Explanatory Memorandum
(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)Chapter 3 Superannuation Auditor Registration Imposition Bill 2012
Outline of chapter
3.1 This chapter explains the imposition of fees relating to auditors of self-managed superannuation funds (SMSFs) and for related purposes as described in the Superannuation Auditor Registration Imposition Bill 2012.
3.2 In recognition of the important role SMSF auditors play in the regulatory arrangements for SMSFs, the Government accepted the recommendation of the Super System Review to establish a registration system for approved SMSF auditors. Approved SMSF auditors will be required to pay fees for applying for registration, undertaking a competency exam and submitting an annual statement to Australian Securities and Investments Commission (ASIC). Additionally, approved SMSF auditors will be liable for additional fees if they do not submit their annual statements on time or fail to notify ASIC of certain matters on time.
3.3 While online searches of the registers kept by ASIC for approved SMSF auditors and disqualified SMSF auditors will be free, fees will be payable for certain requests to inspect or search a register. For example, a fee will be payable for an extract that includes historical information such as previous place of business of an approved SMSF auditor.
3.4 All references in this chapter are to the Superannuation Auditor Registration Imposition Bill 2012 unless otherwise stated.
Context of amendments
3.5 Auditors play a crucial role in the regulation of the SMSF sector since they assess the fund's overall compliance with the law and the fund's financial statements. This in turn provides an important assurance for trustees of SMSFs that the fund is in compliance with regulatory requirements. The annual audit also provides assurance to the Government and the general public that SMSFs are complying with the superannuation laws. It is therefore necessary that SMSF auditors have a high standard of competency.
3.6 SMSF auditor registration is intended to raise the standard of SMSF auditor competency and ensure there are minimum standards across the sector.
3.7 Fees imposed under the Superannuation Auditor Registration Imposition Bill 2012 are intended to offset costs of implementing SMSF auditor registration.
Summary of new law
3.8 This Bill imposes fees on certain matters relating to auditors of SMSFs and for related purposes.
Comparison of key features of new law and current law
| New Law | Current Law |
| Fees payable in accordance with section 128L of the SIS Act are imposed. The amounts of those fees are prescribed by the regulations. | No equivalent. |
| The regulations may prescribe an amount not exceeding $1,000 as the fee or a method for calculating the amount not exceeding $1,000 of the fee. | No equivalent. |
| The regulations may prescribe different amounts for different kinds of matters mentioned in an item in column 1 of the table in subsection 128L(1) of the Superannuation (Industry) Supervision Act 1993 (SIS Act). | No equivalent. |
| The Governor-General may make regulations relating to the amount of fees. | No equivalent. |
Detailed explanation of new law
3.9 Fees payable in accordance with section 128L of the SIS Act are imposed. [Section 3]
3.10 The amounts of those fees will be prescribed by the regulations. [Section 4, subsection (1)]
3.11 The regulations may prescribe such a fee:
- •
- by prescribing an amount (not exceeding $1,000) as the fee; or
- •
- by prescribing a method for calculating the amount (not exceeding $1,000) of the fee.
[Section 4, subsection (2)] .
3.12 Approved SMSF auditors will be required to pay fees for applying for registration as an approved SMSF auditor, undertaking a competency exam and submitting an annual statement to ASIC. Approved SMSF auditors will be liable for additional fees if they do not submit their annual statements on time or fail to notify ASIC of certain matters on time. Fees will also be payable for certain requests to inspect or search theRegister of Approved SMSF Auditors and the Register of Disqualified SMSF Auditors.
3.13 The expected amounts of the fees payable are outlined in the following table.
| Fee payable for ... | Fee ($) |
| Applying for registration as an approved SMSF auditor. | 100 |
| Undertaking a competency exam. | 100 |
| Giving ASIC an annual statement. | 50 |
| Giving ASIC an annual statement after it fell due. | Depends on how late the statement is given to ASIC after it fell due. |
| Notifying ASIC of certain matters after they fell due. | Depends on how late the particulars are provided to ASIC after they fell due. |
| Certain requests to inspect or search a register. | Based on cost recovery and depends on resources required to find information for the requested search. |
3.14 While fees are generally expected to be much lower than $1,000, the threshold provides flexibility for late payments and for extensive searches of a register that the Regulator keeps under Division 1A of the SIS Act.
3.15 The regulations may prescribe different amounts for different kinds of matters mentioned in an item in column 1 of the table in subsection 128L(1). [Section 4, subsection (3)]
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Superannuation Auditor Registration Imposition Bill 2012
3.16 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
Overview
3.17 This Bill imposes fees on certain matters relating to auditors of self-managed superannuation funds, and for related purposes.
Human rights implications
3.18 This Bill does not engage any of the applicable rights or freedoms.
Conclusion
3.19 This Bill is compatible with human rights as it does not raise any human rights issues.
Minister for Superannuation, the Hon Bill Shorten.