; and
(ii) do so before the end of a period of 30 days beginning on the day on which notice of authority to offer the class of beneficial interest in the fund as a MySuper product is given to the RSE licensee under section 29TD; and
(b) the RSE licensee elects that the RSE licensee will, before the end of the action period, take the action required under the prudential standards in relation to the following:
(i) each amount that is an accrued default amount for a member of the fund who is not eligible to hold a MySuper product offered by the fund;
(ii) each amount that is an accrued default amount for a member of another regulated superannuation fund of the RSE licensee that does not offer a MySuper product; and
(c) the election is in writing; and
(d) the election is in the approved form.
(2) The action period, for the purposes of paragraph (1)(b), in relation to an application by an RSE licensee for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product, ends at the end of a period of 90 days beginning on:
(a) if APRA authorises the RSE licensee to offer the class of beneficial interest in the fund as a MySuper product—the day on which notice of that authority is given to the RSE licensee under section 29TD; or
(b) if APRA refuses the application—the day on which notice of the refusal is given to the RSE licensee under section 29TE.
(3) If an RSE licensee makes an election under this section, the RSE licensee must comply with any requirements prescribed in the regulations in relation to:
(a) notices to be given to a member of the fund for whom there is an accrued default amount before the amount is attributed, or a decision is taken to continue to attribute the amount, to a MySuper product or an investment option within a choice product in the fund; and
(b) notices to be given to a member of the fund for whom there is an accrued default amount before the amount is moved to another fund.
29SAB Election to transfer assets attributed to a MySuper product if authorisation cancelled
An RSE licensee that applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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 any asset or assets of the fund that are attributed to the MySuper product, if the authority to offer the relevant class of beneficial interest in the fund as a MySuper product is cancelled under subsection 29U(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 29U(3); and
(b) the election is in writing; and
(c) the election is in the approved form.
29SAC Election not to charge MySuper members for payment of conflicted remuneration
(1) An RSE licensee that applies for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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 MySuper member a fee in relation to the MySuper product, 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.
29SA APRA may request further information
APRA may give an RSE licensee that has applied for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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 29SB(1)(b).
29SB Period for deciding applications for authority
(1) APRA must decide an application by an RSE licensee for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product:
(a) within 60 days after receiving the application; or
(b) if the applicant was requested to provide information under section 29SA—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 offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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 offer a class of beneficial interest in a regulated superannuation fund as a MySuper product, it must decide the application within the extended period.
(4) If APRA has not decided an application for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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.
Division 3—Authority
29T Authority to offer a MySuper product
(1) APRA must authorise an RSE licensee to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product if, and only if:
(a) the application for authority complies with section 29S; and
(b) the applicant has provided to APRA all information that the applicant was requested, under section 29SA, to provide, or the request has been disposed of; and
(c) the fund is registered under Part 2B; and
(d) either:
(i) the fund has 5 or more members; or
(ii) APRA is satisfied that the fund will, if authority is given, have 5 or more members within a period specified in the authority; and
(e) the fund is not an eligible rollover fund; and
(f) one of the following subparagraphs applies:
(i) the licensee is not already authorised to offer another class of beneficial interest in the fund as a MySuper product;
(ii) the licensee is already authorised to offer another class of beneficial interest in the fund as a MySuper product, but section 29TA or 29TB is satisfied, in relation to the class of beneficial interest in the fund to which the application relates, at the time APRA gives authority;
(iii) the licensee is already authorised to offer another class of beneficial interest in the fund as a MySuper product, but section 29TA or 29TB was satisfied in relation to each class of beneficial interest that the RSE licensee is already authorised to offer as a MySuper product, at the time APRA gave that earlier authority; and
(g) APRA is satisfied that section 29TC is satisfied in relation to that class of beneficial interest; and
(h) APRA is satisfied that:
(i) where the RSE licensee is a body corporate—the RSE licensee; or
(ii) where the RSE licensee is made up of a group of individual trustees—each of those individual trustees;
is likely to comply with the enhanced trustee obligations for MySuper products; and
(ha) where the RSE licensee is a body corporate—APRA is satisfied that the directors of the RSE licensee are likely to comply with the enhanced director obligations for MySuper products; and
(i) APRA is satisfied that:
(i) where the RSE licensee is a body corporate—the RSE licensee; or
(ii) where the RSE licensee is made up of a group of individual trustees—each of those individual trustees;
is likely to comply with the general fees rules and the fees rules in relation to MySuper products; and
(j) APRA is satisfied that the RSE licensee is not likely to contravene section 29W, 29WA or 29WB.
(2) Otherwise APRA must refuse to give the authority.
29TA Product in another fund in which there is already material goodwill
This section is satisfied in relation to a class of beneficial interest in a regulated superannuation fund (the proposed MySuper product) if:
(a) the benefits of members and beneficiaries in another regulated superannuation fund (the original fund) are to be transferred to the fund; and
(b) APRA is satisfied that:
(i) some or all of the persons whose benefits are to be transferred hold a class of interest in the original fund that is similar to the proposed MySuper product; and
(ii) there is material goodwill in that class of interest in the original fund; and
(iii) that goodwill could not be maintained unless the RSE licensee were authorised to offer the proposed MySuper product as an additional MySuper product in the fund; and
(iv) it would be in the best interests of the members of the fund, and those persons whose benefits are to be transferred to the fund, to maintain the distinction between the proposed MySuper product and other MySuper products within the fund.
29TB MySuper products for large employers
(1) This section is satisfied in relation to a class of beneficial interest in a regulated superannuation fund if:
(a) under the governing rules of the fund, one employer is specified as a large employer in relation to the fund who is relevant to that class of beneficial interest; and
(b) either:
(i) that employer is a large employer in relation to the fund (see subsection (2)); or
(ii) APRA is satisfied that, if authority to offer the class of beneficial interest in the fund as a MySuper product is given, that employer will be a large employer in relation to the fund by the end of the period specified in the authority; and
(c) under the governing rules of the fund, a person is not entitled to hold an interest of that class in the fund unless the person is:
(i) an employee or a former employee of the large employer; or
(ii) an employee or a former employee of an associate of the large employer; or
(iii) a relative or dependant of an employee or a former employee mentioned in subparagraph (i) or (ii); and
(d) under the governing rules of the fund:
(i) where the large employer or an associate of the large employer contributes to the fund or would, apart from a temporary cessation of contributions, contribute to the fund for an employee of the large employer, any employee of the large employer who is not a defined benefit member of the fund may hold an interest of that class in the fund; and
(ii) where the large employer or an associate of the large employer contributes to the fund or would, apart from a temporary cessation of contributions, contribute to the fund for an employee of an associate of the large employer, any employee of that associate who is not a defined benefit member of the fund may hold an interest of that class in the fund.
(2) An employer is a large employer in relation to a regulated superannuation fund if there are 500 or more members of the fund who are any of the following:
(a) a member of the fund:
(i) who is an employee of the employer; and
(ii) in relation to whom the employer or an associate of the employer contributes to the fund or would, apart from a temporary cessation of contributions, contribute to the fund;
(b) a member of the fund:
(i) who is an employee of an associate of the employer; and
(ii) in relation to whom either the employer or an associate of the employer contributes to the fund or would, apart from a temporary cessation of contributions, contribute to the fund.
(3) In working out under subsection (2) whether an employer is a large employer, disregard defined benefit members of the fund.
29TC Characteristics of a MySuper product
(1) This section is satisfied in relation to a class of beneficial interest in a regulated superannuation fund if, under the governing rules of the fund:
(a) a single diversified investment strategy is to be adopted in relation to assets of the fund, to the extent that they are attributed to that class of beneficial interest in the fund; and
(b) all members who hold a beneficial interest of that class in the fund are entitled to access the same options, benefits and facilities except to the extent that a benefit is provided by taking out risk insurance; and
(c) amounts are attributed to members in relation to their beneficial interest of that class in the fund in a way that does not stream gains or losses that relate to any assets of the fund to only some of those members, except to the extent permitted under a lifecycle exception (see subsection (2)); and
(d) the same process is to be adopted in attributing amounts to members in relation to their beneficial interest of that class in the fund, except to the extent that a different process is necessary to allow for fee subsidisation by employers; and
(e) if fee subsidisation by employers is permitted, that subsidisation does not favour one member who holds a beneficial interest of that class in the fund and is an employee of a subsidising employer over another such member who is an employee of that employer; and
(f) the only limitations imposed on the source or kind of contributions made by or on behalf of persons who hold a beneficial interest of that class in the fund are those permitted under subsection (3); and
(g) a beneficial interest of that class in the fund cannot be replaced with a beneficial interest of another class in the fund, unless:
(i) the person who holds the interest consents in writing to that replacement no more than 30 days before it occurs; or
(ii) the person who holds the interest has died and the interest is replaced with a beneficial interest of another class in the fund of a kind, and in the circumstances, prescribed by the regulations; and
(h) a beneficial interest of that class in the fund (the old interest) cannot be replaced with a beneficial interest (the new interest) in another superannuation entity unless:
(ii) the replacement is permitted, or is required, under a law of the Commonwealth; or
(iii) the person who holds the old interest consents in writing to the replacement with the new interest no more than 30 days before it occurs; and
(i) to the extent that assets of the fund are attributed to beneficial interests of that class, a pension is not payable out of those assets by the trustee, or trustees, of the fund on the satisfaction of a condition of release of benefits specified in a standard made under paragraph 31(2)(h) by a person who holds a beneficial interest of that class, unless the payment is derived from a benefit of the kind mentioned in subparagraph 62(1)(b)(ii) provided to the fund by an insurer; and
Note: Subparagraph 62(1)(b)(ii) is about benefits payable when a person ceases work due to ill‑health.
(j) no member who holds a beneficial interest of that class in the fund is precluded from holding a beneficial interest of another class in the fund because of that fact; and
(k) no member is precluded from holding a beneficial interest of that class in the fund because the member holds a beneficial interest of another class in the fund.
(2) A lifecycle exception is a rule under the governing rules of the fund that allows gains and losses from different classes of asset of the fund to be streamed to different subclasses of the members of the fund who hold a MySuper product:
(a) on the basis, and only on the basis, of the age of those members; or
(b) on the basis of the age of those members and other prescribed factors; or
(c) on the basis of the age of those members and other prescribed factors in prescribed circumstances.
(3) A limitation on the source or kind of contributions made by or on behalf of persons who hold a beneficial interest of a particular class in a regulated superannuation fund is permitted for the purposes of paragraph (1)(f) if:
(a) the limitation is of a prescribed kind; or
(b) the limitation is imposed by or under the general law or another law of the Commonwealth.
29TD Notice of authority
If APRA authorises an RSE licensee to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product, APRA must notify the RSE licensee in writing of the authority.
29TE APRA to give notice of refusal of authority
If APRA refuses an application by an RSE licensee for authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product, 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.
Division 4—Cancelling authority
29U Cancelling authority to offer MySuper product
(1) APRA may, in writing, cancel an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product.
(2) Without limiting subsection (1), APRA may cancel an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product if:
(a) APRA is no longer satisfied that section 29TC is satisfied in relation to that class of beneficial interest in the fund; or
(b) authority was given to offer that class of beneficial interest in the fund as a MySuper product because section 29TB was satisfied in relation to the class and either:
(i) in a case where that section was satisfied because APRA was satisfied that an employer would be a large employer by the end of a period specified in the authority—the employer was not a large employer at that time; or
(ii) in any case—that section was no longer satisfied in relation to the class on the last day of the immediately preceding year of income; or
(c) APRA is no longer satisfied that:
(i) where the RSE licensee is a body corporate—the RSE licensee; or
(ii) where the RSE licensee is made up of a group of individual trustees—each of those individual trustees;
is likely to comply with the enhanced trustee obligations for MySuper products (whether because of a previous failure to do so, or for any other reason); or
(ca) where the RSE licensee is a body corporate—APRA is no longer satisfied that the directors of the RSE licensee are likely to comply with the enhanced director obligations for MySuper products (whether because of a previous failure to do so, or for any other reason); or
(d) APRA is no longer satisfied that:
(i) where the RSE licensee is a body corporate—the RSE licensee; or
(ii) where the RSE licensee is made up of a group of individual trustees—each of those individual trustees;
is likely to comply with the general fees rules and the fees rules in relation to MySuper products (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 29W, 29WA or 29WB (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) either:
(i) in a case where authority was given to offer the class of beneficial interest in the fund as a MySuper product on the basis that the fund would have 5 or more members within a period specified in the authority—the fund does not have 5 or more members at the end of that period; or
(ii) in any case—the fund has ceased to have 5 or more members; or
(h) paragraph 29T(1)(e) is no longer satisfied in relation to the fund (no longer an eligible rollover fund); or
(i) APRA is satisfied that:
(i) where the RSE licensee is a body corporate—the RSE licensee; or
(ii) where the RSE licensee is made up of a group of individual trustees—one of those individual trustees;
has contravened a provision of the governing rules of the fund relating to the MySuper product; or
(j) APRA is satisfied that the RSE licensee has failed to give effect to an election made in accordance with section 29SAA (election to transfer accrued default amounts to a MySuper product); or
(k) APRA is satisfied that the RSE licensee has failed to give effect to an election made in accordance with section 29SAC (election not to pass costs of conflicted remuneration to MySuper members).
(3) If APRA cancels an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product 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.
(4) If:
(a) APRA cancels an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product; and
(b) as a result of the cancellation, the fund no longer offers any MySuper product;
APRA must also notify the Fair Work Commission in writing of that fact.
29UA Cancellation of authority of an RSE licensee that is also a financial services licensee
(1) Before cancelling an authority of an RSE licensee that is also a financial services licensee, APRA must consult ASIC if, in APRA’s opinion, the cancellation might reasonably be expected to affect the RSE licensee’s ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides.
(2) If APRA cancels the authority of an RSE licensee that is also a financial services licensee, APRA must inform ASIC of the cancellation within one week after the cancellation.
(3) A failure to comply with a requirement of this section does not invalidate the cancellation of an authority to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product.
29UB APRA may allow authority to continue in effect
In a notice that APRA gives to an RSE licensee cancelling an authority, APRA may specify that the authority continues in effect as though the cancellation had not happened for the purposes of:
(a) a specified provision, administered by APRA, of this Act, the regulations or the prudential standards; or
(b) a specified provision, administered by APRA, of any other law of the Commonwealth;
in relation to specified matters, a specified period, or both.
