Recent developments

Welcome to the December technical roundup, an update on reforms and announcements for the month of November. During November, FASEA released a consultation paper seeking feedback on the amendment of Standard 3 of the Financial Planner and Adviser Code of Ethics 2019. Other items of note include the introduction of a bill to Parliament which includes a new retirement income covenant, requiring superannuation trustees (excluding SMSFs) to develop a retirement income strategy for their members who are retired or approaching retirement.


Retirement income covenant, ESS and more

On 25 November 2021, the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 (Cth) was introduced to Parliament.

The Bill primarily focuses on the introduction of a new corporate collective investment vehicle (CCIV), which is a new type of company limited by shares that will be used for funds management.

The Bill also contains the following measures relevant to the financial services industry.

Retirement income covenant

A new covenant will require trustees of superannuation funds (excluding SMSFs) to develop a retirement income strategy for members who are retired or approaching retirement, from 1 July 2022.

The retirement income strategy will outline the trustee’s plan to assist members who are retired or approaching retirement to achieve and balance the following objectives:

  • maximise their members’ retirement income;
  • manage risks to the sustainability and stability of their retirement income; and
  • have flexible access to funds during retirement.

Deferred taxing point for employee share schemes (ESS)

Under the current arrangements, when an employee leaves an employer, their ESS entitlements under a deferred tax arrangement may become taxable.

The Bill removes the cessation of employment taxing point for ESS interests and instead defers the taxing point to the earliest of:

  • when the risk of forfeiture is removed, and the employee can sell the shares/rights, or
  • 15 years after the acquisition of the shares/rights.

This measure will apply on or after the beginning of the financial year starting after Royal Assent, or if the Bill receives Royal Assent on 1 July, the ESS interest for which the ESS deferred taxing point occurs on or after that 1 July.

Temporary loss carry back rules extension

Under the current arrangements, eligible companies can utilise tax losses from the 2019/20, 2020/21 and 2021/22 financial years to offset previously taxed profits from the 2018/19 financial year.

If passed, this carry back rule will be extended by 12 months, allowing eligible companies to claim the loss carry back tax offset for the 2022/23 financial year.

Legislative instruments

Your Future Your Super – portfolio disclosure update

On 11 November 2021, the Government announced that it had released Corporations Amendment (Portfolio Holdings Disclosure) Regulations 2021, which support the portfolio disclosure regime under the Your Future, Your Super Reforms.

Under the regulations, superannuation funds will be required to report their holdings to members by 31 March 2022, and then 6-monthly thereafter.          

The Government has also engaged the Council of Financial Regulators to prepare a report on the extent and nature of the use of derivatives by superannuation funds, and any implications that could arise from the use of derivatives on the financial system.


In-house assets relief measures

On 23 September 2021, the ATO announced several relief measures, which will be available to SMSF trustees in the 2019/20 and 2020/21 financial years due to the impacts of the COVID-19 pandemic.  One of these measures is where an SMSF provided COVID-19 rental relief in a form of a reduction, waiver or deferral to a tenant and the relief measure resulted in a contravention of super laws, the ATO will not take any compliance action provided:

  • the relief was offered on commercial terms (having regard to State and Territory COVID-19 support measures) due to the financial impacts of COVID-19; and
  • the arrangement was properly documented.

Following the announcement, the ATO released a draft determination on 22 November 2021 that ensures rental deferrals offered by a SMSF to a tenant do not cause a loan or investment to be considered an in-house asset in the 2021/22 or later financial years.

The consultation period closes on 17 December 2021.

Consultation paper

Code of Ethics – Standard 3 consultation

On 3 November 2021, FASEA released a Consultation Paper seeking feedback on the wording of Standard 3 of the Financial Planners and Advisers Code of Ethics 2019.

Currently the standard states: You must not advise, refer or act in any other manner where you have a conflict of interest or duty.

In the consultation paper, three options are put forward:

  1. Incorporate FASEA’s intent into the Standard You must only advise, refer or act where you do not have a conflict of interest or duty, being that which could reasonably be expected to induce you to act other than in the client’s best interest.
  2. Align to Commissioner Hayne’s findings

    You must not receive any benefit (whether monetary or non-monetary), nor enter into any relationship, that could reasonably be expected to influence the advice you give or the service you provide to your client

  3. Retain existing wording.

The consultation period closed on 1 December 2021.


Consumer remediation guidance

On 17 November 2021, ASIC released Consultation Paper 350: Consumer remediation: Further consultation (CP350) for further feedback.

The paper proposes several changes to ASIC’s guidance on how client remediation should be conducted by Australian Financial Services Licensees, Australian Credit Licensees and Retirement Savings Account providers

The consultation period will close on 11 February 2022.


Prudential framework for insurance in super

On 12 November 2021, APRA announced that it had released its final revisions to requirements and guidance relating to insurance in superannuation.

The final revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250) and accompanying practice guide are aimed at ensuring better outcomes for its members through updated requirements for trustees to select, manage and monitor members’ insurance arrangements.

SPS250 will require trustees to:

  • strengthen arrangements to protect members from potential adverse outcomes caused by conflicted life insurance arrangements. This will include robust decision-making in the negotiation and ongoing review of insurance arrangements;
  • obtain an independent certification of related party insurance arrangements before entering into, or materially altering, an insurance arrangement, and on a triennial basis. Trustees must be alert to any business practices or terms and conditions in insurance arrangements that may not be in the best financial interests of beneficiaries; and
  • strengthen data management to improve analysis of member outcomes across different groups of superannuation fund members.

