TREASURY LAWS AMENDMENT (IMPROVING ACCOUNTABILITY AND MEMBER OUTCOMES IN SUPERANNUATION MEASURES NO. 1) BILL 2017

2016-2017

The Parliament of the

Commonwealth of Australia

THE SENATE

Presented and read a first time

Treasury Laws Amendment (Improving

Accountability and Member Outcomes in

Superannuation Measures No. 1) Bill

2017

No. , 2017

(Treasury)

A Bill for an Act to amend the law relating to

superannuation, and for related purposes

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

Contents

Short title ........................................................................................... 1

Commencement ................................................................................. 1

Schedules ........................................................................................... 2

Schedule 1--Annual MySuper outcomes assessment

Superannuation Industry (Supervision) Act 1993

Schedule 2--Authority to offer a MySuper product

Superannuation Industry (Supervision) Act 1993

Schedule 3--Director penalties

Superannuation Industry (Supervision) Act 1993

Schedule 4--Approval to own or control an RSE licensee

Part 1--Amendments

Superannuation Industry (Supervision) Act 1993

Part 2--Application and transitional provisions

Schedule 5--APRA directions power

Superannuation Industry (Supervision) Act 1993

Schedule 6--Portfolio holdings disclosure

Corporations Act 2001

Superannuation Industry (Supervision) Act 1993

Schedule 7--Annual members' meetings

Superannuation Industry (Supervision) Act 1993

Schedule 8--Reporting standards

Australian Prudential Regulation Authority Act 1998

Financial Sector (Collection of Data) Act 2001

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

A Bill for an Act to amend the law relating to

superannuation, and for related purposes

The Parliament of Australia enacts:

1 Short title

This Act is the Treasury Laws Amendment (Improving

Accountability and Member Outcomes in Superannuation

Measures No. 1) Act 2017.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table

commences, or is taken to have commenced, in accordance with

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 to 3

and anything in

this Act not

elsewhere covered

by this table

The day this Act receives the Royal Assent.

2. Schedules 1, 2

and 3

The day after this Act receives the Royal

Assent.

3. Schedule 4

3 months after the day on which this Act

receives the Royal Assent.

4. Schedules 5, 6,

7 and 8

The day after this Act receives the Royal

Assent.

Note:

This table relates only to the provisions of this Act as originally

enacted. It will not be amended to deal with any later amendments of

this Act.

(2) Any information in column 3 of the table is not part of this Act.

Information may be inserted in this column, or information in it

may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or

repealed as set out in the applicable items in the Schedule

concerned, and any other item in a Schedule to this Act has effect

according to its terms.

Annual MySuper outcomes assessment Schedule 1

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Treasury Laws Amendment (Improving Accountability and Member

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Schedule 1--Annual MySuper outcomes

assessment

Superannuation Industry (Supervision) Act 1993

1 Section 29VN

Before "Each trustee", insert "(1)".

2 Paragraph 29VN(b)

Repeal the paragraph, substitute:

(b) determine, in writing, on an annual basis whether the

financial interests of the beneficiaries of the fund who hold

the MySuper product are being promoted by the trustee,

having regard to:

(i) the factors mentioned in subsection (2); and

(ii) a comparison of the MySuper product with other

MySuper products, based on the factors mentioned in

subsection (3); and

3 At the end of section 29VN

Add:

(2) In determining whether the financial interests of the beneficiaries

of the fund who hold the MySuper product are being promoted by

the trustee, the trustee must assess each of the following:

(a) whether the options, benefits and facilities offered under the

MySuper product are appropriate to those beneficiaries;

(b) whether the investment strategy for the MySuper product,

including the level of investment risk and the return target, is

appropriate to those beneficiaries;

(d) whether any insurance fees charged in relation to the

MySuper product inappropriately erode the retirement

income of those beneficiaries;

(e) whether there are problems of scale in relation to the

MySuper product:

Schedule 1 Annual MySuper outcomes assessment

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(i) because the number of beneficiaries of the fund who

hold the MySuper product is insufficient; or

(ii) because the number of beneficiaries of the fund is

insufficient; or

(iii) where the assets of the fund that are attributed to the

MySuper product are, or are to be, pooled with other

assets of the fund or assets of another entity or other

entities--because that pool of assets is insufficient; or

(iv) in a case to which subparagraph (iii) does not apply--

because the assets of the fund that are attributed to the

MySuper product are insufficient;

(f) any other relevant matters, including any matters prescribed

for the purposes of this paragraph.

(3) In comparing the MySuper product with other MySuper products,

the trustees must compare each of the following:

(a) the fees and costs that affect the return to the beneficiaries

holding the MySuper products;

(b) the return target for the MySuper products;

(d) the level of investment risk for the MySuper products;

(e) any other matter prescribed for the purposes of this

paragraph.