Division 5—Fees rules for MySuper products
29V Fees that may be charged in relation to a MySuper product
(1) The trustee, or the trustees, of a regulated superannuation fund that offers a MySuper product may only charge fees of one or more of the following kinds in relation to that product:
(a) an administration fee;
(b) an investment fee;
(c) a buy‑sell spread;
(d) a switching fee;
(e) an exit fee;
(f) an activity fee;
(g) an advice fee;
(h) an insurance fee.
(2) An administration fee is a fee that relates to the administration or operation of a superannuation entity and includes costs incurred by the trustee, or the trustees, of the entity that:
(a) relate to the administration or operation of the fund; and
(b) are not otherwise charged as an investment fee, a buy‑sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
(3) An investment fee is a fee that relates to the investment of the assets of a superannuation entity and includes:
(a) fees in payment for the exercise of care and expertise in the investment of those assets (including performance fees); and
(b) costs incurred by the trustee, or the trustees, of the entity that:
(i) relate to the investment of assets of the entity; and
(ii) are not otherwise charged as an administration fee, a buy‑sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
(4) A buy‑sell spread is a fee to recover transaction costs incurred by the trustee, or the trustees, of a superannuation entity in relation to the sale and purchase of assets of the entity.
(5) A switching fee is a fee to recover the costs of switching all or part of a member’s interest in a superannuation entity from one class of beneficial interest in the entity to another.
(6) An exit fee is a fee to recover the costs of disposing of all or part of members’ interests in a superannuation entity.
(7) A fee is an activity fee if:
(a) the fee relates to costs incurred by the trustee, or the trustees, of a superannuation entity that are directly related to an activity of the trustee, or the trustees:
(i) that is engaged in at the request, or with the consent, of a member; or
(ii) that relates to a member and is required by law; and
(b) those costs are not otherwise charged as an administration fee, an investment fee, a buy‑sell spread, a switching fee, an exit fee, an advice fee or an insurance fee.
(8) A fee is an advice fee if:
(a) the fee relates directly to costs incurred by the trustee, or the trustees, of a superannuation entity because of the provision of financial product advice to a member by:
(i) a trustee of the entity; or
(ii) another person acting as an employee of, or under an arrangement with, a trustee or trustees of the entity; and
(b) those costs are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an insurance fee.
(9) A fee is an insurance fee if:
(a) the fee relates directly to either or both of the following:
(i) insurance premiums paid by the trustee, or the trustees, of a superannuation entity in relation to a member or members of the entity;
(ii) costs incurred by the trustee, or the trustees, of a superannuation entity in relation to the provision of insurance for a member or members of the entity; and
(b) the fee does not relate to any part of a premium paid or cost incurred in relation to a life policy or a contract of insurance that relates to a benefit to the member that is based on the performance of an investment rather than the realisation of a risk; and
(c) the premiums and costs to which the fee relates are not otherwise charged as an administration fee, an investment fee, a switching fee, an exit fee, an activity fee or an advice fee.
29VA Charging rules
(1) The trustee, or the trustees, of a regulated superannuation fund that offers a MySuper product may only charge a fee in relation to the MySuper product during a period if it satisfies one of the charging rules set out in this section in relation to that period.
All MySuper members charged same flat fee
(2) This rule is satisfied if:
(a) the fee is charged in relation to all members of the fund who hold the MySuper product; and
(b) the amount of the fee is the same for each of those members.
All MySuper members charged same percentage of account balance
(3) This rule is satisfied if:
(a) the fee is charged in relation to all members of the fund who hold the MySuper product; and
(b) the amount of the fee charged in relation to one member is a percentage of so much of the member’s account balance with the fund that relates to the MySuper product; and
(c) the amount of the fee charged in relation to each other member of the fund who holds the MySuper product is the same percentage of so much of that member’s account balance with the fund that relates to the MySuper product.
All MySuper members charged combination of same flat fee and same percentage of account balance
(4) This rule is satisfied if:
(a) the fee is charged in relation to all members of the fund who hold the MySuper product; and
(b) the amount of the fee charged in relation to one member is the sum of a fixed amount (the flat fee) and another amount that is a percentage of so much of the member’s account balance with the fund that relates to the MySuper product; and
(c) the amount of the fee charged in relation to each other member of the fund who holds the MySuper product is the sum of the flat fee and the same percentage of so much of that member’s account balance with the fund that relates to the MySuper product.
All MySuper members to whom action relates charged same flat fee
(5) This rule is satisfied if:
(a) the fee is a buy‑sell spread, a switching fee, an exit fee or an activity fee; and
(b) the fee is only charged in relation to those members of the fund:
(i) who hold the MySuper product; and
(ii) in relation to whom a relevant action is taken by the trustee or trustees of the fund; and
(c) the amount of the fee charged is the same for each member to whom it is charged.
All MySuper members to whom action relates charged same percentage of account balance
(6) This rule is satisfied if:
(a) the fee is a buy‑sell spread, a switching fee, an exit fee or an activity fee; and
(b) the fee is only charged in relation to those members of the fund:
(i) who hold the MySuper product; and
(ii) in relation to whom a relevant action is taken by the trustee or trustees of the fund; and
(c) the amount of the fee charged in relation to one of those members is a percentage of so much of the member’s account balance with the fund:
(i) that relates to the MySuper product; and
(ii) in relation to which the relevant action is taken; and
(d) the amount of the fee charged in relation to each of the other of those members is the same percentage of so much of that member’s account balance with the fund:
(i) that relates to the MySuper product; and
(ii) in relation to which the relevant action is taken.
All MySuper members to whom action relates charged combination of same flat fee and same percentage of account balance
(7) This rule is satisfied if:
(a) the fee is a buy‑sell spread, a switching fee, an exit fee or an activity fee; and
(b) the fee is only charged in relation to those members of the fund:
(i) who hold the MySuper product; and
(ii) in relation to whom a relevant action is taken by the trustee or trustees of the fund; and
(c) the amount of the fee charged in relation to one of those members is the sum of a fixed amount (the flat fee) and another amount that is a percentage of so much of the member’s account balance with the fund:
(i) that relates to the MySuper product; and
(ii) in relation to which the relevant action is taken; and
(d) the amount of the fee charged in relation to each of the other of those members is the sum of the flat fee and the same percentage of so much of that member’s account balance with the fund:
(i) that relates to the MySuper product; and
(ii) in relation to which the relevant action is taken.
Administration fee exemption for employees of an employer‑sponsor
(8) This rule is satisfied if:
(a) the fee is an administration fee charged in relation to one or more members of the fund who hold the MySuper product in accordance with the administration fee exemption for employees of an employee‑sponsor (see section 29VB); and
(b) in relation to those members of the fund who hold the MySuper product but in relation to whom the administration fee is not charged in accordance with the administration fee exemption for employees of an employee‑sponsor (the remaining members)—the fee would satisfy the charging rule in subsection (2), (3) or (4) if the remaining members were the only members of the fund who held the MySuper product.
Note: In some circumstances, the RSE licensee may wish to offer a MySuper product for the employees of a large employer or its associates (see sections 29T and 29TB). Any fee set for that MySuper product may differ from the equivalent fee set for another MySuper product within the fund. In other circumstances, a separate MySuper product may not be offered, but instead a lower administration fee charged to the employees of a particular employer‑sponsor (see section 29VB).
Lifecycle differentiated investment fees
(9) This rule is satisfied if:
(a) the fee is an investment fee; and
(b) the fee would satisfy one of the charging rules in subsections (2) to (4) if the rule were applied to an age cohort identified in the governing rules in relation to the MySuper product for the purposes of this subsection, rather than in relation to all members of the fund who hold the MySuper product; and
(c) the governing rules identify no more than 4 age cohorts in relation to the MySuper product for the purposes of this subsection; and
(d) the investment fees for the age cohorts reflect a fair and reasonable attribution of the investment costs of the fund between the age cohorts.
Advice fees
(9A) This rule is satisfied if:
(a) the fee is an advice fee that relates directly to financial product advice provided to a member; and
(b) the member holds a MySuper product; and
(c) the fee is charged to the member.
Insurance fees
(10) This rule is satisfied if:
(a) the fee is an insurance fee that relates directly to either or both of the following:
(i) insurance premiums paid by the trustee, or the trustees, of a superannuation entity in relation to a member;
(ii) costs incurred by the trustee, or the trustees, of a superannuation entity in relation to the provision of insurance for a member; and
(b) the member holds a MySuper product; and
(c) the fee is charged to the member.
29VB Administration fee exemption for employees of an employer‑sponsor
(1) An administration fee charged to members of a regulated superannuation fund who hold a MySuper product is charged in accordance with the administration fee exemption for employees of an employer‑sponsor if:
(aa) although the trustee, or the trustees, of the fund are authorised to offer the MySuper product, it is not on the basis that section 29TB was satisfied in relation to that class of beneficial interest in the fund; and
(a) the fee is charged in relation to all members of the fund who hold the MySuper product; and
(b) an employer‑sponsor contributes to the fund or would, apart from a temporary cessation of contributions, contribute to the fund for the benefit of those members of the fund (the employee members) who hold the MySuper product and who are:
(i) employees of the employer‑sponsor, or an associate of the employer‑sponsor; or
(ii) the relatives or dependants of those employees; and
(c) the trustee, or the trustees, of the fund have entered into an arrangement with the employer‑sponsor that secures lower administration fees for the employee members; and
(d) the fee is in accordance with subsection (2), (3) or (4); and
(e) the fee is in accordance with subsection (5).
All employees charged same flat fee
(2) The amount of the administration fee is the same for each of the employee members.
All employees charged same percentage of account balance
(3) Each of the following is satisfied:
(a) the amount of the administration fee charged in relation to one of the employee members is a percentage of so much of the member’s account balance with the fund that relates to the MySuper product;
(b) the amount of the administration fee charged in relation to each of the other employee members is the same percentage of so much of that member’s account balance with the fund that relates to the MySuper product.
All employees charged combination of same flat fee and same percentage of account balance
(4) Each of the following is satisfied:
(a) the amount of the administration fee charged in relation to one of the employee members is the sum of a fixed amount (the flat fee) and another amount that is a percentage of so much of the member’s account balance with the fund that relates to the MySuper product;
(b) the amount of the administration fee charged in relation to each of the other employee members is the sum of the flat fee and the same percentage of so much of that member’s account balance with that fund that relates to the MySuper product.
(5) The total amount of the administration fee charged in relation to the employee members is at least equal to an amount that reasonably relates to costs that:
(a) are incurred by the trustee, or the trustees, of the fund in the administration and operation of the fund in relation to those members; and
(b) are not otherwise charged as an investment fee, a buy‑sell spread, a switching fee, an exit fee, an activity fee, an advice fee or an insurance fee.
29VC Activity fees and insurance fees to be charged on a cost recovery basis
(1) If the trustee, or the trustees, of a regulated superannuation fund charge an activity fee or an insurance fee to a member in relation to a MySuper product, the fee must be no more than it would be if it were charged on a cost recovery basis.
(2) The regulations may prescribe the way in which an activity fee or an insurance fee charged on a cost recovery basis is to be worked out.
29VD Performance‑based fees
(1) This section applies if:
(a) a regulated superannuation fund offers a MySuper product; and
(b) the trustee, or the trustees, of the fund enter into an arrangement with an investment manager for the investment of an asset or assets of the fund attributed, in whole or in part, to the MySuper product; and
(c) under the arrangement, a fee payable to the investment manager is determined, in whole or in part, by reference to the performance of the investments made by the investment manager on behalf of the trustee or trustees of the fund (a performance‑based fee).
(2) The trustee, or the trustees, of the regulated superannuation fund must ensure that the arrangement complies with this section.
Base fee must be set or adjusted to give incentive to obtain performance‑based fee
(3) If, under the arrangement, a fee is or fees are payable to the investment manager in addition to the performance‑based fee, the other fee or fees must be set or adjusted so that they are lower than they would be if the arrangement did not include the performance‑based fee.
Period to which performance‑based fee relates
(4) The period over which entitlement to the performance‑based fee is determined under the arrangement must be appropriate to the kinds of investment to which the performance‑based fee relates.
Performance of investment must be measured against an appropriate benchmark
(5) Under the arrangement, the performance of the investment must be measured by comparison with the performance of investments of a similar kind.
Performance‑based fee to be worked out on after‑costs, after‑tax basis
(6) For the purposes of working out the performance‑based fee payable under the arrangement, the performance of the investment must be determined on an after‑costs and, where possible, an after‑tax basis.
Disincentives to underperformance
(7) Under the arrangement, the performance‑based fee must be calculated in a way that includes disincentives for poorly performing investments.
Best interests of MySuper members
(8) A trustee of a regulated superannuation fund does not breach this section to the extent that the asset or assets of the fund invested under the arrangement are attributed by the trustee or the trustees of the fund to a MySuper product if, despite the fact that the arrangement does not comply with one or more of the provisions of this section, the arrangement promotes the financial interests of the beneficiaries of the fund who hold the MySuper product.
29VE Percentage‑based administration fees may be capped
If, under the governing rules of a regulated superannuation fund:
(a) all or part of the administration fee in relation to a MySuper product is charged to those members of the fund who hold the product as a percentage of so much of the account balance of each of those members that relates to the MySuper product; and
(b) the amount of the administration fee is capped at a specified amount; and
(c) the cap is the same for all of those members; and
(d) but for the fact that the administration fee is capped in that way, a charging rule in section 29VA would be satisfied in relation to the administration fee;
that charging rule is taken to be satisfied in relation to the administration fee.
