Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Act 2012 (158 of 2012)

Schedule 2   Approved SMSF auditors

Part 1   Main amendments

Superannuation Industry (Supervision) Act 1993

9   After Division 1 of Part 16

Insert:

Division 1A - Approved SMSF auditors

Subdivision A - Registration of approved SMSF auditors

Officer may use information

128A Application for registration as an approved SMSF auditor

(1) A natural person who is an Australian resident may apply to the Regulator for registration as an approved SMSF auditor.

(2) The application must be in the approved form.

Note: The approved form may require electronic lodgement of the application: see sections 11A and 11B.

(3) The Regulator may request the applicant to give to the Regulator further information relating to the application within a specified time.

(4) The applicant is taken to have withdrawn the application if he or she does not give the further information within that time.

128B Registration as an approved SMSF auditor

Obligation to register

(1) The Regulator must grant an application under section 128A and register the applicant as an approved SMSF auditor if:

(a) the applicant:

(i) has the qualifications prescribed by the regulations; and

(ii) has the practical experience prescribed by the regulations; and

(iii) has passed a competency examination in accordance with section 128C; and

(b) the Regulator is satisfied that the applicant:

(i) is capable of performing the duties of an approved SMSF auditor; and

(ii) is unlikely to contravene the obligations of an approved SMSF auditor under Subdivision B; and

(iii) is otherwise a fit and proper person to be an approved SMSF auditor.

Discretion to register

(2) If the applicant does not meet one or more of the requirements of paragraph (1)(a), the Regulator may grant the application if the applicant meets the requirements of paragraph (1)(b).

Refusal of applications

(3) If the applicant does not meet the requirements of paragraph (1)(b), the Regulator must refuse the application.

(4) Despite subsections (1) and (2), the Regulator must refuse the application if the applicant is:

(a) a person for whom a disqualification order or a suspension order 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.

(5) If the Regulator refuses the application, the Regulator must, not later than 14 days after the decision, give to the applicant a notice in writing setting out the decision and the reasons for it.

Certificate of registration

(6) If the Regulator grants the application, the Regulator must, not later than 14 days after granting the application, issue to the applicant a certificate:

(a) stating that the applicant has been registered as an approved SMSF auditor; and

(b) stating the applicant's SMSF auditor number; and

(c) specifying the day the application was granted.

(7) A failure to comply with subsection (6) does not affect the validity of the decision.

Duration of registration

(8) A registration under this section takes effect at the beginning of the day specified in the certificate as the day the application is granted and remains in force (except while the registration is suspended) until:

(a) the Regulator cancels the registration under section 128E; or

(b) an order disqualifying the person who is registered from being an approved SMSF auditor comes into force under section 130F; or

(c) an order disqualifying the person who is registered from being or acting as an auditor of all superannuation entities comes into force under section 130D; or

(d) the person who is registered dies.

128C Competency examinations

The applicant is taken to pass a competency examination in accordance with this section if:

(a) in the 12 month period prior to his or her application under section 128A, the applicant passes an examination conducted by or on behalf of the Regulator for the purposes of this section; and

(b) the applicant has not, during that period, undertaken and failed to pass such an examination on 2 previous occasions.

128D Conditions on registration

(1) The Regulator may, at any time, by giving written notice to a person:

(a) impose conditions, or additional conditions, on the person's registration as an approved SMSF auditor; or

(b) vary or revoke conditions imposed on the registration.

(2) The Regulator may do so:

(a) on its own initiative; or

(b) on application by the person if:

(i) the person is an approved SMSF auditor; and

(ii) the application is accompanied by any documents prescribed by the regulations.

(3) Without limiting the conditions that the Regulator may impose under this section, those conditions, or those conditions as varied, may require one or more of the following:

(a) that the person complete a course of education or training specified in the notice;

(b) that the person undertake and pass a competency examination within a period specified by the Regulator.

128E Cancelling registration

(1) The Regulator may cancel a person's registration as an approved SMSF auditor if the person requests the Regulator to do so. The request must be in writing.

(2) The Regulator may cancel a person's registration as an approved SMSF auditor if the Regulator is satisfied that the person:

(a) has failed to comply with a condition imposed under section 128D on the person's registration; or

(b) has not performed any significant audit work during a continuous period of 5 years, and, as a result, has ceased to have the practical experience necessary for carrying out audits of self managed superannuation funds under this Act; or

(c) has failed to comply with the person's obligation to give the Regulator a statement under section 128G; or

(d) has ceased to be an Australian resident.