(4) The regulations may prescribe:

(a) standards to be applied by trustees in determining any matter

mentioned in subsection (2); and

(b) methodology to be used by trustees in determining any matter

mentioned in subsection (2); and

product with other MySuper products, based on the factors

mentioned in subsection (3); and

(d) methodology to be used by trustees in comparing a MySuper

product with other MySuper products, based on the factors

mentioned in subsection (3).

(5) The trustee must:

(a) make the determination under paragraph (1)(b), and a

summary of the assessments and comparisons on which the

Annual MySuper outcomes assessment Schedule 1

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Treasury Laws Amendment (Improving Accountability and Member

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determination is based, publicly available on the website of

the regulated superannuation fund that includes the MySuper

product; and

(b) do so within 28 days after the determination is made; and

and comparisons on which the determination is based, on the

website until a new determination is made under

paragraph (1)(b).

Schedule 2 Authority to offer a MySuper product

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Schedule 2--Authority to offer a MySuper

product

Superannuation Industry (Supervision) Act 1993

1 Paragraphs 29T(1)(h), (ha), (i) and (j)

Repeal the paragraphs, substitute:

(h) APRA has no reason to believe that:

(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may fail to comply with the enhanced trustee obligations for

MySuper products; and

(i) where the RSE licensee is a body corporate--APRA has no

reason to believe that the directors of the RSE licensee may

fail to comply with the enhanced director obligations for

MySuper products; and

(j) APRA has no reason to believe that:

(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may fail to comply with the general fees rules and the fees

rules in relation to MySuper products; and

(k) APRA has no reason to believe that:

(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may contravene section 29W, 29WA or 29WB.

2 Paragraphs 29U(2)(c), (ca), (d) and (e)

Repeal the paragraphs, substitute:

Authority to offer a MySuper product Schedule 2

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Treasury Laws Amendment (Improving Accountability and Member

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(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may not comply with the enhanced trustee obligations for

MySuper products (whether because of a previous failure to

do so, or for any other reason); or

(ca) where the RSE licensee is a body corporate--APRA has

reason to believe that the directors of the RSE licensee may

not comply with the enhanced director obligations for

MySuper products (whether because of a previous failure to

do so, or for any other reason); or

(d) APRA has reason to believe that:

(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may not comply with the general fees rules and the fees rules

in relation to MySuper products (whether because of a

previous failure to do so, or for any other reason); or

(e) APRA has reason to believe that:

(i) where the RSE licensee is a body corporate--the RSE

licensee; or

(ii) where the RSE licensee is made up of a group of

individual trustees--any of those individual trustees;

may contravene section 29W, 29WA or 29WB (whether

because of a previous contravention of that section, or for any

other reason); or

3 Application

The amendment made by item 1 of this Schedule applies where an

entity applies to APRA on or after the day on which this Schedule

commences for authority to offer a class of beneficial interest in a

regulated superannuation fund as a MySuper product.

Schedule 3 Director penalties

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No. , 2017

Schedule 3--Director penalties

Superannuation Industry (Supervision) Act 1993

1 Subsection 29VPA(2)

Repeal the subsection, substitute:

(2) Subsection (1) is a civil penalty provision as defined by

section 193, and Part 21 therefore provides for civil and criminal

consequences of contravening, or of being involved in a

contravention of, that subsection.

(2A) A contravention of subsection (1) does not result in the invalidity

of a transaction.

2 After section 55

Insert:

55AA Additional consequences of contravention of covenant relating

to directors

(1) A person must not contravene a covenant that:

(a) is to the effect of a covenant set out in subsection 52A(2);

and

(b) is contained, or taken to be contained, in the governing rules

of a superannuation entity.

(2) Subsection (1) is a civil penalty provision as defined by

section 193, and Part 21 therefore provides for civil and criminal

consequences of contravening, or of being involved in a

contravention of, that subsection.

(3) A contravention of subsection (1) does not result in the invalidity

of a transaction.

(4) This section does not limit the operation of section 55.

3 Before paragraph 193(a)

Insert:

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Treasury Laws Amendment (Improving Accountability and Member

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(aa) subsection 29VPA(1);

(ab) subsection 55AA(1);

4 Application

The amendments made by this Schedule apply in relation to

contraventions occurring on or after the day this Schedule commences.

Schedule 4 Approval to own or control an RSE licensee

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Schedule 4--Approval to own or control an

RSE licensee

Part 1--Amendments

Superannuation Industry (Supervision) Act 1993

1 Subsection 10(1)

Insert:

controlling stake: a person holds a controlling stake in an RSE

licensee that is a body corporate if the person holds a stake of more

than 15% in the RSE licensee.

practical control of an RSE licensee that is a body corporate has

the meaning given by section 131EC.

2 Subsection 10(1) (after paragraph (dl) of the definition of

reviewable decision)

Insert:

(dla) a decision of APRA under section 29HD to refuse to give a

person approval to hold a controlling stake in an RSE

licensee; or

3 Subsection 10(1) (after paragraph (taab) of the definition of

reviewable decision)

Insert:

(taac) a decision of the Regulator under subsection 131EB(1) to

give a person a direction to relinquish control of an RSE

licensee; or

4 Subsection 10(1)

Insert:

stake in an RSE licensee that is a body corporate, has the same

meaning as in the Financial Sector (Shareholdings) Act 1998.