Division 6—Trustee obligations relating to MySuper
29VN Additional obligations of a trustee in relation to a MySuper product
Each trustee of a regulated superannuation fund that includes a MySuper product must:
(a) promote the financial interests of the beneficiaries of the fund who hold the MySuper product, in particular returns to those beneficiaries (after the deduction of fees, costs and taxes); and
(b) determine on an annual basis whether the beneficiaries of the fund who hold the MySuper product are disadvantaged, in comparison to the beneficiaries of other funds who hold a MySuper product within those other funds, because the financial interests of the beneficiaries of the fund who hold the MySuper product are affected:
(i) because the number of beneficiaries of the fund who hold the MySuper product is insufficient; or
(ii) because the number of beneficiaries of the fund is insufficient; or
(iii) where the assets of the fund that are attributed to the MySuper product are, or are to be, pooled with other assets of the fund or assets of another entity or other entities—because that pool of assets is insufficient; or
(iv) in a case to which subparagraph (iii) does not apply—because the assets of the fund that are attributed to the MySuper product are insufficient; and
(c) include in the investment strategy for the MySuper product the details of the trustee’s determination of the matters mentioned in paragraph (b); and
(d) include in the investment strategy for the MySuper product, and update each year:
(i) the investment return target over a period of 10 years for the assets of the fund that are attributed to the MySuper product; and
(ii) the level of risk appropriate to the investment of those assets.
29VO Additional obligations of a director of a corporate trustee in relation to a MySuper product
(1) Each director of a corporate trustee of a regulated superannuation fund that includes a MySuper product 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 29VN.
(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.
(3) A superannuation entity director is a person whose profession, business or employment is or includes acting as director of a corporate trustee of a superannuation entity and investing money on behalf of beneficiaries of the superannuation entity.
29VP Contravention of section 29VN
(1) A person must not contravene section 29VN.
(2) A contravention of subsection (1) is not an offence and a contravention of that subsection does not result in the invalidity of a transaction.
(3) A person who suffers loss or damage as a result of the conduct of another person that was engaged in in contravention of subsection (1) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(4) An action under subsection (3) may be begun at any time within 6 years after the day on which the cause of action arose.
29VPA Contravention of section 29VO
(1) A person must not contravene section 29VO.
(2) A contravention of subsection (1) is not an offence and a contravention of that subsection does not result in the invalidity of a transaction.
(3) A person who suffers loss or damage as a result of the conduct of another person that was engaged in in contravention of subsection (1) may, with the leave of the court, recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(4) A person may, within 6 years after the day on which the cause of action arose, seek the leave of the court to bring such an action.
(5) In deciding whether to grant leave to bring such an action, the court must take into account whether:
(a) the applicant is acting in good faith; and
(b) there is a serious question to be tried.
(6) The court may, in granting leave to bring such an action, specify a period within which the action may be brought.
29VQ Governing rules void to the extent that they are inconsistent with obligations under section 29VN or 29VO
A provision of the governing rules of a regulated superannuation fund is void to the extent that it is inconsistent with:
(a) the obligations that apply to a trustee of the fund under section 29VN; or
(b) if the trustee of the fund is a body corporate—the obligations that apply to the directors of the body corporate under section 29VO.
Division 7—Offences
29W Offering a product as a MySuper product 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 class of beneficial interest in a regulated superannuation fund is a MySuper product; and
(c) the RSE licensee for the fund does not have authority to offer a beneficial interest of that class in the fund as a MySuper product.
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.
29WA Contributions in relation to which no election is made are to be paid into MySuper product
(1) This section applies if:
(a) a person is a member of a regulated superannuation fund (other than a defined benefit member); and
(b) a contribution to the fund is made for the benefit of the person; and
(c) either:
(i) the person has not given the trustee, or the trustees, of the fund a direction that the contribution is to be invested under one or more specified investment options; or
(ii) the person has given the trustee, or the trustees, of the fund a direction that some of the contribution is to be invested under one or more specified investment options, but no such direction has been made in relation to the remainder of the contribution.
(2) The trustee, or trustees, of the fund must treat any contribution to the fund in relation to which no direction has been given, and any part of a contribution to the fund in relation to which no direction has been given, as a contribution to be paid into a MySuper product of the fund.
(3) A trustee commits an offence if the trustee contravenes subsection (2). This is an offence of strict liability.
Penalty: 50 penalty units.
Note 1: 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.
Note 2: For strict liability, see section 6.1 of the Criminal Code.
Directions
(4) For the purposes of this section, a direction that it is alleged was given to the trustee, or the trustees, of the fund after 31 March 2013 is taken not to have been given if:
(a) the direction was not given in writing; or
(b) a copy of the direction is not held by or on behalf of the trustee, or the trustees, of the fund.
(5) The regulations may prescribe circumstances in which a direction given to the trustee, or the trustees, of one regulated superannuation fund is to be taken to be a direction given to the trustee, or the trustees, of another regulated superannuation fund for the purposes of this section.
Exception—life policies, investment account contracts and cash investment options
(6) If an asset (or assets) attributed to the person mentioned in subsection (1) is invested in one or more of the following on 31 March 2013:
(a) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested;
(b) a life policy under which the benefit to the person (or a relative or dependant of the person) is based only on the realisation of a risk, not the performance of an investment;
(c) an investment account contract the only beneficiaries of which are the person, and relatives and dependants of the person;
(d) an investment option under which the investment is held as cash;
subsection (2) does not apply to the extent that a contribution to the fund for the benefit of the person is invested in the life policy, under the investment account contract or in the cash investment option.
29WB Contributions by large employer in relation to which no election is made to be paid into large employer MySuper product
(1) This section applies if:
(a) the trustee, or the trustees, of a regulated superannuation fund are authorised to offer a class of beneficial interest in the fund as a MySuper product on the basis that section 29TB is satisfied in relation to that class of beneficial interest; and
(b) a member (other than a defined benefit member) is entitled to hold the MySuper product; and
(c) a contribution is made for the benefit of the member; and
(d) either:
(i) the member has not given the trustee, or the trustees, of the fund a direction that the contribution is to be invested under one or more specified investment options; or
(ii) the member has given the trustee, or the trustees, of the fund a direction that some of the contribution is to be invested under one or more specified investment options, but no such direction has been made in relation to the remainder of the contribution.
(2) The trustee, or the trustees, of the fund must treat so much of the contribution in relation to which no direction is given as a contribution to be paid into the MySuper product.
(3) A trustee commits an offence if the trustee contravenes subsection (2). This is an offence of strict liability.
Penalty: 50 penalty units.
Note 1: 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.
Note 2: For strict liability, see section 6.1 of the Criminal Code.
Directions
(4) For the purposes of this section, a direction that it is alleged was given to the trustee, or the trustees, of the fund after 31 March 2013 is taken not to have been given if:
(a) the direction was not given in writing; or
(b) a copy of the direction is not held by or on behalf of the trustee, or the trustees, of the fund.
(5) The regulations may prescribe circumstances in which a direction given to the trustee, or the trustees, of one regulated superannuation fund is to be taken to be a direction given to the trustee, or the trustees, of another regulated superannuation fund for the purposes of this section.
Exception—life policies, investment account contracts and cash investment options
(6) If an asset (or assets) attributed to the member mentioned in subsection (1) is invested in one or more of the following on 31 March 2013:
(a) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested;
(b) a life policy under which the benefit to the member (or a relative or dependant of the member) is based only on the realisation of a risk, not the performance of an investment;
(c) an investment account contract the only beneficiaries of which are the member, and relatives and dependants of the member;
(d) an investment option under which the investment is held as cash;
subsection (2) does not apply to the extent that a contribution to the fund for the benefit of the member is invested in the life policy, under the investment account contract or in the cash investment option.
Division 8—Other matters
29X Prudential standards dealing with accrued default amounts
A prudential standard determined under section 34C may include provisions:
(a) requiring an RSE licensee of a regulated superannuation fund who holds an accrued default amount:
(i) for a member of the fund who is not eligible to hold a MySuper product offered by the fund; or
(ii) for a member of a regulated superannuation fund of the RSE licensee that does not offer a MySuper product;
to transfer that amount to another regulated superannuation fund that includes a MySuper product; and
(b) setting out the requirements that must be met in relation to the transfer of such an accrued default amount; and
(c) dealing with other matters relating to such an accrued default amount.
29XA Prudential standards dealing with assets attributed to former MySuper products
A prudential standard determined under section 34C may include provisions:
(a) requiring an RSE licensee who is authorised to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product to transfer any asset or assets of the fund that are attributed to the MySuper product into another MySuper product within the fund, or a MySuper product within another fund, if the authority is cancelled under subsection 29U(1); and
(b) setting out the requirements that must be met in relation to the transfer of such an asset or assets; and
(c) dealing with other matters relating to such an asset or assets.
29XB No liability for certain transfers
A trustee of a regulated superannuation fund is not subject to any liability to a member of the fund:
(a) for an action taken to give effect to an election made in accordance with section 29SAA or 29SAB; or
(b) for an action of the kind mentioned in subsection 55C(1).
29XC Public sector superannuation scheme ceases to be exempt
If APRA becomes aware that:
(a) a public sector superannuation scheme has ceased to be an exempt public sector superannuation scheme; and
(b) the scheme is not a regulated superannuation fund that offers a MySuper product;
APRA must notify the Fair Work Commission of that fact.
Part 3—Operating standards
Division 1—Object of Part
30 Object of Part
The object of this Part is to provide for a system of prescribed standards applicable to:
(a) the operation of regulated superannuation funds, approved deposit funds and pooled superannuation trusts; and
(b) the trustees and RSE licensees of those funds and trusts.
Division 2—Operating standards
31 Operating standards for regulated superannuation funds
(1) The regulations may prescribe standards applicable to the operation of regulated superannuation funds (funds) and to trustees and RSE licensees of those funds.
(2) The standards that may be prescribed include, but are not limited to, standards relating to the following matters:
(a) the persons who may contribute to funds;
(b) the vesting in beneficiaries in funds of benefits arising directly or indirectly from amounts contributed to the funds;
(c) the amount of contributions that a fund may accept;
(d) the circumstances in which a fund may accept contributions;
(da) the charging of fees (including the calculation of the amount of fees) to:
(i) members of a fund; and
(ii) members who hold a particular class of beneficial interest in a fund;
(db) the attribution of costs between classes of beneficial interest in a fund;
(e) the form in which benefits may be provided by funds;
(ea) the kinds of benefits that must not be provided by taking out insurance, or insurance of a particular kind;
(eb) the kinds of benefits that must not be provided other than by taking out insurance, or insurance of a particular kind;
(f) the actuarial standards that will apply to funds;
(g) the preservation of benefits arising directly or indirectly from amounts contributed to funds;
(h) the payment by funds of benefits arising directly or indirectly from amounts contributed to the funds;
(i) the portability of benefits arising directly or indirectly from amounts contributed to funds;
(j) the levels of benefits that may be provided by funds and the levels of assets that may be held by funds;
(k) the application by funds of money no longer required to meet payments of benefits to beneficiaries because the beneficiaries have ceased to be entitled to receive those benefits;
(l) the investment of assets of funds and the management of the investment;
(m) the number of trustees, and the composition of boards or committees of trustees, of funds;
(ma) the requirements relating to fitness and propriety for RSE licensees of funds and trustees of funds;
(n) the keeping and retention of records in relation to funds;
(o) the financial and actuarial reports to be prepared in relation to funds;
(p) the disclosure of information to beneficiaries in funds;
(pa) the disclosure of information by a trustee of a fund who is a member of a group of individual trustees to the other trustees in that group;
(q) the disclosure of information about funds to the Regulator;
(r) the disclosure of information about funds to persons other than beneficiaries or the Regulator;
(s) the financial position of funds;
(sa) the outsourcing arrangements relating to the operation of funds;
(sb) the adequacy of resources (including human resources, technical resources, and financial resources) of, or available to, trustees of funds;
(t) the funding and solvency of funds;
(u) the winding‑up of funds.
32 Operating standards for approved deposit funds
(1) The regulations may prescribe standards applicable to the operation of approved deposit funds (funds) and to trustees and RSE licensees of those funds.
(2) The standards that may be prescribed include, but are not limited to, standards relating to the following matters:
(a) the kinds of amounts that may be deposited with funds;
(aa) the circumstances in which amounts may be deposited with funds;
(b) the preservation of amounts deposited with funds, and of earnings on such amounts;
(c) the payment out of funds of amounts deposited with the funds, and of earnings on such amounts;
(d) the portability of amounts deposited with funds, and of earnings on such amounts;
(e) the form in which benefits may be paid out of funds;
(f) the investment of assets of funds and the management of the investment;
(fa) the requirements relating to fitness and propriety for RSE licensees of funds and trustees of funds;
(g) the keeping and retention of records in relation to funds;
(h) the financial and actuarial reports to be prepared in relation to funds;
(i) the disclosure of information to beneficiaries in funds;
(j) the disclosure of information about funds to the Regulator;
(k) the disclosure of information about funds to persons other than beneficiaries or the Regulator;
(l) the financial position of funds;
(la) the outsourcing arrangements relating to the operation of funds;
(lb) the adequacy of resources (including human resources, technical resources, and financial resources) of, or available to, trustees of funds;
(m) the funding and solvency of funds;
(n) the winding‑up of funds.
33 Operating standards for pooled superannuation trusts
(1) The regulations may prescribe standards applicable to the operation of pooled superannuation trusts (trusts) and to trustees and RSE licensees of those trusts.
(2) The standards that may be prescribed include, but are not limited to, standards relating to the following matters:
(aa) the circumstances in which units in trusts may be acquired;
(a) the ownership and disposal of units in trusts;
(b) the investment of assets of trusts and the management of the investment;
(ba) the requirements relating to fitness and propriety for RSE licensees of trusts and trustees of trusts;
(c) the persons who may be trustees of trusts;
(d) the number of trustees, and the composition of boards or committees of trustees, of trusts;
(e) the keeping and retention of records in relation to trusts;
(f) the financial and actuarial reports to be prepared in relation to trusts;
(g) the disclosure of information to unit‑holders in trusts;
(h) the disclosure of information about trusts to the Regulator;
(i) the disclosure of information about trusts to persons other than unit‑holders or the Regulator;
(j) the financial position of trusts;
(ja) the outsourcing arrangements relating to the operation of trusts;
(jb) the adequacy of resources (including human resources, technical resources and financial resources) of, or available to, trustees of trusts;
(k) the funding and solvency of trusts.
33A Relationship between operating standards, this Act and the regulations
(1) A standard applicable to the operation of a superannuation entity may be prescribed that elaborates, supplements or otherwise deals with any aspect of:
(a) a matter relating to the operation of the entity to which a covenant referred to in sections 52 to 53 or prescribed under section 54A relates; or
(b) a matter relating to the operation of the entity to which a provision of this Act or another provision of the regulations relates.