(3) The Regulator must, not later than 14 days after deciding to cancel the registration, give the person a written notice setting out the decision and the reasons for it.

(4) The decision takes effect at the end of the day the notice is given to the person.

(5) A failure to comply with subsection (3) does not affect the validity of the decision.

Subdivision B - Obligations of approved SMSF auditors

128F Professional obligations of approved SMSF auditors

An approved SMSF auditor must:

(a) complete the continuing professional development requirements prescribed by the regulations; and

(b) hold a current policy of professional indemnity insurance, of a level prescribed by the regulations, for claims that may be made against the auditor in connection with audits of self managed superannuation funds; and

(c) comply with:

(i) any competency standards that the Regulator determines under section 128Q; and

(ii) any auditing standards, made by the Auditing and Assurance Standards Board under section 336 of the Corporations Act 2001, that are applicable to the duties of an approved SMSF auditor under this Act; and

(iii) any auditing and assurance standards, formulated by the Auditing and Assurance Standards Board under section 227B of the Australian Securities and Investments Commission Act 2001, that are applicable to those duties; and

(d) comply with the auditor independence requirements prescribed by the regulations.

128G Annual statements

(1) An approved SMSF auditor or suspended SMSF auditor must, within 30 days after the end of:

(a) the 12 month period beginning on the day the auditor's registration as an approved SMSF auditor took effect; and

(b) each subsequent 12 month period;

give to the Regulator a statement relating to that period.

(2) The statement must be in the approved form.

(3) The Regulator may, at any time before the statement is due, extend (or further extend) the period for giving the statement.

Note: The approved form may require electronic lodgement of the statement: see sections 11A and 11B.

128H Notification of certain matters

If:

(a) an approved SMSF auditor ceases:

(i) to practise as an auditor of self managed superannuation funds; or

(ii) to be an Australian resident; or

(b) a suspended SMSF auditor ceases to be an Australian resident; or

(c) a change occurs in any matter particulars of which are required by paragraph 128J(2)(a), (c) or (d) to be entered in the Register of Approved SMSF Auditors in relation to an approved SMSF auditor or suspended SMSF auditor; or

(d) a change occurs in any contact details that were included:

(i) in the application of an approved SMSF auditor or suspended SMSF auditor, under section 128A, for registration as an approved SMSF auditor; or

(ii) in particulars previously given under this paragraph in relation to an approved SMSF auditor or suspended SMSF auditor;

the approved SMSF auditor or suspended SMSF auditor must, not later than 21 days after the occurrence of the event concerned, give to the Regulator, in the approved form, particulars of that event.

Note: The approved form may require electronic lodgement of the particulars: see sections 11A and 11B.

Subdivision C - Registers

128J Register of Approved SMSF Auditors

(1) The Regulator must cause a Register of Approved SMSF Auditors to be kept for the purposes of this Act.

(2) The Regulator must cause the entry in the Register of the following particulars relating to each person who is an approved SMSF auditor or suspended SMSF auditor:

(a) the person's name;

(b) the day the person's registration took effect;

(c) the address of the principal place where the person practises as an auditor of self managed superannuation funds;

(d) if the person practises as an auditor or a member of a firm, or under a name or style other than the person's own name - the name of the firm, or the name or style under which he or she so practises;

(e) particulars of any suspension of the person's registration.

The Regulator may cause the entry in the Register of such other particulars relating to the person as the Regulator considers appropriate.

(3) If the person ceases to be an approved SMSF auditor (for a reason other than the person becoming a suspended SMSF auditor), the Regulator must cause to be removed from the Register the person's name and any other particulars relating to the person that are entered in the Register.

(4) A person may inspect and make copies of, or take extracts from, the Register.

128K Register of Disqualified SMSF Auditors

(1) The Regulator must cause a Register of Disqualified SMSF Auditors to be kept for the purposes of this Act.

(2) The Regulator must cause the entry in the Register of the name, and the contact details last known to the Regulator, of each person for whom an order disqualifying the person from being an approved SMSF auditor is in force under section 130F.

(3) If the order is revoked, the Regulator must cause to be removed from the Register the person's name and any other particulars relating to the person that are entered in the Register.

(4) A person may inspect and make copies of, or take extracts from, the Register.