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5 Paragraph 29E(1)(f)

Repeal the paragraph, substitute:

(f) the RSE licensee must notify APRA of any change in the

composition or control of the RSE licensee (see

subsection (2)) within 14 days after the change takes place;

6 Subsection 29E(2)

Omit "change in the composition of the RSE licensee", substitute

"change in the composition or control of the RSE licensee".

7 Paragraph 29E(2)(a)

Repeal the paragraph, substitute:

(a) if the RSE licensee is a body corporate:

(i) a person becoming, or ceasing to be, a director of the

RSE licensee; or

(ii) a person's stake in the RSE licensee changing; or

8 After Division 7 of Part 2A

Insert:

Division 8--Approval to hold a controlling stake in an RSE

licensee

Subdivision A--Application of this Division

29H Application

This Division only applies in relation to an RSE licensee that is a

body corporate.

Subdivision B--Applying for approval

29HA Application for approval to hold a controlling stake

(1) A person may apply to APRA for approval to hold a controlling

stake in an RSE licensee.

(2) The application must:

Schedule 4 Approval to own or control an RSE licensee

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No. , 2017

(a) be in the approved form; and

(b) contain the information required by the approved form.

(3) If:

(a) a person applies for approval to hold a controlling stake in an

RSE licensee; and

(b) after the application is made, but before APRA decides the

application, information contained in the application ceases

to be correct;

the person must give APRA the correct information, in writing, as

soon as practicable after the information in the application ceases

to be correct.

(4) An application is taken not to comply with this section if

subsection (3) is contravened.

29HB APRA may request further information

APRA may give a person who has applied for approval to hold a

controlling stake in an RSE licensee a notice requesting the person

to give APRA, in writing, specified information relating to the

application.

29HC Period for deciding applications for approval

(1) APRA must decide an application by a person for approval to hold

a controlling stake in an RSE licensee:

(a) within 90 days after receiving the application; or

(b) if the applicant was requested to provide information under

section 29HB--within 90 days after:

(i) receiving from the person all of the information the

person was requested to provide under that section; or

(ii) all notices relating to that information being disposed

of;

unless APRA extends the period for deciding the application under

subsection (2).

(2) APRA may extend the period for deciding an application by a

person for approval to hold a controlling stake in an RSE licensee

by up to 30 days if APRA informs the person of the extension:

Approval to own or control an RSE licensee Schedule 4

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(a) in writing; and

(b) within 90 days after receiving the application.

(3) If APRA extends the period for deciding the application, it must

decide the application within the extended period.

(4) If APRA has not decided an application for approval to hold a

controlling stake in an RSE licensee by the end of the period by

which it is required to decide the application, APRA is taken to

have decided, at the end of the last day of that period, to refuse the

application.

Subdivision C--Approval

29HD Approval to hold a controlling stake in an RSE licensee

APRA must give approval for a person to hold a controlling stake

in an RSE licensee if, and only if:

(a) the application for approval complies with section 29HA; and

(b) the applicant has provided to APRA all information that the

applicant was requested under section 29HB to provide, or

the request has been disposed of; and

controlling stake in the RSE licensee, or the way in which

that controlling stake is likely to be used, the RSE licensee

may be unable to satisfy one or more of the trustee's

obligations contained in a covenant set out in sections 52 to

53, or prescribed under section 54A, or referred to in

section 29VN or 29VO.

29HE Notice of approval

If APRA gives a person approval to hold a controlling stake in an

RSE licensee, APRA must notify the RSE licensee in writing of the

approval.

29HF APRA to give notice of refusal of approval

If APRA refuses an application by a person for approval to hold a

controlling stake in an RSE licensee, APRA must take all

reasonable steps to ensure that the person is given a notice:

Schedule 4 Approval to own or control an RSE licensee

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No. , 2017

(a) informing it of APRA's refusal of the application; and

(b) setting out the reasons for the refusal;

as soon as practicable after refusing the application.

9 After section 29JCA

Insert:

29JCB Holding a controlling stake in an RSE licensee without

approval

(1) A person commits an offence if:

(a) the person holds a controlling stake in an RSE licensee; and

(b) the person does not have approval under section 29HD to

hold a controlling stake in the RSE licensee.

Penalty: 400 penalty units for each day on which the person holds

a controlling stake in the RSE licensee without approval.

(2) Strict liability applies to subsection (1).

10 After Division 1 of Part 16A

Insert:

Division 2--Directions to relinquish control over an RSE

licensee

131E Object of this Division

The object of this Division is to enable the Regulator to direct a

person who is in control of an RSE licensee to relinquish that

control if there has been, is or is likely to be interference with the

ability of the RSE licensee to satisfy its obligations in relation to a

superannuation entity.

131EA Application of this Division

This Division applies in relation to an RSE licensee that is a body

corporate.