(2) However, a standard applicable to the operation of a superannuation entity is of no effect to the extent that it conflicts with this Act.
34 Prescribed operating standards must be complied with
Standards must be complied with
(1) Each trustee of a superannuation entity must ensure that the prescribed standards applicable to the operation of the entity are complied with at all times.
Note: Section 166 imposes an administrative penalty for a contravention of subsection (1) in relation to a self managed superannuation fund.
Offence
(2) A person who intentionally or recklessly contravenes subsection (1) is guilty of an offence punishable on conviction by a fine not exceeding 100 penalty units.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
Validity of transaction not affected by contravention of (1)
(3) A contravention of subsection (1) does not affect the validity of a transaction.
Division 3—Portability forms
34A Portability forms
(1) For the purposes of standards made under Division 2, and without limiting that Division, the regulations may prescribe a scheme under which:
(a) a beneficiary of:
(i) a regulated superannuation fund; or
(ii) an approved deposit fund;
gives to the Commissioner of Taxation a request for the benefits held for the beneficiary in the fund to be rolled‑over or transferred; and
(b) the Commissioner may pass the request on to the trustee of the fund.
Note: The standards may require the trustee to act on the request. See paragraphs 31(2)(i) and 32(2)(d).
(2) The regulations may provide that the request must be given to the Commissioner in the approved form.
Note: The approved form may require the beneficiary to set out his or her tax file number. See subsection 299U(2A).
Part 3A—Prudential standards
34B Object of this Part
The object of this Part is to provide for a system of standards in relation to prudential matters concerning registrable superannuation entities.
34C APRA may determine prudential standards
(1) APRA may determine (in writing) standards (prudential standards) relating to prudential matters that must be complied with by:
(a) all RSE licensees of registrable superannuation entities; or
(b) the connected entities of all RSE licensees of registrable superannuation entities; or
(c) a specified class of RSE licensees of registrable superannuation entities; or
(d) a specified class of connected entities of RSE licensees of registrable superannuation entities; or
(e) one or more specified RSE licensees of registrable superannuation entities; or
(f) one or more specified connected entities of RSE licensees of registrable superannuation entities.
(2) A prudential standard may impose different requirements to be complied with:
(a) by different classes of RSE licensees of registrable superannuation entities or connected entities of RSE licensees of registrable superannuation entities; or
(b) in different situations; or
(c) in respect of different activities.
(3) Without limiting the prudential matters in relation to which APRA may determine a prudential standard, a prudential standard may require the following entities to ensure that the entity’s connected entities (or particular connected entities), or the entity and the entity’s connected entities (or particular connected entities), collectively satisfy particular requirements:
(a) each RSE licensee of a registrable superannuation entity;
(b) each RSE licensee of a registrable superannuation entity included in a specified class of RSE licensees;
(c) a specified RSE licensee of a registrable superannuation entity;
(d) each of 2 or more RSE licensees of registrable superannuation entities.
(4) A prudential matter is a matter relating to:
(a) the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the registrable superannuation entity, or the affairs of a connected entity of the RSE licensee, in such a way as to:
(i) protect the interests of the beneficiaries of the registrable superannuation entity; or
(ii) meet the reasonable expectations of the beneficiaries of the registrable superannuation entity; or
(b) the conduct by a connected entity of an RSE licensee of a registrable superannuation entity of the affairs of the connected entity in such a way as to:
(i) protect the interests of the beneficiaries of the registrable superannuation entity; or
(ii) meet the reasonable expectations of the beneficiaries of the registrable superannuation entity; or
(c) the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the licensee in such a way as:
(i) to keep itself in a sound financial position; or
(ii) not to cause or promote instability in the Australian financial system; or
(d) the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the registrable superannuation entity in such a way as not to cause or promote instability in the Australian financial system; or
(e) the conduct by a connected entity of an RSE licensee of a registrable superannuation entity of the affairs of the connected entity in such a way as:
(i) to keep itself in a sound financial position; or
(ii) not to cause or promote instability in the Australian financial system; or
(f) the conduct by an RSE licensee of a registrable superannuation entity, or a connected entity of the RSE licensee, of any of its affairs that are relevant to the registrable superannuation entity with integrity, prudence and professional skill; or
(g) the appointment of auditors and actuaries; or
(h) the conduct of audits and actuarial investigations.
(5) The prudential standards may provide for APRA to exercise powers and discretions under the standards, including but not limited to discretions to approve, impose, adjust or exclude specific prudential requirements in relation to the following:
(a) a particular RSE licensee of a registrable superannuation entity;
(b) a particular connected entity of an RSE licensee of a registrable superannuation entity;
(c) specified RSE licensees of registrable superannuation entities;
(d) specified connected entities of RSE licensees of registrable superannuation entities.
(6) APRA may, in writing, vary or revoke a standard.
(7) A standard referred to in paragraph (1)(e) or (f), or a variation of a standard referred to in those paragraphs, comes into force on the later of:
(a) the day on which APRA satisfies subsection 34E(1) in relation to the standard or variation (obligation to give a copy to each RSE licensee and connected entity to which it applies); and
(b) if APRA includes with the copy of the standard or variation a notice that the standard or variation will come into force on a later day—that later day.
(8) The revocation of a standard referred to in paragraph (1)(e) or (f) comes into force on the later of:
(a) the day on which APRA satisfies subsection 34E(2) in relation to the revocation (obligation to give notice of the revocation to each RSE licensee or connected entity to which the standard relates); and
(b) the day specified in that notice as the day on which the revocation comes into force.
(9) The following instruments made under this section are not legislative instruments:
(a) a standard referred to in paragraph (1)(e) or (f);
(b) an instrument varying or revoking a standard referred to in paragraph (1)(e) or (f).
(10) Otherwise, an instrument made under this section is a legislative instrument.
34D Relationship between prudential standards, this Act and the regulations
(1) A prudential standard may be determined that elaborates, supplements or otherwise deals with any aspect of:
(a) a prudential matter to which a covenant referred to in sections 52 to 53 or prescribed under section 54A relates; or
(b) a prudential matter to which a provision of this Act or the regulations relates.
(2) However, a prudential standard is of no effect to the extent that it conflicts with this Act or the regulations.
34E Notice of determination, variation or revocation of certain prudential standards
(1) If APRA determines or varies a prudential standard referred to in paragraph 34C(1)(e) or (f), APRA must give a copy of the standard or of the variation to each RSE licensee and connected entity to which the standard applies.
(2) If APRA revokes a prudential standard referred to in paragraph 34C(1)(e) or (f), APRA must give notice of the revocation to each RSE licensee and connected entity to which the standard applies.
34F APRA to monitor prudential matters
The functions of APRA include:
(a) collecting and analysing information on prudential matters concerning RSE licensees of registrable superannuation entities and connected entities of RSE licensees of registrable superannuation entities; and
(b) encouraging and promoting the carrying out of sound practices in relation to prudential matters by RSE licensees of registrable superannuation entities and connected entities of RSE licensees of registrable superannuation entities; and
(c) evaluating the effectiveness and carrying out of those practices.
Part 3B—Superannuation data and payment regulations and standards
Division 1—Superannuation data and payment regulations and standards
34H Object of Part
(1) The object of this Part is to further the interests of beneficiaries of eligible superannuation entities by improving the productivity of the superannuation system.
(2) The Part does this by providing for a system of standards relating to payments and information connected with the operation of eligible superannuation entities.
34J Alternative constitutional basis
Without limiting its effect apart from this section, this Part also has the effect it would have if each reference to an employer were, by express provision, confined to an employer that is a corporation to which paragraph 51(xx) of the Constitution applies.
34K Superannuation data and payment regulations and standards
(1) The regulations may make provision for and in relation to superannuation data and payment matters, to be complied with by:
(a) trustees of eligible superannuation entities; and
(b) employers in their dealings with eligible superannuation entities.
(2) The regulations may prescribe different requirements for different classes of eligible superannuation entity or employer.
(3) The Commissioner of Taxation may, by legislative instrument, determine standards (superannuation data and payment standards) relating to superannuation data and payment matters, applicable to:
(a) trustees of eligible superannuation entities; and
(b) employers in their dealings with eligible superannuation entities.
Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.
(4) The superannuation data and payment standards may specify different requirements for different classes of eligible superannuation entity or employer.
(5) A superannuation data and payment matter is a matter relating to the manner in which payments and information of a kind mentioned in subsection (6):
(a) relating to:
(i) a member of an eligible superannuation entity; or
(ii) an employee for whose benefit a contribution to an eligible superannuation entity is to be made by an employer; and
(b) connected with the operation of the eligible superannuation entity;
are dealt with.
(6) The kinds of payments and information are:
(a) transactions, including payments, contributions, roll‑over superannuation benefits (within the meaning of the Income Tax Assessment Act 1997), allocations, transfers and refunds; and
(b) reports; and
(c) records, including registrations; and
(d) unique identifiers for use with such transactions, reports and records; and
(e) any other kind of payment or information that is prescribed by the regulations for the purposes of this paragraph; and
(f) to avoid doubt, any payment or information of a kind mentioned in paragraphs (a) to (e) and made or provided by the Commissioner of Taxation.
Adoption of other instruments
(7) The regulations or standards may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or writing:
(a) as in force or existing at a particular time; or
(b) as in force or existing from time to time.
(8) Subsection (7) has effect despite anything in subsection 14(2) of the Legislative Instruments Act 2003.
Consultations in preparing superannuation data and payment standards
(9) The Commissioner of Taxation must consult with APRA in preparing the superannuation data and payment standards.
Note: For further consultation requirements, see section 17 of the Legislative Instruments Act 2003.
(10) A failure to comply with subsection (9) does not affect the validity or enforceability of the superannuation data and payment standards.
34L Relationship between standards and other law
(1) A superannuation data and payment standard may elaborate on or supplement any aspect of regulations made under this Part.
(2) However, a superannuation data and payment standard is of no effect to the extent that it conflicts with this Act or the regulations.
Division 2—Compliance with superannuation data and payment regulations and standards
34M Compliance requirement—trustees of eligible superannuation entities
(1) Each trustee of an eligible superannuation entity must ensure that payments and information relating to a member of the eligible superannuation entity, or a person for whose benefit a contribution to the eligible superannuation entity is to be made, are dealt with in a manner that complies with any applicable:
(a) regulations made under this Part; and
(b) superannuation data and payment standards.
Note: Section 288‑110 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for contravention of this subsection.
Strict liability offence
(2) A person commits an offence of strict liability if the person contravenes subsection (1).
Penalty: 20 penalty units.
Note: For offences of strict liability, see subsection 6.1(1) of the Criminal Code.
(3) A contravention of subsection (1) does not affect the validity of a transaction.
34N Compliance requirement—employers
(1) An employer must deal with payments and information relating to an employee, for whose benefit a contribution to an eligible superannuation entity is to be made, in a manner that complies with any applicable:
(a) regulations made under this Part; and
(b) superannuation data and payment standards.
Note: Section 288‑110 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for contravention of this subsection.
Strict liability offence
(2) A person commits an offence of strict liability if the person contravenes subsection (1).
Penalty: 20 penalty units.
Note: For offences of strict liability, see subsection 6.1(1) of the Criminal Code.
(3) A contravention of subsection (1) does not affect the validity of a transaction.
34P Regulator’s power to give directions in certain circumstances—trustees of eligible superannuation entities
(1) The Regulator may give a trustee of an eligible superannuation entity a direction of a kind specified in subsection (4) if the Regulator reasonably believes that a trustee of the eligible superannuation entity has contravened, or is likely to contravene:
(a) a particular regulation made under this Part; or
(b) a particular superannuation data and payment standard.
(2) In deciding whether to give a direction, and deciding the content of the direction, the Regulator must take account of the following matters:
(a) the extent (if any) to which the eligible superannuation entity is operating in a way that is contrary to the object of this Part;
(b) any other matter that the Regulator considers relevant.
(3) The direction must be given by notice in writing to the trustee of the eligible superannuation entity.
(4) The kinds of direction that a trustee of an eligible superannuation entity may be given are directions to do any one or more of the following by a specified time:
(a) do a specified act that the Regulator considers is necessary to address the contravention mentioned in subsection (1) (or prevent the likely contravention mentioned in that subsection);
(b) refrain from doing an act, if the Regulator considers the refraining is necessary to address the contravention mentioned in subsection (1) (or prevent the likely contravention mentioned in that subsection).
(5) The time specified in the direction must be 21 days or more after the day the direction is given.
(6) The trustee of the eligible superannuation entity must ensure the direction is complied with by the specified time.
Note: Section 288‑110 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for contravention of this subsection.
Strict liability offence
(7) A person commits an offence of strict liability if the person contravenes subsection (6).
Penalty: 50 penalty units.
Note: For offences of strict liability, see subsection 6.1(1) of the Criminal Code.
(8) The Regulator may, by notice in writing to the trustee of the eligible superannuation entity, vary the direction or the time specified if, at the time of the variation, the Regulator considers that the variation is necessary and appropriate.
(9) The direction has effect until the Regulator revokes it by notice in writing to the trustee of the eligible superannuation entity. The Regulator may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.
34Q Regulator’s power to give directions in certain circumstances—employers
(1) The Regulator may give an employer a direction of a kind specified in subsection (4) if the Regulator reasonably believes that the employer has contravened, or is likely to contravene:
(a) a particular regulation made under this Part; or
(b) a particular superannuation data and payment standard.
(2) In deciding whether to give a direction, and deciding the content of the direction, the Regulator must take account of the following matters:
(a) the extent (if any) to which the employer is operating in a way that is contrary to the object of this Part;
(b) any other matter that the Regulator considers relevant.
(3) The direction must be given by notice in writing to the employer.
(4) The kinds of direction that the employer may be given are directions to do any one or more of the following by a specified time:
(a) do a specified act that the Regulator considers is necessary to address the contravention mentioned in subsection (1) (or prevent the likely contravention mentioned in that subsection);
(b) refrain from doing an act, if the Regulator considers the refraining is necessary to address the contravention mentioned in subsection (1) (or prevent the likely contravention mentioned in that subsection).
(5) The time specified in the direction must be 21 days or more after the day the direction is given.
(6) The employer must comply with the direction by the specified time.