Subdivision D - Fees

128L Fees imposed under the Superannuation Auditor Registration Imposition Act 2012

(1) A fee imposed under the Superannuation Auditor Registration Imposition Act 2012 is payable for the matters mentioned in an item in column 1 of the table. The fee is payable by the person referred to in the corresponding item in column 2 of the table.

(2) The fee is payable to the Regulator on behalf of the Commonwealth.

(3) The fee is due and payable on the day prescribed by the regulations for the purposes of this subsection.

(4) The Regulator may, on behalf of the Commonwealth, waive the payment of the whole or a part of the fee, on the Regulator's own initiative or on written application by a person.

(5) If a fee is payable under this section for a matter (other than a matter referred to in item 8 of the table in subsection (1)), the matter is taken, for the purposes of this Act (other than section 128J), not to have occurred until the fee is paid.

(6) The Regulator may, on behalf of the Commonwealth, recover a debt due under this section.

(7) Nothing in a law passed before the commencement of this section exempts a person from liability to pay a fee under this section.

(8) A law, or a provision of a law, passed after the commencement of this section that purports to exempt a person from liability:

(a) to pay taxes under laws of the Commonwealth; or

(b) to pay certain taxes under those laws that include fees payable under this section;

is not to be construed as exempting the person from liability to pay fees payable under this section, unless the law or provision expressly exempts a person from liability to pay such fees.

128M Fees for inspection or search

(1) If a fee is payable under section 128L for a matter referred to in item 8 of the table in subsection 128L(1) that involves the Regulator doing an act, the Regulator may refuse to do the act until the fee is paid.

(2) To avoid doubt, nothing in this Division, and nothing done under this Division:

(a) imposes on the Regulator a duty to allow the inspection or search of a register, or to make available information; or

(b) confers a right to inspect or search a register or to have information made available;

except so far as such a duty or right would, but for the effect of this section, exist under a provision of this Act (other than a provision of this Division) or under some other law.

Subdivision E - Miscellaneous

128N ASIC may disclose information to the Commissioner of Taxation

ASIC may disclose information, given to it in or in connection with the performance of its functions or the exercise of its powers under this Part or Part 25, to the Commissioner of Taxation for the purpose of administering the provisions of this Act.

Note: A disclosure of information permitted by this section is an authorised disclosure for the purposes of subsection 127(2) of the Australian Securities and Investments Commission Act 2001.

128P Commissioner of Taxation may refer matters to ASIC

(1) If the Commissioner of Taxation is of the opinion that:

(a) an approved SMSF auditor is not a fit and proper person to be an approved SMSF auditor; or

(b) in relation to the conduct of an audit of a self managed superannuation fund - a person has contravened this Act or the regulations, or a person who conducted, or is conducting, the audit has failed to carry out or perform adequately and properly:

(i) the duties of an auditor under this Act or the regulations; or

(ii) any duties required by a law of the Commonwealth, a State or a Territory to be carried out or performed by an auditor; or

(iii) any functions that an auditor is entitled to perform in relation to this Act or the regulations or the Financial Sector (Collection of Data) Act 2001;

the Commissioner of Taxation may refer the details of the matter to ASIC.

(2) The Commissioner of Taxation may exercise the power under subsection (1) in relation to an approved SMSF auditor whether or not an order disqualifying or suspending the approved SMSF auditor has been made under section 130F.

(3) If, under subsection (1), the Commissioner of Taxation refers details of a matter to ASIC, the Commissioner of Taxation must, as soon as practicable but, in any event, not later than 14 days after the referral, by notice in writing given to the auditor or person concerned, inform the auditor or person:

(a) of the fact that a matter has been referred under subsection (1); and

(b) of the nature of the matter so referred.

128Q Competency standards

(1) The Regulator may, by legislative instrument, determine competency standards to be complied with by all approved SMSF auditors.

(2) A competency standard may impose different requirements to be complied with in different situations or in respect of different activities.

(3) Without limiting the matters in relation to which the Regulator may determine a competency standard, a competency standard may provide for matters relating to any of the following:

(a) the conduct of audits;

(b) the professional obligations of approved SMSF auditors;

(c) knowledge of laws applying to approved SMSF auditors;

(d) compliance with laws applying to approved SMSF auditors.

(4) A competency standard may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, a matter contained in an instrument or writing:

(a) as in force or existing at a particular time; or

(b) as in force or existing from time to time.

(5) Subsection (4) has effect despite anything in subsection 14(2) of the Legislative Instruments Act 2003.