Approval to own or control an RSE licensee Schedule 4

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131EB Direction to relinquish control

(1) The Regulator may give a person a direction to relinquish control

of an RSE licensee if:

(a) the Regulator has reason to believe that:

(i) the person has a controlling stake in the RSE licensee;

(ii) the person has practical control of the RSE licensee; and

(b) the Regulator has reason to believe that because of:

(i) the person's controlling stake, or practical control, of

the RSE licensee; or

(ii) the way in which control has been, is or is likely to be

exercised;

the RSE licensee has been, is or is likely to be unable to

satisfy one or more of the trustee's obligations contained in a

covenant set out in sections 52 to 53, or prescribed under

section 54A, or referred to in section 29VN or 29VO.

(2) The Regulator may give a person a direction to relinquish control

of an RSE licensee if:

(a) the Regulator has reason to believe that the person has a

controlling stake in the RSE licensee; and

(b) the person does not have approval under section 29HD to

hold a controlling stake in the RSE licensee.

(3) The Regulator may give a person a direction to relinquish control

of an RSE licensee if:

(a) the Regulator has reason to believe that that the person has a

controlling stake in the RSE licensee; and

(b) the person has approval under section 29HD to hold a

controlling stake in the RSE licensee; and

application for approval was false or misleading in a material

particular.

(4) To avoid doubt, a direction under subsection (1) or (3) to a person

to relinquish a controlling stake in an RSE licensee may be given

even if the person has approval to hold a controlling stake in the

RSE licensee.

Schedule 4 Approval to own or control an RSE licensee

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(5) The direction must be given in writing.

(6) The Regulator must give the person:

(a) a copy of the direction; and

(b) a statement of the Regulator's reasons for giving the

direction.

(7) The Regulator may revoke a direction to relinquish control of an

RSE licensee.

(8) The revocation must be in writing and a copy of the revocation

must be given to the person.

131EC Meaning of practical control

A person has practical control over an RSE licensee that is a body

corporate if:

(a) either of the following is satisfied:

(i) the directors of the RSE licensee are accustomed or

under an obligation, whether formal or informal, to act

in accordance with the directions, instructions or wishes

of the person (either alone or together with associates);

(ii) the person (either alone or together with associates) is in

a position to exercise control over the RSE licensee; and

(b) the person does not hold a controlling stake in the RSE

licensee.

131ED Consequences of a direction to relinquish control

(1) If the Regulator gives a person a direction to relinquish control

over an RSE licensee, the person must take such steps as are

necessary to ensure that:

(a) the directors of the RSE licensee are not accustomed or under

an obligation, whether formal or informal, to act in

accordance with the directions, instructions or wishes of the

person (either alone or together with associates); and

(b) the person (either alone or together with associates) is not in

a position to exercise control over the RSE licensee; and

licensee.

Approval to own or control an RSE licensee Schedule 4

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(2) The person must take those steps:

(a) within 90 days after being given a copy of the direction; or

(b) if the Regulator, by written notice given to the person, allows

a longer period for compliance--before the end of that longer

period.

(3) A person commits an offence if:

(a) the person is subject to a requirement under this section; and

(b) the person intentionally or recklessly contravenes the

requirement.

Penalty: 400 penalty units.

Note:

Section 4K (Continuing and multiple offences) of the Crimes Act 1914

applies to an offence under subsection (3), so a person commits an

offence, after the period for relinquishment expires, on each day on

which the person does not relinquish control.

131EE Interim orders

Orders where the direction is stayed by the Administrative Appeals

Tribunal

(1) The Regulator may apply to the Federal Court of Australia (the

Federal Court) for orders under subsection (2) if:

(a) the Regulator has given a direction to relinquish control over

an RSE licensee to a person; and

(b) an application has been made to the Administrative Appeals

Tribunal for a review of the decision to give the direction;

and

affecting the operation or implementation of the decision to

give the direction, or a part of that decision.

(2) The Federal Court may make such orders as the court considers

appropriate to ensure that the person does not, during the period to

which an order of the Tribunal relates, exercise control over the

RSE licensee in a manner that results in the RSE licensee being

unable to satisfy one or more of the trustee's obligations contained

in a covenant set out in sections 52 to 53, or prescribed under

section 54A, or referred to in section 29VN or 29VO.

Schedule 4 Approval to own or control an RSE licensee

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Orders to deal with conduct during the compliance period

(3) The Regulator may apply to the Federal Court of Australia (the

Federal Court) for orders under subsection (4) if:

(a) a direction to relinquish control over an RSE licensee is in

force in relation to a person; and

(b) the Regulator has reason to believe that the person may,

during the period under subsection 131ED(2) during which

the person is required to take steps under the direction (the

compliance period), exercise control over the RSE licensee

in a manner that results in the RSE licensee being unable to

satisfy one or more of the trustee's obligations contained in a

covenant set out in sections 52 to 53, or prescribed under

section 54A, or referred to in section 29VN or 29VO.