Note: Section 288‑110 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for contravention of this subsection.
Strict liability offence
(7) A person commits an offence of strict liability if the person contravenes subsection (6).
Penalty: 50 penalty units.
Note: For offences of strict liability, see subsection 6.1(1) of the Criminal Code.
(8) The Regulator may, by notice in writing to the employer, vary the direction or the time specified if, at the time of the variation, it considers that the variation is necessary and appropriate.
(9) The direction has effect until the Regulator revokes it by notice in writing to the employer. The Regulator may revoke the direction if, at the time of revocation, it considers that the direction is no longer necessary or appropriate.
Division 3—Infringement notices
34R When an infringement notice may be given
(1) If the Regulator has reasonable grounds to believe that a person has contravened an offence of strict liability in Division 2, the Regulator may give to the person an infringement notice for the alleged contravention.
(2) The infringement notice must be given within 12 months after the day on which the contravention is alleged to have taken place.
(3) A single infringement notice may be given to a person in respect of:
(a) 2 or more alleged contraventions of an offence of strict liability in Division 2; and
(b) alleged contraventions of 2 or more offences of strict liability in Division 2.
34S Matters to be included in notice
(1) An infringement notice must:
(a) state the day on which it is given; and
(b) state the name of the person to whom it is given; and
(c) state the name of the person who gave the notice; and
(d) give brief details of the alleged contravention, including:
(i) the provision that was allegedly contravened; and
(ii) the maximum penalty that a court could impose for the contravention; and
(iii) the time (if known) and day of, and the place of, the alleged contravention; and
(e) state the amount that is payable under the notice; and
(f) give an explanation of how payment of the amount is to be made; and
(g) state that, if the person to whom the notice is given pays the amount within 28 days after the day the notice is given, then (unless the notice is withdrawn) the person is not liable to be prosecuted in a court in relation to the alleged contravention; and
(h) state that payment of the amount is not an admission of guilt or liability; and
(i) state that the person may apply to the Regulator to have the period in which to pay the amount extended; and
(j) state that the person may choose not to pay the amount and, if the person does so, the person may be prosecuted in a court in relation to the alleged contravention; and
(k) set out how the notice can be withdrawn; and
(1) state that if the notice is withdrawn:
(i) any amount paid under the notice must be refunded; and
(ii) the person may be prosecuted in a court for the alleged contravention; and
(m) state that the person may make written representations to the Regulator seeking the withdrawal of the notice.
(2) For the purposes of paragraph (1)(e), the amount to be stated in the notice for the alleged contravention of the provision must be equal to one‑fifth of the maximum penalty that a court could impose on the person for that contravention.
34T Extension of time to pay amount
(1) A person to whom an infringement notice has been given may apply to the Regulator for an extension of the period referred to in paragraph 34S(1)(g).
(2) If the application is made before the end of that period, the Regulator may, in writing, extend that period. The Regulator may do so before or after the end of that period.
(3) If the Regulator extends that period, a reference in this Division, or in a notice or other instrument under this Division, to the period referred to in paragraph 34S(1)(g) is taken to be a reference to that period as so extended.
(4) If the Regulator does not extend that period, a reference in this Division, or in a notice or other instrument under this Division, to the period referred to in paragraph 34S(1)(g) is taken to be a reference to the period that ends on the later of the following days:
(a) the day that is the last day of the period referred to in paragraph 34S(1)(g);
(b) the day that is 7 days after the day the person was given notice of the Regulator’s decision not to extend.
(5) The Regulator may extend the period more than once under subsection (2).
34U Withdrawal of an infringement notice
Representations seeking withdrawal of notice
(1) A person to whom an infringement notice has been given may, within 21 days after the day the notice is given, make written representations to the Regulator seeking the withdrawal of the notice.
Withdrawal of notice
(2) The Regulator may withdraw an infringement notice given to a person (whether or not the person has made written representations seeking the withdrawal).
(3) When deciding whether or not to withdraw an infringement notice (the relevant infringement notice), the Regulator:
(a) must take into account any written representations seeking the withdrawal that were given by the person to the Regulator; and
(b) may take into account the following:
(i) whether a court has previously imposed a penalty on the person for a contravention of an offence of strict liability in Division 2;
(ii) the circumstances of the alleged contravention;
(iii) whether the person has paid an amount, stated in an earlier infringement notice, for a contravention of an offence of strict liability in Division 2 if the contravention is constituted by conduct that is the same, or substantially the same, as the conduct alleged to constitute the contravention in the relevant infringement notice;
(iv) any other matter the Regulator considers relevant.
Notice of withdrawal
(4) Notice of the withdrawal of the infringement notice must be given to the person. The withdrawal notice must state:
(a) the person’s name and address; and
(b) the day the infringement notice was given; and
(c) that the infringement notice is withdrawn; and
(d) that the person may be prosecuted in a court in relation to the alleged contravention.
Refund of amount if infringement notice withdrawn
(5) If:
(a) the Regulator withdraws the infringement notice; and
(b) the person has already paid the amount stated in the notice;
the Commonwealth must refund to the person an amount equal to the amount paid.
34V Effect of payment of amount
(1) If the person to whom an infringement notice for an alleged contravention of a provision is given pays the amount stated in the notice before the end of the period referred to in paragraph 34S(1)(g):
(a) any liability of the person for the alleged contravention is discharged; and
(b) the person may not be prosecuted in a court for the alleged contravention; and
(c) the person is not regarded as having been convicted of the alleged offence; and
(d) the person is not regarded as having admitted guilt or liability for the alleged contravention.
(2) Subsection (1) does not apply if the notice has been withdrawn.
34W Effect of this Division
This Division does not:
(a) require an infringement notice to be given to a person for an alleged contravention of an offence of strict liability in Division 2; or
(b) affect the liability of a person for an alleged contravention of an offence of strict liability in Division 2 if:
(i) the person does not comply with an infringement notice given to the person for the contravention; or
(ii) an infringement notice is not given to the person for the contravention; or
(iii) an infringement notice is given to the person for the contravention and is subsequently withdrawn; or
(c) prevent the giving of 2 or more infringement notices to a person for an alleged contravention of an offence of strict liability in Division 2; or
(d) limit a court’s discretion to determine the amount of a penalty to be imposed on a person who is found to have contravened an offence of strict liability in Division 2.
Division 4—Information
Subdivision A—Correction and rectification of information
34X Correction and rectification of information
(1) The Commissioner of Taxation may alter information in his or her possession for the purposes of ensuring the information complies with:
(a) any applicable regulations made under this Part; and
(b) any applicable superannuation data and payment standards.
(2) An alteration made by the Commissioner of Taxation under subsection (1) does not have the effect of discharging any liability of a person for a contravention of a provision of this Part relating to the information.
Subdivision B—Register of information about certain funds and schemes
34Y Register of information about certain funds and schemes
(1) The Commissioner of Taxation must keep a register of information for the purposes of this Part.
(2) The Commissioner of Taxation is to keep the register by electronic means.
(3) The register is not a legislative instrument.
(4) The Commissioner of Taxation may cause the contents of all or part of the register to be made available to:
(a) entities that must comply with the superannuation data and payment regulations and standards; and
(b) entities that must comply with the data and payment regulations and standards relating to RSAs; and
(c) exempt public sector superannuation schemes.
Contents of the register
(5) The register must contain the information given to the Commissioner of Taxation in accordance with section 34Z.
(6) The trustee of an exempt public sector superannuation scheme may give the Commissioner of Taxation information that both:
(a) relates to the scheme; and
(b) is of the kind given to the Commissioner of Taxation in accordance with section 34Z.
The Commissioner of Taxation may include that information on the register.
34Z Trustees to provide information for inclusion in register
(1) The following matters may be prescribed by regulation:
(a) information that is required to be given to the Commissioner of Taxation in accordance with this section in relation to prescribed eligible superannuation entities;
(b) the manner and form (including electronic form) in which the prescribed information is to be provided;
(c) the time at which, or period within which, the prescribed information is to be provided.
(2) Each trustee of a prescribed eligible superannuation entity must ensure that the prescribed information in relation to the entity is given to the Commissioner of Taxation in accordance with the regulation.
Contravening requirement to give information
(3) A person commits an offence of strict liability if the person contravenes subsection (2).
Penalty: 25 penalty units.
Note: For offences of strict liability, see subsection 6.1(1) of the Criminal Code.
Part 4—Accounts, audit and reporting obligations for superannuation entities
Division 1—Objects
35 Objects of Part
The objects of this Part are:
(a) to set out rules about the accounts, statements and audits of superannuation entities; and
(b) to require certain reports and returns relating to superannuation entities to be given to the Regulator.
Division 2—Obligations for registrable superannuation entities
35A Accounting records
Accounting records must be kept etc.
(1) Each trustee of a registrable superannuation entity must ensure that:
(a) accounting records that correctly record and explain the transactions and financial position of the RSE licensee for the entity and the entity are kept; and
(b) the accounting records of the RSE licensee and the entity are kept in a way that enables:
(i) the preparation of reporting documents referred to in section 13 of the Financial Sector (Collection of Data) Act 2001; and
(ii) the preparation of any other documents required to be audited under the RSE licensee law; and
(c) the accounting records of the RSE licensee and the entity are kept in a way that enables those reporting documents and other documents to be conveniently and properly audited in accordance with the RSE licensee law.
(2) If accounting records of an RSE licensee or a registrable superannuation entity are kept in accordance with subsection (1), each trustee of the entity must ensure that:
(a) the records are retained for at least 5 years after the end of the year of income to which the transactions relate; and
(b) the records are kept either:
(i) in Australia; or
(ii) in another country if the Regulator gives written approval for the records to be kept in that country, and the conditions (if any) specified in the approval are met; and
(c) the records are kept:
(i) in writing in the English language; or
(ii) in a form in which they are readily accessible and readily convertible into writing in the English language.
(3) An approval given under subparagraph (2)(b)(ii) may be given subject to specified conditions.
Notification of address where accounting records are kept
(4) A trustee of a registrable superannuation entity must notify APRA, in the approved form, of the address where the accounting records of the RSE licensee and the entity are kept:
(a) if, immediately before the commencement of this subsection, APRA has not already been notified of the current address where the accounting records of the RSE licensee or the entity are kept—within 28 days after that commencement; or
(b) otherwise—within 28 days after the entity is registered under section 29M.
(5) If:
(a) a trustee of a registrable superannuation entity has notified APRA of the address where the accounting records of the RSE licensee and the entity are kept; and
(b) the entity moves the accounting records to a new address;
a trustee of the entity must notify APRA, in the approved form and within 28 days after the day on which the accounting records are moved to the new address, of the new address where the accounting records are kept.
Offences
(6) A trustee commits an offence if the trustee contravenes subsection (1), (2), (4) or (5).
Penalty: 100 penalty units.
(7) A trustee commits an offence of strict liability if the trustee contravenes subsection (1), (2), (4) or (5).
Penalty: 50 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
35AB Auditor requests for documents
(1) If the auditor of a registrable superannuation entity requests, in writing, a trustee of the entity to give the auditor a document, each trustee of the entity must ensure that the document is given to the auditor within 14 days of the request being made. An auditor may only request documents that are relevant to the preparation of a report about the operations of the entity or the RSE licensee of the entity.
(2) A trustee commits an offence if the trustee contravenes subsection (1).
Penalty: Imprisonment for 2 years.
(3) A trustee commits an offence of strict liability if the trustee contravenes subsection (1).
Penalty: 50 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
35AC Appointed auditor’s functions and duties
(1) This section applies if the RSE licensee law:
(a) requires an auditor of a registrable superannuation entity to be appointed; or
(b) requires or permits a function or duty to be performed, or a power to be exercised, by an auditor.
(2) The RSE licensee of the registrable superannuation entity must not appoint a person as an auditor of the entity unless the RSE licensee is reasonably satisfied that the person:
(a) meets the eligibility criteria for auditors of registrable superannuation entities set out in the prudential standards; and
(b) has not been disqualified from being or acting as an auditor of a registrable superannuation entity under section 130D.
(3) A person who is appointed as an auditor must perform the functions and duties set out in the RSE licensee law that are relevant to the person’s appointment.
(4) The appointed auditor must comply with the RSE licensee law in performing the functions and duties.
(5) The trustee of the registrable superannuation entity to whom the RSE licensee law applies must make any arrangements that are necessary to enable the appointed auditor to perform the functions and duties.
(6) The RSE licensee of the registrable superannuation entity must end the appointment of a person as an auditor of the entity if the RSE licensee becomes aware that the person:
(a) no longer meets the eligibility criteria for auditors of registrable superannuation entities set out in the prudential standards; or
(b) has been disqualified from being or acting as an auditor of a registrable superannuation entity under section 130D.
35AD Appointed actuary’s functions and duties
(1) This section applies if the RSE licensee law:
(a) requires an actuary of a registrable superannuation entity to be appointed; or
(b) requires or permits a function or duty to be performed, or a power to be exercised, by an actuary.
(2) The RSE licensee of a registrable superannuation entity must not appoint a person as an actuary of the entity unless the RSE licensee is reasonably satisfied that the person:
(a) meets the eligibility criteria for actuaries of registrable superannuation entities set out in the prudential standards; and
(b) has not been disqualified from being or acting as an actuary of a registrable superannuation entity under section 130D.
(3) A person who is appointed as an actuary must perform the functions and duties set out in the RSE licensee law that are relevant to the person’s appointment.
(4) The appointed actuary must comply with the RSE licensee law in performing the functions and duties.
(5) The trustee of the registrable superannuation entity to whom the RSE licensee law applies must make any arrangements that are necessary to enable the appointed actuary to perform the functions and duties.
(6) The RSE licensee of a registrable superannuation entity must end the appointment of a person as an actuary of the entity if the RSE licensee becomes aware that the person:
(a) no longer meets the eligibility criteria for actuaries of registrable superannuation entities set out in the prudential standards; or
(b) has been disqualified from being or acting as an actuary of a registrable superannuation entity under section 130D.
Division 3—Obligations for self managed superannuation funds
35AE Accounting records
Accounting records must be kept etc.