The enhancements to SPS250 will commence on 1 July 2022.

Government announcements

Director IDs now available

On 1 November 2021, the Government announced that company directors can now apply for their director identification numbers (director ID) on the Australian Business Registry Services (ABRS) website.

The unique 15-digit identifier will stay with the director for life, offering greater identify security and it allows directors to move between different roles, businesses, and countries, whilst keeping the same director ID.

The deadline to apply for a director ID depends on the date the individual becomes a director. Below is a summary of the deadlines:

Date of appointment


On or before 31 October 2021

30 November 2021

Between 1 November 2021 and 4 April 2022

Within 28 days of appointment

From 5 April 2022

Before appointment


Review of AFCA

On 24 November 2021, the Government announced the release of its final report of the AFCA review, and the Government’s response.

The review makes 14 recommendations, of which 13 are directed to AFCA in the areas of:

resolution of complaints in a fair, independent, efficient and timely manner;

  • jurisdiction;
  • funding and fee structures;
  • accountability; and
  • transparency in reporting of systemic issues and membership requirements.

The review makes one recommendation directed to the Government, which is to remove the legislative requirement for authorised credit representatives to be members of AFCA. This would bring the membership requirements to be in line with authorised representatives of Australian Financial Services Licensees, who aren’t required to be members.

Regulator views


Record of Advice (ROA) guidance

On 5 November 2021, ASIC announced that it had released Information Sheet 266: FAQs: Record of Advice (INFO266) which provide clarity to financial advisers and advice licensees on their obligations to provide a ROA when providing personal advice to retail clients.

The information sheet includes examples and answers to frequently asked questions about ROAs, including their usage, preparation and record keeping.  The document also explains four exemptions from providing a Statement of Advice (SOA) and covers the meaning of ‘significantly different’ (under the law) when providing personal advice in a further advice situation.


Tips for giving limited advice

On 1 December 2021, ASIC released an information sheet on limited advice (INFO267) and an example SOA to help advice providers comply with their legal obligations, including best interests duty and the Financial Planners and Advisers Code of Ethics, when giving limited advice to retail clients.

The information sheet also summarises relevant guidance from Regulatory Guide 175 ‘Licensing: Financial product advisers – Conduct and disclosure’ and Regulatory Guide 244 ‘Giving information, general advice and scaled advice’.


Super members urged to prioritise own best interest

On 10 November 2021, APRA urged superannuation members who are in MySuper products that failed the performance test to more actively engage with their superannuation funds to maximise their retirement futures.

APRA highlighted that from the one million superannuation members who are in the 13 MySuper products which failed the performance test on 31 August 2021, fewer than 68,000 accounts have been closed. That accounts for 7% of total accounts in the failed products or 4.2% ($2.2 billion) of assets.

APRA also noted that the ATO’s YourSuper comparison tool and the release of its first Choice Product Heatmap next month could assist consumers in making an informed decision about their super.



New platform to improve dispute resolution

On 19 November 2021, AFCA announced the release of a new platform to help financial firms to better manage disputes that reach the ombudsman service.

The new interactive platform provides near real-time complaints data, which is updated daily and provides companies with a greater understanding of their complaints. This platform also enables firms to compare their performance against its peers (anonymised set of similar financial firms). 

The platform will be released to AFCA members in phases during November and December.


New CPE policy

On 30 November 2021, the TPB announced the release of its new continuing professional education (CPE) policy which will commence from 1 July 2022.

Below are some of the key changes include:

  • tax agents should complete a minimum of 120 hours of CPE over a 3-year period (increased from 90 hours over a 3-year period);
  • BAS agents should complete a minimum of 90 hours of CPE over a 3-year period (increased from 45 hours over a 3-year period);
  • both tax and BAS agents should complete a minimum of 20 hours of CPE each year (increased from 10 hours per year for tax agents and 5 hours per year for BAS agents);
  • if you are a member of a recognised professional association (e.g. FPA), you will be able to align your CPE period with the CPE period of your professional association. This means that you can elect to have your CPE period based on a financial year or a calendar year;
  • members are allowed to complete health and well-being activities of up to 10% of the required CPE hours;
  • reducing the CPE record keeping requirement from 6 years to 5 years; and
  • inclusion of family/caring commitments as exceptional circumstances for not being able to complete the minimum CPE hours.

Additional information

This information is provided by Macquarie Investment Management Limited (MIML) ABN 66 002 867 003 AFSL 237 492. MIML is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MIML’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.  Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML.

This information is provided for the use of financial services professionals only.  In no circumstances is it to be used by a potential investor or client for the purposes of making a decision about a financial product or class of products.

The information provided is not personal advice. It does not take into account the investment objectives, financial situation or needs of any particular investor and should not be relied upon as advice.  Any examples are illustrations only and any similarities to any readers’ circumstances are purely coincidental. 

While the information provided here is given in good faith and is believed to be accurate and reliable as at the date of preparation, 1 December 2021, it is provided by MIML for information only.  It does not constitute legal advice and should not be relied upon as such. MIML will not be liable for any losses arising from reliance on this information.

MIML does not give, nor purport to give, any taxation advice. The application of taxation laws to each client depends on that client’s individual circumstances.  Accordingly, clients should seek independent professional advice on taxation implications before making any decisions about a financial product or class of products.

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