(4) The Federal Court may make such orders as the court considers

appropriate to ensure that the person does not, during the

compliance period, exercise control over the RSE licensee in a

manner that results in the RSE being unable to satisfy one or more

of the trustee's obligations contained in a covenant set out in

sections 52 to 53, or prescribed under section 54A, or referred to in

section 29VN or 29VO.

131EF Remedial orders

(1) The Regulator may apply to the Federal Court of Australia (the

Federal Court) for orders under this section if a direction to

relinquish control over an RSE licensee is in force in relation to a

person.

(2) The Federal Court may make such orders as the court considers

appropriate to ensure that:

(a) the directors of the RSE licensee are not accustomed or under

an obligation, whether formal or informal, to act in

accordance with the directions, instructions or wishes of the

person (either alone or together with associates); and

(b) the person (either alone or together with associates) is not in

a position to exercise control over the RSE licensee; and

licensee.

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(3) However, the Federal Court may only make orders under this

section if the court is satisfied that:

(a) both of the following are satisfied:

(i) the person holds a controlling stake in the RSE licensee,

or has practical control of the RSE licensee;

(ii) because of the person's control of the RSE licensee, or

the way in which that control has been, is or is likely to

be exercised, the RSE licensee has been, is or is likely

to be unable to satisfy one or more of the trustee's

obligations contained in a covenant set out in

sections 52 to 53, or prescribed under section 54A, or

referred to in section 29VN or 29VO; or

(b) both of the following are satisfied:

(i) the person holds a controlling stake in the RSE licensee;

(ii) the person does not have approval under section 29HD

to hold a controlling stake in the RSE licensee; or

(i) the person has a controlling stake in the RSE licensee;

(ii) the person has approval under section 29HD to hold a

controlling stake in the RSE licensee;

(iii) information given to the Regulator in relation to the

application for approval was false or misleading in a

material particular.

(4) The Federal Court's orders include:

(a) an order directing the disposal of shares; or

(b) an order restraining the exercise of any rights attached to

shares; or

due to a person in respect of shares held by the person; or

(d) an order that any exercise of rights attached to shares be

disregarded.

(5) Subsection (4) does not, by implication, limit subsection (2).

(6) In addition to the Federal Court's powers under subsections (2) and

(4), the court:

(a) has power, for the purpose of securing compliance with any

other order made under this section, to make an order

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directing any person to do or refrain from doing a specified

act; and

(b) has power to make an order containing such ancillary or

consequential provisions as the court thinks just.

(7) The Federal Court may, before making an order under this section,

direct that notice of the Regulator's application be given to such

persons as it thinks fit or be published in such manner as it thinks

fit, or both.

(8) The Federal Court may, by order, rescind, vary or discharge an

order made by it under this section or suspend the operation of

such an order.

11 At the end of subsection 133(1)

Add:

; or (f) the Regulator has reason to believe that:

(i) either a person holds a controlling stake in the RSE

licensee or a person has practical control of the RSE

licensee; and

(ii) because of the person's control of the RSE licensee, or

the way in which that control has been, is or is likely to

be exercised, the RSE licensee has been, is or is likely

to be unable to satisfy one or more of the trustee's

obligations contained in a covenant set out in

sections 52 to 53, or prescribed under section 54A, or

referred to in section 29VN or 29VO; or

(g) the Regulator has reason to believe that:

(i) a person holds a controlling stake in an RSE licensee;

and

(ii) the person does not have approval under section 29HD

to hold a controlling stake in the RSE licensee.

12 After paragraph 223A(1)(a)

Insert:

(aa) subsection 29JCB(1);

Approval to own or control an RSE licensee Schedule 4

Application and transitional provisions Part 2

No. , 2017

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Part 2--Application and transitional provisions

13 Definitions

In this Part:

commencement day means the day on which this Schedule commences.

14 Treatment of persons holding a controlling stake in an

RSE licensee before the commencement day

(1)

This item applies if:

(a) a person holds a controlling stake in an RSE licensee

immediately before the commencement day; and

(b) the person continues to hold a controlling stake in the RSE

licensee on, or on and after, the commencement day.

(2)

For the purposes of the Superannuation Industry (Supervision) Act

1993, the person is taken to have approval under section 29HD to hold a

controlling stake in the RSE licensee during the period:

(a) beginning on the commencement day; and

(b) ending when the period during which the person holds a

controlling stake in the RSE licensee is broken.

15 Holding a controlling stake without approval

Section 29JCB of the Superannuation Industry (Supervision) Act 1993,

as inserted by item 9 of this Schedule, applies where a person begins to

hold a controlling stake in an RSE licensee on or after the day that is 3

months after the commencement day.

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Schedule 5--APRA directions power

Superannuation Industry (Supervision) Act 1993

1 Section 4 (after table item dealing with Part No. 16)

Insert:

16A

APRA's powers to issue directions

2 Subparagraph 6(1)(a)(vii)

Repeal the subparagraph, substitute:

(vii) Parts 14 to 16A.