(1) Each trustee of a superannuation entity that is a self managed superannuation fund must ensure that:
(a) accounting records that correctly record and explain the transactions and financial position of the entity are kept; and
(b) the accounting records of the entity are kept in a way that enables the following to be prepared:
(i) the accounts and statements of the entity referred to in section 35B;
(ii) the returns of the entity referred to in section 35D; and
(c) the accounting records of the entity are kept in a way that enables those accounts, statements and returns to be conveniently and properly audited in accordance with this Act.
(2) If accounting records of a superannuation entity that is a self managed superannuation fund are kept in accordance with subsection (1), each trustee of the superannuation entity must ensure that:
(a) the records are retained for at least 5 years after the end of the year of income to which the transactions relate; and
(b) the records are kept in Australia; and
(c) the records are kept:
(i) in writing in the English language; or
(ii) in a form in which they are readily accessible and readily convertible into writing in the English language.
Offences
(3) A trustee commits an offence if the trustee contravenes subsection (1) or (2).
Penalty: 100 penalty units.
(4) A trustee commits an offence of strict liability if the trustee contravenes subsection (1) or (2).
Penalty: 50 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
35B Accounts and statements
(1) Each trustee of a superannuation entity that is a self managed superannuation fund must, in respect of each year of income of the fund, ensure that the following accounts and statements are prepared in respect of the entity:
(a) except where the regulations provide that this paragraph does not apply—a statement of financial position;
(b) except where the regulations provide that this paragraph does not apply—an operating statement;
(c) the accounts and statements specified in the regulations.
(2) The regulations may provide for or in relation to the preparation of accounts and statements covered by subsection (1). If the regulations do so, the accounts and statements covered by subsection (1) must be prepared in accordance with the regulations.
(3) The accounts and statements prepared in accordance with subsection (1) must be signed as follows:
(a) if there is a single corporate trustee—by:
(i) if there is only one director of the corporate trustee—that director; or
(ii) otherwise—at least 2 directors of the corporate trustee; or
(b) if there is a group of individual trustees—by at least 2 of those trustees.
(4) Each trustee must ensure that the accounts and statements prepared in accordance with subsection (1) are retained for a period of 5 years after the end of the year of income to which they relate.
(5) A person commits an offence if the person contravenes this section.
Penalty: 100 penalty units.
(6) A person commits an offence if the person contravenes this section. This is an offence of strict liability.
Penalty: 50 penalty units.
Note 1: For strict liability, see section 6.1 of the Criminal Code.
Note 2: Section 166 imposes an administrative penalty for a contravention of this section.
35C Audit of accounts and statements
(1) For each year of income, each trustee of a superannuation entity that is a self managed superannuation fund must ensure that an approved SMSF auditor is appointed to give the trustee or trustees a report, in the approved form, of the operations of the entity for that year. The appointment must be made within whichever of the periods set out in the regulations applies to the entity.
(2) If an auditor requests, in writing, a trustee of a superannuation entity that is a self managed superannuation fund to give the auditor a document, each trustee of the entity must ensure that the document is given to the auditor within 14 days of the request being made. Only documents that are relevant to the preparation of the report may be requested.
(3) A trustee commits an offence if the trustee contravenes subsection (1) or (2).
Penalty: Imprisonment for 2 years.
(4) A trustee commits an offence if the trustee contravenes subsection (1) or (2). This is an offence of strict liability.
Penalty: 50 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
(5) Without limiting subsection (1), an approved form:
(a) must either:
(i) relate solely to the audit of the accounts and statements referred to in subsection 35B(1) and prepared in respect of a year of income; or
(ii) relate only to the audit of those accounts and statements and of any other accounts and statements, prepared in respect of a year of income, that are identified in the form; and
(b) must include a statement by the auditor as to the extent of the auditor’s compliance with the auditor independence requirements referred to in paragraph 128F(d); and
(c) must include a statement by the auditor as to whether, in the auditor’s opinion, each trustee of the entity has, during the year of income, complied with the provisions of this Act and the regulations that are identified in the form.
(6) The auditor must give the report to each trustee of the entity within the prescribed period after the end of the year of income.
(8) The auditor commits an offence if the auditor contravenes subsection (6). This is an offence of strict liability.
Penalty: 50 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
35D Trustee to lodge annual returns
Lodgment
(1) Each trustee of a superannuation entity that was a self managed superannuation fund at any time during a year of income must, within the reporting period, or within such longer period as the Commissioner of Taxation allows, ensure that the Commissioner of Taxation is given a return under this section.
Period for lodgment
(2) The reporting period is the period that begins at the end of the year of income and whose length is:
(a) prescribed by the regulations for the purposes of this paragraph; or
(b) if the length of the period is not prescribed—specified, by legislative instrument, by the Commissioner of Taxation.
Form of return
(3) The return must:
(a) be in the approved form; and
(b) contain the information required by the form in relation to the fund in respect of that year of income or in relation to another year of income, or both.
Note: The approved form of return may require a trustee to set out the tax file number of the entity. See subsection 299U(2).
(4) A person commits an offence if the person contravenes this section.
Penalty: 50 penalty units.
(5) A person commits an offence if the person contravenes this section. This is an offence of strict liability.
Penalty: 25 penalty units.
Note: For strict liability, see section 6.1 of the Criminal Code.
Part 5—Notices about complying fund status
Division 1—Objects and interpretation
37 Objects of Part
The objects of this Part are:
(a) to provide for a system of notices about complying fund status in relation to a year of income (see Division 2); and
(b) to provide for those notices to be used to determine complying fund status for tax purposes (see Division 3).
38 Meaning of entity
In this Part:
entity means a fund, scheme or trust.
Division 2—The Regulator may give notices about complying fund status
38A Meaning of regulatory provision
In this Division:
regulatory provision, in relation to a superannuation entity, means:
(a) a provision of this Act or the regulations; or
(aa) a provision of the Financial Sector (Collection of Data) Act 2001; or
(ab) for a superannuation entity that is a self managed superannuation fund—any of the following provisions in Schedule 1 to the Taxation Administration Act 1953:
(i) subsections 284‑75(1) and (4) and section 284‑95;
(ii) Division 390; or
(b) any of the following provisions of the Corporations Act 2001 as applying in relation to financial products (within the meaning of Chapter 7 of that Act) that are interests in the superannuation entity:
(i) subsection 1013K(1) or (2);
(ii) subsection 1016A(2) or (3);
(iii) subsection 1017B(1);
(iv) subsection 1017C(2), (3) or (5);
(v) subsection 1017D(1);
(vi) subsection 1017DA(3);
(vii) subsection 1017E(3) or (4);
(viii) subsection 1020E(8) or (9);
(ix) subsection 1021C(1) or (3);
(x) subsection 1021D(1);
(xi) subsection 1021E(1);
(xii) subsection 1021O(1) or (3);
(xiii) section 1041E;
(xiv) subsection 1041F(1);
(xv) subsection 1043A(1) or (2);
(xvi) any other provisions that are specified in regulations made for the purposes of this subparagraph; or
(c) any of the following provisions of the Corporations Act 2001:
(i) subsection 1021NA(1), (2) or (3);
(ii) subsection 1021NB(1), (2) or (3);
(iii) subsection 1021NC(1), (2), (3) or (4).
39 Meaning of contravention
(1) For the purposes of this Division, a contravention of a regulatory provision is to be ignored unless the contravention is:
(a) an offence; or
(b) a contravention of a civil penalty provision; or
(c) a contravention of a provision mentioned in paragraph 38A(ab).
(1A) In relation to a regulatory provision that states that a person commits an offence if they engage, or fail to engage, in specified conduct, a person is, for the purposes of this Division, taken to contravene the provision if the person engages, or fails to engage, in that conduct.
(1B) To avoid doubt, for the purposes of this Division, treat conduct giving rise to an administrative penalty under subsection 284‑75(1) or (4) in Schedule 1 to the Taxation Administration Act 1953 as a contravention of that subsection.
(2) For the purposes of this Division, it is sufficient if a contravention is established on the balance of probabilities.
40 Notices by the Regulator to trustee
Notice about complying fund status
(1) The Regulator may give a written notice to a trustee of an entity stating:
(a) whether the entity is or is not a complying superannuation fund; or
(b) whether the entity is or is not a complying approved deposit fund; or
(c) whether the entity is or is not a pooled superannuation trust;
as the case may be, in relation to a year of income specified in the notice.
Reasons
(2) If the Regulator gives a notice to a trustee of an entity stating that:
(a) the entity is not a complying superannuation fund; or
(b) the entity is not a complying approved deposit fund; or
(c) the entity is not a pooled superannuation trust;
as the case may be, in relation to a year of income, the notice must set out the reasons why the Regulator so stated.
Commissioner of Taxation to be told about notice
(3) When the APRA gives a notice under this section, APRA must give particulars of the notice to the Commissioner of Taxation.
Note: A statement of the tax file number of the entity may accompany the particulars of the notice. See subsection 299U(3).
Revocation
(4) If:
(a) the Regulator gives a notice under this section (the original notice) to a trustee of an entity stating that:
(i) the entity is a complying superannuation fund; or
(ii) the entity is a complying approved deposit fund; or
(iii) the entity is a pooled superannuation trust;
as the case may be, in relation to a year of income; and
(b) the Regulator subsequently gives a notice under this section (the second notice) to a trustee of the entity stating that:
(i) the entity is not a complying superannuation fund; or
(ii) the entity is not a complying approved deposit fund; or
(iii) the entity is not a pooled superannuation trust;
as the case may be, in relation to the year of income;
the second notice is taken to revoke the original notice.
Note: Because “the Regulator” is whichever of APRA or the Commissioner of Taxation is administering this provision in respect of a fund, a notice could initially be given to a fund by APRA under paragraph 40(4)(a), and later the Commissioner of Taxation could give a notice to the same fund under paragraph 40(4)(b). This is because the fund could have become a self managed superannuation fund after the first notice was given.
41 When the Regulator obliged to give notice of compliance
(1) Except as provided by subsection (2), the Regulator is not obliged to give a notice under section 40.
(2) The Regulator must give a notice under section 40 to a trustee of an entity stating that the entity is a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust, as the case may be, in relation to a year of income (the current year of income) if:
(a) the entity is a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust, as the case requires, in relation to the current year of income; and
(b) either:
(i) the Regulator has not given a notice to a trustee of the entity under section 40 stating that the entity is a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust, as the case requires, in relation to a previous year of income; or
(ii) both:
(A) the Regulator has given a notice to a trustee of the entity under section 40 stating that the entity is not a complying superannuation fund, is not a complying approved deposit fund or is not a pooled superannuation trust, as the case requires, in relation to a previous year of income; and
(B) the Regulator has not given a notice to a trustee of the entity under section 40 stating that the fund is a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust, as the case requires, in relation to a year of income that is later than that previous year of income and earlier than the current year of income.
(3) Despite section 2, a previous year mentioned in subsection (2) may be a year of income earlier than the 1994‑95 year of income (see section 49). However, despite section 49, for the purposes of the application of subsection (2) to a complying superannuation fund, if the fund was not a regulated superannuation fund at all times during the current year of income when the fund was in existence, paragraph (2)(b) does not apply unless the previous year of income is the 1994‑95 year of income or a later year of income.
(4) For the purposes of this section, if a notice under section 40 is revoked, or the decision to give the notice is set aside, the notice is taken never to have been given.
42 Complying superannuation fund
(1) An entity is a complying superannuation fund in relation to a year of income for the purposes of this Division if:
(a) either:
(i) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence; or
(ii) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence other than a time, before it became a resident regulated superannuation fund, when the entity was a resident approved deposit fund; and
(b) either of the following conditions is satisfied:
(i) no trustee of the entity contravened any of the regulatory provisions in relation to the entity in respect of the year of income;
(ii) both:
(A) a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of the year of income on one or more occasions; and
(B) the entity did not fail the culpability test set out in subsection (1A) in relation to any of those contraventions; and
(c) the entity was not a self managed superannuation fund at any time during the year of income.
(1AA) An entity is also a complying superannuation fund in relation to the 1994‑95 year of income or a later year of income if:
(a) the entity:
(i) is a superannuation fund that came into existence during the year of income; or
(ii) was a resident approved deposit fund that became a superannuation fund during the year of income; and
(b) the entity complied with subsections 19(2) to (4):
(i) within 60 days after the day on which it came into existence or became a superannuation fund, as the case may be; or
(ii) within such further period, if any, as APRA (whether before or after the end of the period of 60 days) allows; and
(c) either of the following conditions is satisfied:
(i) no trustee of the entity contravened any of the regulatory provisions in relation to the entity in respect of the whole of the period (the pre‑lodgment period) that began when the entity came into existence or became a superannuation fund, as the case may be, and ended when the entity complied with subsections 19(2) to (4);
(ii) a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of the pre‑lodgment period on one or more occasions but APRA is satisfied that, because of special circumstances that existed in relation to the fund during the pre‑lodgment period, it would be reasonable for the fund to be treated as if it had satisfied the regulatory provisions; and
(d) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the end of the pre‑lodgment period; and
(da) the entity was not a self managed superannuation fund at any time during the year of income; and
(e) either of the conditions stated in paragraph (1)(b) is satisfied in relation to the entity in respect of the part of the year of income occurring after the end of the pre‑lodgment period.
(1AB) In determining for the purpose of paragraph (1AA)(c) whether any of the regulatory provisions were contravened in respect of the entity in respect of the pre‑lodgment period, the regulatory provisions are taken to have applied in relation to the entity in respect of that period as if the entity were a resident regulated superannuation fund during that period.
