Recent developments

Welcome to the May technical roundup, an update of the reforms and announcements for the month of April. During April, the Prime Minister announced the date of the election (21 May 2022) and resultant proroguing of the Parliament. The Government is now in caretaker mode and all bills and other business matters introduced to Parliament will need to be reintroduced to the next Parliament.  

Other items of note include ASIC’s release of a legislative instrument which provides an exemption to the financial adviser qualification requirements for existing advice providers meeting certain criteria (e.g. on a career break).  

Legislative developments


Changes to Pension Loan Scheme

On 1 April 2022, the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Act 2021 (Cth) received Royal Assent.

The Act amends the Social Security Act 1991 (Cth) and the Veterans’ Entitlements Act 1985 (Cth) to implement the 2021-22 Budget proposal measure to increase the flexibility of the Pension Loans Scheme (PLS).  The key changes include:

No negative equity guarantee

The introduction of a no negative equity guarantee to the PLS. From 1 July 2022, PLS participants will not be required to repay more than their actual equity in the property used to secure the loan.

Lump sum advance payments

From 1 July 2022, participants will be able to access an advance lump sum payment of no more than 50% of the maximum annual rate of pension.  Participants can also access up to two advances over a 26-fortnight period, where the second advance is reduced by the value of the first.

Legislative instruments

Regulations to halve minimum pension for 2022-23

On 31 March 2022, the Government registered the Superannuation Legislation Amendment (Superannuation Drawdown) Regulations 2022 which extends the temporary 50 per cent reduction to the minimum superannuation income payment for account based pension and other pensions by another year, to include the 2022-23 financial year.

Financial adviser qualification exemption

On 31 March 2022, ASIC released the ASIC Corporations (Existing Providers) Instrument 2022/241 which addresses an unintended prohibition on Australian Financial Services (AFS) Licensees from authorising existing advice providers to provide personal advice to retail clients.

The instrument provides exemptions to the qualification requirements (e.g. attain an approved degree), which will allow an AFS Licensee to authorise an existing advice provider to provide personal advice to retail client, provided that they have passed the adviser exam and will meet the qualification requirements by 1 January 2026.

An example of an individual who may qualify for the exemption is an existing adviser who commenced a career break in August 2020 and concluded their break in March 2022. Prior to the instrument, the adviser would have to meet the qualification requirements for a new entrant. However, with the introduction of the exemption, the adviser would only be required to pass the adviser exam, and will be required to meet the qualification requirements by 1 January 2026.  

Regulator views


Surveillance of super investment switching

On 6 April 2022, ASIC announced that it had written to 23 superannuation trustees outlining their concerns about deficiencies in their conflicts management arrangements relating to investment switching, and requesting they take steps to improve their internal policies and procedures.

ASIC noted that those trustees have committed to implementing a range of changes to better manage their conflicts, including:

  • updating and establishing policies and practices to address the deficiencies highlighted by ASIC;
  • increasing board-level engagement for greater board oversight, input and direction;
  • increasing staff awareness of the policies and their obligations through greater internal communication and training; and
  • undertaking an independent review of the trustee’s broader conflicts management framework.

Temporary financial advice relief repealed

On 7 April 2022, ASIC announced that it will allow the COVID-19 temporary relief measures to be automatically repealed on 15 April 2022.

The relief measures which were introduced in April 2020 include:

  • allowing financial advisers to provide a record of advice (ROA), rather than a statement of advice (SOA) to existing clients who require financial advice due to the impacts of the COVID-19 pandemic; and
  • providing financial advisers with additional time to provide clients with a time-critical SOA.

Crypto-assets – risk management and roadmap

On 21 April 2022, ASIC released a letter which sets out their initial risk management expectations for all regulated entities that engage in activities associated with crypto-assets, and a policy roadmap detailing APRA and other regulators’ long term approach.

The initial risk management expectations include:

  • conducting appropriate due diligence and a comprehensive risk assessment before engaging in activities associated with crypto-assets;
  • considering the principles and requirements of Prudential Standard CPS 231 Outsourcing or Prudential Standard SPS 231 Outsourcing when relying on a third party in conducting activities involving crypto-assets; and
  • applying a robust risk management control, with clear accountabilities and relevant reporting to the Board on the key risks associated with new ventures.





Guidance on divesting of Russian assets

On 5 April 2022, the FSC released guidance to assist trustees of superannuation funds with the divestment of Russian assets.

The FSC acknowledged the Government’s strong expectation for superannuation trustees to take steps to divest holdings in Russian’s assets and provided guidance to ensure the divestment occurs in a way that is consistent with the best financial interest of its members, and trustee’s legal and fiduciary obligations.

The guidance covers:

  • what constitutes a ‘Russian asset’;
  • steps to be taken by superannuation trustees;
  • issues in relation to ownership and control; and
  • how the investment process will achieve divestment.  

Additional information

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