3 Subsection 10(1) (after paragraph (ta) of the definition of

reviewable decision)

Insert:

(taaa) a decision of APRA to give a direction under

subsection 131D(1), 131DA(1) or 131DA(3); or

(taab) a decision of APRA to vary a direction under

subsection 131DC(1); or

4 Subsection 29E(1) (note 1)

Omit "(see section 29EB)", substitute "(see Division 1 of Part 16A)".

5 Subsection 29EA(2) (note 1)

Omit "(see section 29EB)", substitute "(see Division 1 of Part 16A)".

6 Section 29EB

Repeal the section.

7 Paragraphs 29G(2)(e) and (f)

Omit "under section 29EB", substitute "under subsection 131D(1) or

131DA(1)".

8 Section 29JB

Repeal the section.

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9 Section 29JD

Omit "29JB", substitute "131DD".

10 Subsection 29K(2) (note)

Omit "(see section 29EB)", substitute "(see paragraph 131D(2)(b))".

11 After Part 16

Insert:

Part 16A--APRA's powers to issue directions

Division 1--General powers to issue directions

131D APRA may give directions to an RSE licensee in relation to

licensee's own conduct

(1) APRA may give an RSE licensee a direction of a kind mentioned

in subsection (2) if APRA has reason to believe that:

(a) the RSE licensee has contravened a provision of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(ii) the Financial Sector (Collection of Data) Act 2001; or

(b) the RSE licensee is likely to contravene a provision

mentioned in paragraph (a), and the direction is reasonably

necessary to deal with one or more prudential matters in

relation to the RSE licensee; or

under this Act or the Financial Sector (Collection of Data)

Act 2001; or

(d) the direction is necessary in the interests of beneficiaries of a

registrable superannuation entity of the RSE licensee; or

(e) the RSE licensee is, or is about to become, unable to meet its

liabilities (whether as trustee of a registrable superannuation

entity or otherwise); or

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(f) there is, or there might be, a material risk to the security of

the assets of the RSE licensee (whether held as trustee of a

registrable superannuation entity or otherwise); or

(g) there has been, or there might be, a material deterioration in

the financial condition of:

(i) the RSE licensee; or

(ii) a registrable superannuation entity of which it is trustee;

(h) the RSE licensee is conducting:

(i) its affairs; or

(ii) the affairs of a registrable superannuation entity of

which it is trustee;

in an improper or financially unsound way; or

(i) the failure to issue a direction would materially prejudice the

interests or reasonable expectations of beneficiaries of a

registrable superannuation entity of the RSE licensee; or

(j) the RSE licensee is conducting:

(i) its affairs; or

(ii) the affairs of a registrable superannuation entity of

which it is trustee;

in a way that may cause or promote instability in the

Australian financial system.

(2) APRA may give a direction to do one or more of the following:

(a) to comply with the whole or a part of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(ii) the Financial Sector (Collection of Data) Act 2001;

(b) to comply with the whole or a part of a condition or direction

referred to in paragraph (1)(c);

the following:

(i) to remove a responsible officer of the RSE licensee

from office;

(ii) to ensure that a responsible officer of the RSE licensee

does not take part in the management or conduct of the

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business of the RSE licensee, or the business of a

registrable superannuation entity of the RSE licensee,

except as permitted by APRA;

(iii) to appoint a person as a responsible officer of the RSE

licensee for such term as APRA directs;

(d) to order an audit of:

(i) the affairs of the RSE licensee; or

(ii) the affairs of a registrable superannuation entity of the

RSE licensee;

at the expense of the RSE licensee, by an auditor chosen by

APRA;

(e) to remove an auditor of the RSE licensee, or of a registrable

superannuation entity of the RSE licensee, from office and

appoint another auditor to hold office for such term as APRA

directs;

(f) to order an actuarial investigation of the affairs of a

registrable superannuation entity of the RSE licensee, at the

expense of the RSE licensee and by an actuary chosen by

APRA;

(g) to remove an actuary of a registrable superannuation entity of

the RSE licensee from office and appoint another actuary to

hold office for such term as APRA directs;

(h) not to accept, or to cease to accept (permanently or

temporarily), contributions to a registrable superannuation

entity of the RSE licensee;

(i) not to borrow any amount;

(j) not to pay or transfer any amount or asset to any person, or

create an obligation (contingent or otherwise) to do so;

(k) not to undertake any financial obligation (contingent or

otherwise) on behalf of any other person;

(l) not to discharge any liability of:

(i) the RSE licensee; or

(ii) a registrable superannuation entity of the RSE licensee;

(m) to make changes to the RSE licensee's systems, business

practices or operations (including the RSE licensee's systems

business practices or operations in relation to a registrable

superannuation entity of the RSE licensee);

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(n) to do, or refrain from doing, anything else in relation to the

affairs of:

(i) the RSE licensee; or

(ii) a registrable superannuation entity of the RSE licensee.

(3) A direction under paragraph (2)(j) not to pay or transfer any

amount or asset does not apply to the payment or transfer of money

pursuant to an order of a court or a process of execution.