(1AC) An entity is also a complying superannuation fund in relation to the 1994‑95 year of income or a later year of income if:
(a) the trustee, or the trustees, of the entity have purported to make an election under subsection 19(4); and
(b) the requirements of subsections 19(2) to (4) (to the extent that they have not already been complied with) are complied with within 28 days after a trustee of the entity finds out (whether by written notice from APRA or otherwise) that they were not complied with, or within such further period, if any, as APRA (whether before or after the end of the period of 28 days) allows; and
(c) except where a trustee of the entity received written notice from APRA about the non‑compliance—a trustee of the entity tells APRA in writing of the compliance within 7 days after the requirements are complied with or within such further period, if any, as APRA (whether before or after the end of the period of 7 days) allows; and
(d) either of the following conditions is satisfied:
(i) no trustee of the entity contravened any of the regulatory provisions in relation to the entity in respect of the whole of the period (the rectification period) that began when the trustee, or the trustees, of the entity lodged the purported election under subsection 19(4) and ended when the entity complied with subsections 19(2) to (4);
(ii) a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of the rectification period on one or more occasions but APRA is satisfied that, because of special circumstances that existed in relation to the fund during the rectification period, it would be reasonable for the fund to be treated as if it had satisfied the regulatory provisions; and
(e) if the fund was in existence before the beginning of its 1994‑95 year of income—under regulations made for the purposes of section 50, the fund is treated as if it had satisfied the transitional superannuation fund conditions at all times during the period that began at the beginning of the fund’s 1994‑95 year of income and ended when the trustee, or the trustees, of the entity lodged the purported election under subsection 19(4); and
(f) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the end of the rectification period; and
(fa) the entity was not a self managed superannuation fund at any time during the year of income; and
(g) either of the conditions stated in paragraph (1)(b) is satisfied in relation to the entity in respect of the part of the year of income occurring after the end of the rectification period.
(1AD) In determining for the purpose of paragraph (1AC)(d) whether any of the regulatory provisions were contravened in respect of the entity in respect of the rectification period, the regulatory provisions are taken to have applied in relation to the entity in respect of that period as if the entity were a resident regulated superannuation fund during that period.
Note: Subsection 50(2) provides that certain superannuation funds that have been wound up or terminated are taken to have been complying superannuation funds before the winding up or termination.
(1A) For the purposes of subparagraph (1)(b)(ii), an entity fails the culpability test in relation to a particular contravention of a regulatory provision if:
(a) both:
(i) all of the members of the entity were in any way directly or indirectly knowingly concerned in, or party to, the contravention; and
(ii) the Regulator, after considering:
(A) the taxation consequences that would arise if the entity were to be treated as a non‑complying superannuation fund for the purposes of the Income Tax Assessment Act 1997 in relation to the year of income concerned; and
(B) the seriousness of the contravention; and
(C) all other relevant circumstances;
thinks that a notice should be given stating that the entity is not a complying superannuation fund in relation to the year of income concerned; or
(b) all of the following conditions are satisfied:
(i) one or more members of the entity were in any way directly or indirectly knowingly concerned in, or party to, the contravention;
(ii) one or more members of the entity (the innocent members) were not in any way directly or indirectly knowingly concerned in, or party to, the contravention;
(iii) none of the innocent members would suffer any substantial financial detriment if the entity were to be treated as a non‑complying superannuation fund for the purposes of the Income Tax Assessment Act 1997 in relation to the year of income concerned;
(iv) the Regulator, after considering:
(A) the taxation consequences that would arise if the entity were to be treated as a non‑complying superannuation fund for the purposes of the Income Tax Assessment Act 1997 in relation to the year of income concerned; and
(B) the seriousness of the contravention; and
(C) all other relevant circumstances;
thinks that a notice should be given stating that the entity is not a complying superannuation fund in relation to the year of income concerned.
Note: The culpability test is still relevant to a fund that has been a self managed fund during only part of a year of income—see subparagraph 42A(2)(b)(ii), paragraph 42A(3)(g) and subparagraph 42A(4)(f)(ii).
(1B) For the purposes of subsection (1A), if there is a question whether a person was in any way directly or indirectly knowingly concerned in, or party to, a particular contravention, that question may be decided on the balance of probabilities.
(2) In this section, a reference to a member of an entity means, if the entity is an approved deposit fund, a beneficiary of the fund.
(3) If a person or body is specified in the regulations for the purposes of subsection 19(4), a reference to APRA in subparagraph (1AA)(b)(ii) or (c)(ii) or subsection (1AC) of this section is taken to be a reference to that person or body.
42A Complying superannuation fund—fund that has been a self managed superannuation fund at any time during a year
Entity that was a self managed superannuation fund throughout a year of income
(1) An entity that was a self managed superannuation fund at all times during a year of income is a complying superannuation fund in relation to that year of income for the purposes of this Division if:
(a) either:
(i) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence; or
(ii) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence other than a time, before it became a resident regulated superannuation fund, when the entity was a resident approved deposit fund; and
(b) the entity passes the test in subsection (5) in relation to the year of income.
Entity that was a self managed superannuation fund during only part of a year of income
(2) An entity that was a self managed superannuation fund during a part or parts of a year of income is a complying superannuation fund in relation to that year of income for the purposes of this Division if:
(a) either:
(i) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence; or
(ii) the entity was a resident regulated superannuation fund at all times during the year of income when the entity was in existence other than a time, before it became a resident regulated superannuation fund, when the entity was a resident approved deposit fund; and
(b) both:
(i) the entity passes the test in subsection (5) in respect of the part or parts of the year of income during which the entity was a self managed superannuation fund; and
(ii) if a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of any other part or parts of the year of income—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions.
Funds coming into existence during year of income etc.
(3) An entity that:
(a) is a superannuation fund that came into existence during the year of income and at that time or later in the year of income became a self managed superannuation fund; or
(b) was a resident approved deposit fund that became a superannuation fund during the year of income;
is also a complying superannuation fund in relation to the year of income if:
(c) the entity complied with subsections 19(2) to (4):
(i) within 60 days after the day on which it came into existence or became a superannuation fund, as the case may be; or
(ii) within such further period, if any, as APRA (whether before or after the end of the period of 60 days) allows; and
(d) either of the following conditions is satisfied:
(i) no trustee of the entity contravened any of the regulatory provisions in relation to the entity during the whole of the period (the pre‑lodgment period) that began when the entity came into existence or became a superannuation fund, as the case may be, and ended when the entity complied with subsections 19(2) to (4);
(ii) a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity during the pre‑lodgment period on one or more occasions but APRA is satisfied that, because of special circumstances that existed in relation to the fund during the pre‑lodgment period, it would be reasonable for the fund to be treated as if it had satisfied the regulatory provisions; and
(e) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the pre‑lodgment period; and
after the pre‑lodgment period:
(f) the entity passed the test in subsection (5) in respect of the part or parts of the year of income, occurring after the pre‑lodgment period, during which the entity was a self managed superannuation fund; and
(g) if a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of any part or parts of the year of income, occurring after the pre‑lodgment period, during which the entity was not a self managed superannuation fund—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions.
Trustee makes an election
(4) An entity that was a self managed superannuation fund at some time, or at all times, during a year of income is also a complying superannuation fund in relation to the year of income if:
(a) the trustee, or the trustees, of the entity have purported to make an election under subsection 19(4); and
(b) if, when the election was made, the requirements of subsections 19(2) to (4) are not complied with:
(i) the requirements of subsections 19(2) to (4) (to the extent that they have not already been complied with) are complied with within 28 days after a trustee of the entity finds out (whether by written notice from APRA or otherwise) that they were not complied with, or within such further period, if any, as APRA (whether before or after the end of the period of 28 days) allows; and
(ii) except where a trustee of the entity received written notice from APRA about the non‑compliance—a trustee of the entity tells APRA in writing of the compliance within 7 days after the requirements are complied with or within such further period, if any, as APRA (whether before or after the end of the period of 7 days) allows; and
(c) either of the following conditions is satisfied:
(i) no trustee of the entity contravened any of the regulatory provisions in relation to the entity during the whole of the period (the rectification period) that began when the trustee, or the trustees, of the entity lodged the purported election under subsection 19(4) and ended when the entity complied with subsections 19(2) to (4);
(ii) a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity during the rectification period on one or more occasions but APRA is satisfied that, because of special circumstances that existed in relation to the fund during the rectification period, it would be reasonable for the fund to be treated as if it had satisfied the regulatory provisions; and
(d) if the fund was in existence before the beginning of its 1994‑95 year of income—under regulations made for the purposes of section 50, the fund is treated as if it had satisfied the transitional superannuation fund conditions at all times during the period that began at the beginning of the fund’s 1994‑95 year of income and ended when the trustee, or the trustees, of the entity lodged the purported election under subsection 19(4); and
(e) the entity was a resident regulated superannuation fund at all times during the part of the year of income occurring after the end of the rectification period; and
(f) in respect of the part of the year of income occurring after the end of the rectification period, both:
(i) the entity passed the test in subsection (5) in respect of the part or parts of the year of income occurring after the end of the rectification period, during which the entity was a self managed superannuation fund; and
(ii) if a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity in respect of any other part or parts of the year of income occurring after the end of the rectification period, during which the entity was not a self managed superannuation fund—the entity did not fail the culpability test set out in subsection 42(1A) in relation to any of those contraventions.
Circumstances in which entity passes the test in this subsection
(5) An entity passes the test in this subsection in relation to a year of income or part of a year of income if:
(a) no trustee of the entity contravened any of the regulatory provisions in relation to the entity during the year of income or the part of the year of income; or
(b) if a trustee of the entity contravened one or more of the regulatory provisions in relation to the entity during the year of income or the part of the year of income, the Regulator, after considering:
(i) the taxation consequences that would arise if the entity were to be treated as a non‑complying superannuation fund for the purposes of the Income Tax Assessment Act 1997 in relation to the year of income concerned; and
(ii) the seriousness of the contravention or contraventions; and
(iii) all other relevant circumstances;
thinks that a notice should nevertheless be given stating that the entity is a complying superannuation fund in relation to the year of income concerned.
Determining whether contravention
(6) In determining for the purposes of this section whether any of the regulatory provisions were contravened in respect of the entity in respect of the pre‑lodgment period or the rectification period, the regulatory provisions are taken to have applied in relation to the entity in respect of that period as if the entity were a resident regulated superannuation fund during that period.
References to APRA
(7) If a person or body is specified in the regulations for the purposes of subsection 19(4), a reference to APRA in subparagraph (3)(c)(ii), (3)(d)(ii), or subsection (4) is taken to be a reference to that person or body.
43 Complying approved deposit fund
An entity is a complying approved deposit fund in relation to a year of income for the purposes of this Division if:
(a) at all times during the year of income when the entity was in existence, the entity was a resident approved deposit fund; and
(b) any of the following conditions is satisfied:
(i) the trustee did not contravene any of the regulatory provisions in relation to the entity in respect of the year of income;
(ii) both:
(A) the trustee contravened one or more of the regulatory provisions in relation to the entity in respect of the year of income on one or more occasions; and
(B) each contravention was rectified within a period of 30 days after the trustee became aware of the contravention or within such further period as APRA allows;
(iii) both:
(A) the trustee contravened one or more of the regulatory provisions in relation to the entity in respect of the year of income on one or more occasions; and
(B) APRA is satisfied that the seriousness or frequency, or both, of the contraventions does not warrant the giving of a notice stating that the entity is not a complying approved deposit fund in relation to the year of income;
(iv) APRA, after considering all relevant circumstances, thinks that a notice should be given stating that the entity is a complying approved deposit fund in relation to the year of income.
44 Pooled superannuation trust
An entity is a pooled superannuation trust in relation to a year of income for the purposes of this Division if:
(a) at all times during the year of income when the entity was in existence, the entity was a pooled superannuation trust; and
(b) any of the following conditions is satisfied:
(i) the trustee did not contravene any of the regulatory provisions in relation to the entity in respect of the year of income;
(ii) both:
(A) the trustee contravened one or more of the regulatory provisions in relation to the entity in respect of the year of income on one or more occasions; and
(B) each contravention was rectified within a period of 30 days after the trustee became aware of the contravention or such further period as APRA allows;
(iii) both:
(A) the trustee contravened one or more of the regulatory provisions in relation to the entity in respect of the year of income on one or more occasions; and
(B) APRA is satisfied that the seriousness or frequency, or both, of the contraventions does not warrant the giving of a notice stating that the entity is not a pooled superannuation trust in relation to the year of income;
(iv) APRA, after considering all relevant circumstances, thinks that a notice should be given stating that the entity is a pooled superannuation trust in relation to the year of income.
Division 3—Complying fund status for tax purposes
45 Complying superannuation fund
(1) A fund is a complying superannuation fund for the purposes of the Income Tax Assessment Act in relation to a year of income (the current year of income) if, and only if:
(a) the Regulator has given a notice to a trustee of the fund under section 40 stating that the fund is a complying superannuation fund in relation to the current year of income; or
(b) the Regulator has given a notice to a trustee of the fund under section 40 stating that the fund is a complying superannuation fund in relation to a previous year of income and has not given a notice to a trustee of the fund under that section stating that the fund was not a complying superannuation fund in relation to:
(i) the current year of income; or
(ii) a year of income that is:
(A) later than that previous year of income; and
(B) earlier than the current year of income.
(2) Despite section 2, the previous year mentioned in paragraph (1)(b) may be a year of income earlier than the 1994‑95 year of income (see section 49). However, despite section 49, if the fund was not a regulated superannuation fund at all times during the current year of income when the fund was in existence, paragraph (1)(b) does not apply unless the previous year of income is the 1994‑95 year of income or a later year of income.
(3) For the purposes of this section, if a notice under section 40 is revoked, or the decision to give the notice is set aside, the notice is taken never to have been given.
(4) Section 170 of the Income Tax Assessment Act does not prevent the amendment of an assessment at any time for the purposes of giving effect to subsection (3).
(5) For the purposes of this section, if a notice under section 40 is given in relation to a fund in relation to a year of income, the notice is taken to have been given at the beginning of the year of income.
(6) Despite subsection (1), if, at all times during a year of income when a fund was in existence, the fund was, or was part of, an exempt public sector superannuation scheme, the fund is a complying superannuation fund in relation to the year of income for the purposes of the Income Tax Assessment Act.
46 Complying superannuation scheme—superannuation guarantee charge
An exempt public sector superannuation scheme is taken to be a complying superannuation scheme for the purposes of the Superannuation Guarantee (Administration) Act 1992.
47 Complying approved deposit fund
(1) A fund is a complying approved deposit fund for the purposes of the Income Tax Assessment Act in relation to a year of income (the current year of income) if, and only if:
(a) APRA has given a notice to the trustee under section 40 stating that the fund is a complying approved deposit fund in relation to the current year of income; or
(b) APRA has given a notice to the trustee under section 40 stating that the fund is a complying approved deposit fund in relation to a previous year of income and has not given a notice to the trustee under that section stating that the fund was not a complying approved deposit fund in relation to:
(i) the current year of income; or
(ii) a year of income that is:
(A) later than that previous year of income; and
(B) earlier than the current year of income.
