Supplementary Explanatory Memorandum
(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable Joe Hockey, MP)Outline
1.1 Government amendments amend Schedule 2, Parts 5 and 6 of the Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001.
1.2 The amendment to the Retirement Savings Accounts Act 1997 in Part 5 of the Bill will allow the Australian Prudential Regulation Authority (APRA) to revoke a direction if an RSA institution satisfies APRA that there is, or likely to continue to be, substantial compliance by the RSA with the provisions of the Financial Sector (Collection of Data) Act 2001.
1.3 The amendments to the Superannuation Industry (Supervision) Act 1993 in Part 6 of the Bill clarifies that the Financial Sector (Collection of Data) Act 2001 applies to all superannuation entities other than self managed superannuation funds (SMSFs). References to Financial Sector (Collection of Data) Act 2001 can be ignored by SMSFs.
Financial impact statement
1.4 The amendments will not have a financial impact on the operations of government. APRA is self-funded through financial sector levies.
Notes on Clauses
Amendment to Schedule 2 - Retirement Savings Accounts Act 1997 (RSA Act)
2.1 Paragraph 182(2)(a) is amended to include the Financial Sector (Collection of Data) Act 2001 as a trigger, that is, if this Act is contravened, APRA has the power to give a direction under this section to an RSA institution.
2.2 The Government amendment to the RSA Act inserts a power under paragraph 182(4) to allow APRA to revoke a direction, if the RSA institution satisfies APRA that there is, and is likely to be, substantial compliance by the RSA institution with the provisions of the Financial Sector (Collection of Data) Act 2001.
Amendment to Schedule 2 - Superannuation Industry (Supervision) Act 1993 (SIS Act)
2.3 Clause 95 amends the SIS Act to remove a semicolon from the end of paragraph 10(1)zf. This is a consequential amendment flowing from Item 96 of the Bill which repeals paragraph 10(1)zg.
2.4 This item is deleted.
2.5 Clause 96 repeals paragraph 10(1)(zg) of the SIS Act which states that a decision of the Regulator under subsection 347A(9) is a reviewable decision. Paragraph 10(1)(zg) is being repealed because section 347A is being repealed under clause 146 of this Bill. (Section 347A is being retained - refer to Item 146 below).
2.6 This item is deleted.
2.7 Clause 123 of the Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 inserts a reference to the Financial Sector (Collection of Data) Act 2001 into paragraphs 42A(5)(a) and (b) of the SIS Act. These paragraphs are only applicable to self managed superannuation funds (SMSFs) and therefore should not include reference to the Financial Sector (Collection of Data) Act 2001 which does not apply to this group.
2.8 This item is deleted.
2.9 This item makes clear the obligation on superannuation entities other than a self managed superannuation fund to keep accounts to prepare reporting standards as required by the Financial Sector (Collection of Data) Act 2001.
2.10 Clause 131 repeals paragraph 111(1)(b) which requires the trustee of a superannuation entity to keep accounting records to enable accounts and statements of the entity to be prepared in accordance with section 112, and to prepare the returns of the entity mentioned in section 36.
2.11 Clause 131 replaces paragraph 111(1)(b) with a paragraph that refers to section 13 of the Financial Sector (Collection of Data) Act 2001. Therefore clause 131 inadvertently removes the requirement for trustees of self managed funds to keep accounting records in order to comply with section 112 of the SIS Act.
2.12 Paragraph 111(1)(b) is amended so that it remains in the SIS Act for SMSFs.
2.13 This item amends subparagraph 111(1)(b)(ii) so that it refers to the returns of the entity mentioned in section 36A.
2.14 Clause 132 of the Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 repeals section 112 of the SIS Act which deals with the accounts and statements that are required to be prepared by superannuation entities. If section 112 of the SIS Act were removed, the trustee of an SMSF would no longer have to prepare these documents.
2.15 As the Financial Sector (Collection of Data) Act 2001 does not apply to SMSFs, clause 132 is amended so that section 112 remains in the SIS Act for self managed superannuation funds.
2.16 Inserts a provision that outlines requirements for non-SMSFs in relation to the audit of accounts and statements which includes the audit of financial statements given to APRA under the Financial Sector (Collection of Data) Act 2001.
2.17 As the Financial Sector (Collection of Data) Act 2001 does not apply to SMSFs, this item amends paragraph 113(3)(a) to outline the requirements for SMSFs in relation to the audit of accounts and statements as required under the SIS Act.
2.18 This item omits Clause 140 as the Commissioner of Taxation does not administer the Financial Sector (Collection of Data) Act 2001 so the amendment is inappropriate.
2.19 This item inserts the appropriate reference to the Financial Sector (Collection of Data) Act 2001 in the note under subsection 252G(2).
2.20 Clause 146 Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 repeals section 347A of the SIS Act which allows the Commissioner of Taxation to collect statistical information. The Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 inadvertently removed this power which is still required.
2.21 This clause is retained in the SIS Act and the Regulator in section 347A means the Commissioner of Taxation.
2.22 Clause 146 Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 repeals section 348 of the SIS Act which allows the Commissioner of Taxation to publish statistical information. The Financial Sector (Collection of Data - Consequential and Transitional Provisions) Bill 2001 inadvertently removed this power which is still required.
2.23 This clause is retained in the SIS Act and the Regulator in section 348 means the Commissioner of Taxation.
Proposed legislation
Note 4.3 is replaced with -
4.3 Parts 1 to 6 of Schedule 2 commence on a day to be fixed by proclamation.