(4) Without limiting the generality of subsection (2), a direction

referred to in a paragraph of that subsection may:

(a) deal with some only of the matters referred to in that

paragraph; or

(b) deal with a particular class or particular classes of those

matters; or

different classes of matters.

(5) The direction may deal with the time by which, or period during

which, it is to be complied with.

131DA APRA may give directions in relation to the conduct of a

connected entity of an RSE licensee

(1) APRA may give an RSE licensee a direction of a kind mentioned

in subsection (5), or a direction to cause a connected entity of the

RSE licensee to do or not to do something of a kind mentioned in

subsection (5), if APRA has reason to believe that:

(a) a connected entity of the RSE licensee has contravened a

provision of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(ii) the Financial Sector (Collection of Data) Act 2001; or

(b) a connected entity of the RSE licensee is likely to contravene

a provision mentioned in paragraph (a); or

and is necessary in the interests of beneficiaries of a

registrable superannuation entity of the RSE licensee; or

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(d) a connected entity of the RSE licensee is, or is about to

become, unable to meet the connected entity's liabilities; or

(e) there is, or there might be, a material risk to the security of

the assets of a connected entity of the RSE licensee; or

(f) there has been, or there might be, a material deterioration in

the financial condition of a connected entity of the RSE

licensee; or

(g) a connected entity of the RSE licensee is conducting the

entity's affairs in an improper or financially unsound way; or

(h) a connected entity of the RSE licensee is conducting the

entity's affairs in a way that may cause or promote instability

in the Australian financial system; or

(i) a connected entity of the RSE licensee is conducting the

entity's affairs in a way that may cause it to be unable to

continue to supply products or services to the RSE licensee,

or a registrable superannuation entity of the RSE licensee; or

(j) the direction relates to a connected entity of the RSE licensee

and the failure to issue a direction would materially prejudice

the interests of beneficiaries of a registrable superannuation

entity of the RSE licensee.

(2) However, APRA can only make a direction under subsection (1) as

a result of a ground referred to in paragraph (1)(d), (e), (f), (g), (h)

or (i) if APRA considers that the direction is reasonably necessary

to ensure that the RSE licensee's duties as trustee of a registrable

superannuation entity are properly performed.

(3) APRA may give a connected entity of an RSE licensee a direction

of a kind mentioned in subsection (5) if:

(a) APRA has given the RSE licensee a direction under

subsection (1) because one or more of the grounds referred to

in that subsection have been satisfied in respect of the

connected entity; or

(b) APRA may give the RSE licensee a direction under

subsection (1) because one or more of the grounds referred to

in that subsection have been satisfied in respect of the

connected entity.

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(4) APRA cannot give a direction under subsection (3) to a connected

entity of a kind specified in regulations (if any) made for the

purposes of this subsection.

(5) APRA may give a direction to do one or more of the following:

(a) to comply with the whole or a part of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(ii) the Financial Sector (Collection of Data) Act 2001;

(b) if the connected entity is a body corporate:

(i) to remove a responsible officer of the entity from office;

(ii) to ensure that a responsible officer of the entity does not

take part in the management or conduct of the business

of the entity (including any business the entity conducts

in relation to a registrable superannuation entity of the

RSE licensee) except as permitted by APRA; or

(iii) to appoint a person as a responsible officer of the entity

for such term as APRA directs;

(i) the affairs of the connected entity; or

(ii) the affairs of a registrable superannuation entity of the

RSE licensee;

at the expense of the connected entity, by an auditor chosen

by APRA;

(d) to:

(i) remove from office an auditor of the connected entity,

or of a registrable superannuation entity of the RSE

licensee; and

(ii) appoint another auditor to hold office for such term as

APRA directs;

(e) to order an actuarial investigation of the affairs of a

registrable superannuation entity of the RSE licensee, at the

expense of the connected entity and by an actuary chosen by

APRA;

(f) to:

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(i) remove from office an actuary of a registrable

superannuation entity of the RSE licensee; and

(ii) appoint another actuary to hold office for such term as

APRA directs;

(g) not to borrow any amount;

(h) not to pay or transfer any amount or asset to any person, or

create an obligation (contingent or otherwise) to do so;

(i) not to undertake any financial obligation (contingent or

otherwise) on behalf of any other person;

(j) not to discharge any liability of one or more of the following:

(i) the connected entity;

(ii) a registrable superannuation entity of the RSE licensee;

(k) to make changes to the connected entity's systems, business

practices or operations (including the connected entity's

systems, business practices or operations in relation to a

registrable superannuation entity of the RSE licensee);

(l) to do, or refrain from doing, anything else in relation to the

affairs of:

(i) the connected entity; or

(ii) a registrable superannuation entity of the RSE licensee.

(6) A direction under paragraph (5)(h) not to pay or transfer any

amount or asset does not apply to the payment or transfer of money

pursuant to an order of a court or a process of execution.