(2) Despite section 2, the previous year mentioned in paragraph (1)(b) may be a year of income earlier than the 1994‑95 year of income (see section 49).
(3) For the purposes of this section, if a notice under section 40 is revoked, or the decision to give the notice is set aside, the notice is taken never to have been given.
(4) Section 170 of the Income Tax Assessment Act does not prevent the amendment of an assessment at any time for the purposes of giving effect to subsection (3).
(5) For the purposes of this section, if a notice under section 40 is given in relation to a fund in relation to a year of income, the notice is taken to have been given at the beginning of the year of income.
48 Pooled superannuation trust
(1) A unit trust is a pooled superannuation trust for the purposes of the Income Tax Assessment Act in relation to a year of income (the current year of income) if, and only if:
(a) APRA has given a notice to the trustee under section 40 stating that the trust is a pooled superannuation trust in relation to the current year of income; or
(b) APRA has given a notice to the trustee under section 40 stating that the trust is a pooled superannuation trust in relation to a previous year of income and has not given a notice to the trustee under that section stating that the trust was not a pooled superannuation trust in relation to:
(i) the current year of income; or
(ii) a year of income that is:
(A) later than that previous year of income; and
(B) earlier than the current year of income.
(2) Despite section 2, the previous year mentioned in paragraph (1)(b) may be a year of income earlier than the 1994‑95 year of income (see section 49).
(3) For the purposes of this section, if a notice under section 40 is revoked, or the decision to give the notice is set aside, the notice is taken never to have been given.
(4) Section 170 of the Income Tax Assessment Act does not prevent the amendment of an assessment at any time for the purposes of giving effect to subsection (3).
(5) For the purposes of this section, if a notice under section 40 is given in relation to a trust in relation to a year of income, the notice is taken to have been given at the beginning of the year of income.
49 Transitional—notices under the repealed provisions of the Occupational Superannuation Standards Act 1987
Superannuation funds—positive
(1) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under repealed section 12 or 13 of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is satisfied that:
(i) a fund satisfied the superannuation fund conditions in relation to a year of income; or
(ii) a fund should be treated as if it had satisfied the superannuation fund conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the fund is a complying superannuation fund in relation to the year of income.
ADFs—positive
(2) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under repealed section 14 or 15 of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is satisfied that:
(i) a fund satisfied the approved deposit fund conditions in relation to a year of income; or
(ii) a fund should be treated as if it had satisfied the approved deposit fund conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the fund is a complying approved deposit fund in relation to the year of income.
PSTs—positive
(3) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under repealed section 15B or 15C of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is satisfied that:
(i) a trust satisfied the pooled superannuation trust conditions in relation to a year of income; or
(ii) a trust should be treated as if it had satisfied the pooled superannuation trust conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the trust is a pooled superannuation trust in relation to the year of income.
Superannuation funds—negative
(4) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under the repealed section 12 or 13 of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is not satisfied that a fund satisfied the superannuation fund conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the fund is not a complying superannuation fund in relation to the year of income.
ADFs—negative
(5) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under the repealed section 14 or 15 of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is not satisfied that a fund satisfied the approved deposit fund conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the fund is not a complying approved deposit fund in relation to the year of income.
PSTs—negative
(6) For the purposes of paragraph 41(2)(b) and this Division, if:
(a) a notice under the repealed section 15B or 15C of the Occupational Superannuation Standards Act 1987 stated that the Commissioner is not satisfied that a trust satisfied the pooled superannuation trust conditions in relation to a year of income; and
(b) the year of income is the 1993‑94 year of income or an earlier year of income;
the notice has effect as if it were a notice under section 40 stating that the trust is not a pooled superannuation trust in relation to the year of income.
OSSA—continued operation
(7) A reference in this section to a provision of the Occupational Superannuation Standards Act 1987 includes a reference to that provision as it continues to apply, despite its repeal, because of the Occupational Superannuation Standards Amendment Act 1993.
50 Transitional—late lodgment of elections by trustees of superannuation funds
28 days late
(1) For the purposes of subsection 41(3), paragraph 42(1)(a) and subsection 45(2), if:
(a) on a particular day (the lodgment day), the trustee, or the trustees, of a superannuation fund have lodged or lodge an election under section 19; and
(b) the lodgment day was or is after 28 July 1994; and
(c) the Regulator is satisfied that this subsection should apply in relation to the fund; and
(d) the trustee, or the trustees, of the fund have complied with such requirements relating to notifying members of the fund about:
(i) the delay in lodging the election; and
(ii) the reasons for the delay;
as are set out in regulations made for the purposes of this paragraph; and
(e) under the regulations, the fund is treated as if it had satisfied the transitional superannuation fund conditions at all times during the period (the pre‑lodgment period):
(i) beginning at the beginning of the fund’s 1994‑95 year of income; and
(ii) ending at the end of the lodgment day;
the fund is taken to be a regulated superannuation fund at all times during the pre‑lodgment period.
(2) For the purposes of this Part, if:
(a) a superannuation fund is wound up or terminated; and
(b) the winding up or termination is completed on a particular day (the termination day); and
(c) the termination day is before a day named by the Regulator in a written notice given to a trustee of the fund for the purposes of this paragraph; and
(d) the trustee, or the trustees, of the fund told the Regulator in writing before the commencement of this subsection that they:
(i) did not intend to lodge an election under section 19 in respect of the fund; and
(ii) intended to take advantage of the subsection (4A) that, immediately before 1 July 1996, was taken to be inserted in this section by a declaration made under subsection 333(1); and
(e) the trustee, or the trustees, have complied with such requirements relating to notifying members and prospective members of the fund that:
(i) the fund would be wound up or terminated; and
(ii) the trustee, or trustees, of the fund intended to take advantage of the subsection (4A) mentioned in subparagraph (d)(ii);
as were set out in regulations made for the purposes of that subsection (4A); and
(f) as soon as practicable after the termination day, a trustee of the fund tells the Regulator in writing that the winding up or termination of the fund had been completed; and
(g) under the regulations, the fund is treated as if it had satisfied the transitional superannuation fund conditions at all times during the period (the pre‑termination period):
(i) beginning at the beginning of the fund’s 1994‑95 year of income; and
(ii) ending at the end of the termination day;
the fund is taken to have been a complying superannuation fund at all times during the pre‑termination period.
Regulations may apply OSS system
(5) Regulations made for the purposes of paragraph (1)(e) or (2)(g) may:
(a) confer functions or powers on the Regulator; and
(b) make provision for or in relation to a matter by applying, adopting or incorporating, with such modifications as are prescribed, the provisions, or the repealed provisions, of:
(i) the Occupational Superannuation Standards Act 1987; or
(ii) regulations made for the purposes of section 7 of that Act;
(including those provisions as they continue to apply, despite their repeal, because of the Occupational Superannuation Standards Amendment Act 1993).
Section 14 of the Legislative Instruments Act 2003
(6) Subsection (5) of this section does not limit the application of section 14 of the Legislative Instruments Act 2003 to regulations made for the purposes of this section.
Part 6—Provisions relating to governing rules of superannuation entities
51 Object of Part
The object of this Part is to set out rules about the content of the governing rules of superannuation entities.
51A Covenants are cumulative
To avoid doubt, each covenant referred to in sections 52 to 53 or prescribed under section 54A, and each obligation referred to in sections 29VN and 29VO, that applies to a trustee of a superannuation entity, or a director of a corporate trustee of a superannuation entity, applies in addition to every other covenant or obligation referred to in those sections that applies to the trustee or director.
52 Covenants to be included in governing rules—registrable superannuation entities
Governing rules taken to contain covenants
(1) If the governing rules of a registrable superannuation entity do not contain covenants to the effect of the covenants set out in this section, those governing rules are taken to contain covenants to that effect.
General covenants
(2) The covenants referred to in subsection (1) include the following covenants by each trustee of the entity:
(a) to act honestly in all matters concerning the entity;
(b) to exercise, in relation to all matters affecting the entity, the same degree of care, skill and diligence as a prudent superannuation trustee would exercise in relation to an entity of which it is trustee and on behalf of the beneficiaries of which it makes investments;
(c) to perform the trustee’s duties and exercise the trustee’s powers in the best interests of the beneficiaries;
(d) where there is a conflict between the duties of the trustee to the beneficiaries, or the interests of the beneficiaries, and the duties of the trustee to any other person or the interests of the trustee or an associate of the trustee:
(i) to give priority to the duties to and interests of the beneficiaries over the duties to and interests of other persons; and
(ii) to ensure that the duties to the beneficiaries are met despite the conflict; and
(iii) to ensure that the interests of the beneficiaries are not adversely affected by the conflict; and
(iv) to comply with the prudential standards in relation to conflicts;
(e) to act fairly in dealing with classes of beneficiaries within the entity;
(f) to act fairly in dealing with beneficiaries within a class;
(g) to keep the money and other assets of the entity separate from any money and assets, respectively:
(i) that are held by the trustee personally; or
(ii) that are money or assets, as the case may be, of a standard employer‑sponsor, or an associate of a standard employer‑sponsor, of the entity;
(h) not to enter into any contract, or do anything else, that would prevent the trustee from, or hinder the trustee in, properly performing or exercising the trustee’s functions and powers;
(i) if there are any reserves of the entity—to formulate, review regularly and give effect to a strategy for their prudential management, consistent with the entity’s investment strategies and its capacity to discharge its liabilities (whether actual or contingent) as and when they fall due;
(j) to allow a beneficiary of the entity access to any prescribed information or any prescribed documents.
Superannuation trustee
(3) In paragraph (2)(b), a superannuation trustee is a person whose profession, business or employment is or includes acting as a trustee of a superannuation entity and investing money on behalf of beneficiaries of the superannuation entity.
Obligations to beneficiaries override obligations under certain other Acts
(4) The obligations of the trustee under paragraph (2)(d) override any conflicting obligations an executive officer or employee of the trustee has under:
(a) Part 2D.1 of the Corporations Act 2001; or
(b) Subdivision A of Division 3 of Part 2‑2 of the Public Governance, Performance and Accountability Act 2013 (which deals with general duties of officials) or any rules made for the purposes of that Subdivision.
Trustee not prevented from engaging or authorising persons to act on trustee’s behalf
(5) A covenant referred to in paragraph (2)(h) does not prevent the trustee from engaging or authorising persons to do acts or things on behalf of the trustee.
Investment covenants
(6) The covenants referred to in subsection (1) include the following covenants by each trustee of the entity:
(a) to formulate, review regularly and give effect to an investment strategy for the whole of the entity, and for each investment option offered by the trustee in the entity, having regard to:
(i) the risk involved in making, holding and realising, and the likely return from, the investments covered by the strategy, having regard to the trustee’s objectives in relation to the strategy and to the expected cash flow requirements in relation to the entity; and
(ii) the composition of the investments covered by the strategy, including the extent to which the investments are diverse or involve the entity in being exposed to risks from inadequate diversification; and
(iii) the liquidity of the investments covered by the strategy, having regard to the expected cash flow requirements in relation to the entity; and
(iv) whether reliable valuation information is available in relation to the investments covered by the strategy; and
(v) the ability of the entity to discharge its existing and prospective liabilities; and
(vi) the expected tax consequences for the entity in relation to the investments covered by the strategy; and
(vii) the costs that might be incurred by the entity in relation to the investments covered by the strategy; and
(viii) any other relevant matters;
(b) to exercise due diligence in developing, offering and reviewing regularly each investment option;
(c) to ensure the investment options offered to each beneficiary allow adequate diversification.
Insurance covenants
(7) The covenants referred to in subsection (1) include the following covenants by each trustee of the entity:
(a) to formulate, review regularly and give effect to an insurance strategy for the benefit of beneficiaries of the entity that includes provisions addressing each of the following matters:
(i) the kinds of insurance that are to be offered to, or acquired for the benefit of, beneficiaries;
(ii) the level, or levels, of insurance cover to be offered to, or acquired for the benefit of, beneficiaries;
(iii) the basis for the decision to offer or acquire insurance of those kinds, with cover at that level or levels, having regard to the demographic composition of the beneficiaries of the entity;
(iv) the method by which the insurer is, or the insurers are, to be determined;
(b) to consider the cost to all beneficiaries of offering or acquiring insurance of a particular kind, or at a particular level;
(c) to only offer or acquire insurance of a particular kind, or at a particular level, if the cost of the insurance does not inappropriately erode the retirement income of beneficiaries;
(d) to do everything that is reasonable to pursue an insurance claim for the benefit of a beneficiary, if the claim has a reasonable prospect of success.
Covenants relating to risk
(8) The covenants referred to in subsection (1) include the following covenants by each trustee of the entity:
(a) to formulate, review regularly and give effect to a risk management strategy that relates to:
(i) the activities, or proposed activities, of the trustee, to the extent that they are relevant to the exercise of the trustee’s powers, or the performance of the trustee’s duties and functions, as trustee of the entity; and
(ii) the risks that arise in operating the entity;
(b) to maintain and manage in accordance with the prudential standards financial resources (whether capital of the trustee, a reserve of the entity or both) to cover the operational risk that relates to the entity.
52A Covenants relating to directors to be included in governing rules—registrable superannuation entities
Governing rules taken to contain covenants
(1) If the governing rules of a registrable superannuation entity of which a trustee is a body corporate do not contain covenants to the effect of the covenants set out in subsection (2), those governing rules are taken to contain covenants to that effect.
The covenants
(2) The covenants referred to in subsection (1) are the following covenants by each director of a corporate trustee of the entity:
(a) to act honestly in all matters concerning the entity;
(b) to exercise, in relation to all matters affecting the entity, the same degree of care, skill and diligence as a prudent superannuation entity director would exercise in relation to an entity where he or she is a director of the trustee of the entity and that trustee makes investments on behalf of the entity’s beneficiaries;
(c) to perform the director’s duties and exercise the director’s powers as director of the corporate trustee in the best interests of the beneficiaries;
(d) where there is a conflict between the duties of the director to the beneficiaries, or the interests of the beneficiaries, and the duties of the director to any other person or the interests of the director, the corporate trustee or an associate of the director or corporate trustee:
(i) to give priority to the duties to and interests of the beneficiaries over the duties to and interests of other persons; and