(7) Without limiting the generality of subsection (5), a direction

referred to in a paragraph of that subsection may:

(a) deal with some only of the matters referred to in that

paragraph; or

(b) deal with a particular class or particular classes of those

matters; or

different classes of matters.

(8) The direction may deal with the time by which, or period during

which, it is to be complied with.

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131DB Machinery provisions relating to directions under this

Division

(1) A direction under this Division must:

(a) be given by notice in writing:

(i) in the case of a direction to an RSE licensee under

subsection 131D(1) or 131DA(1)--to the RSE licensee;

and

(ii) in the case of a direction to a connected entity of an

RSE licensee under subsection 131DA(3)--to the

connected entity of the RSE licensee and the RSE

licensee; and

(b) specify:

(i) in the case of a direction under subsection 131DA(3)--

the ground referred to in subsection 131DA(1) as a

result of which the direction is given; or

(ii) otherwise--the ground referred to in

subsection 131D(1) or 131DA(1) as a result of which

the direction is given.

(2) A direction under this Division is not a legislative instrument.

Note:

Under paragraph 11(2)(c) of the Legislation Act 2003, APRA may

(3) In deciding whether to give a direction under subsection 131D(1)

to an RSE licensee, APRA may disregard any external support for

the RSE licensee.

(4) In deciding whether to give a direction under subsection 131DA(1)

or (3), APRA may disregard any external support for the RSE

licensee, or the connected entity of the RSE licensee, in relation to

which the direction is given.

(5) The regulations may specify that a particular form of support is not

external support for the purposes of subsection (3) or (4).

131DC Varying or revoking a direction under this Division

(1) APRA may:

(a) vary a direction given to an RSE licensee under this Division,

by notice in writing to the RSE licensee; or

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(b) vary a direction given to a connected entity of an RSE

licensee under this Division, by notice in writing to the

connected entity and the RSE licensee;

if, at the time of the variation, APRA considers that the variation is

necessary and appropriate.

(2) A direction under this Division has effect until APRA revokes it.

(3) APRA may:

(a) revoke a direction given to an RSE licensee under this

Division, by notice in writing to the RSE licensee; or

(b) revoke a direction given to a connected entity of an RSE

licensee under this Division, by notice in writing to the

connected entity and the RSE licensee;

if, at the time of revocation, APRA considers that the direction is

no longer necessary or appropriate.

131DD Non-compliance with a direction

Failure to comply with a direction given to an RSE licensee--

failure by the RSE licensee

(1) A person commits an offence if:

(a) the person is an RSE licensee or a member of a group of

individual trustees that is an RSE licensee; and

(b) a direction is given to the RSE licensee under this Division;

and

(d) doing, or failing to do, the thing results in a contravention of

the direction.

Penalty: 100 penalty units.

Note:

If a body corporate is convicted of an offence against this subsection,

subsection 4B(3) of the Crimes Act 1914 allows a court to impose a

fine of up to 5 times the penalty stated above.

Failure to comply with a direction given to an RSE licensee--

failure by an officer of the RSE licensee

(2) A person commits an offence if:

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(a) the person is an officer of an RSE licensee that is a body

corporate; and

(b) the officer fails to take reasonable steps to ensure that the

RSE licensee complies with a direction given to it under this

Division; and

complies with the direction or with a class of directions that

includes the direction; and

(d) the RSE licensee does not comply with the direction.

Penalty: 100 penalty units.

Failure to comply with a direction given to a connected entity of an

RSE licensee--failure by the connected entity

(3) A connected entity of an RSE licensee commits an offence if:

(a) a direction is given to the connected entity under this

Division; and

(b) the connected entity does, or fails to do, something; and

the direction.

Penalty: 100 penalty units.

Note:

If a body corporate is convicted of an offence against this subsection,

subsection 4B(3) of the Crimes Act 1914 allows a court to impose a

fine of up to 5 times the penalty stated above.

Failure to comply with a direction given to a connected entity of an

RSE licensee--failure by an officer of the connected entity

(4) A person commits an offence if:

(a) the person is an officer of a body corporate that is a

connected entity of an RSE licensee; and

(b) the officer fails to take reasonable steps to ensure that the

connected entity complies with a direction given to it under

this Division; and

complies with the direction or with a class of directions that

includes the direction; and

(d) the connected entity fails to comply with the direction.

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Penalty: 100 penalty units.

Offence for each day on which a person continues to commit an

offence

(5) If a person commits an offence against subsection (1), (2), (3) or

(4), the person commits an offence against that subsection in

respect of:

(a) the first day on which the offence is committed; and

(b) each subsequent day (if any) on which the circumstances that

gave rise to the person committing the offence continue

(including the day of conviction for any such offence or any

later day).

Note:

This subsection is not intended to imply that section 4K of the Crimes

Act 1914 does not apply to offences against this Act or the regulations.

Strict liability

(6) Subsections (1), (2), (3) and (4) are offences of strict liability.

Meaning of officer

(7) In this section, officer has the meaning given by section 9 of the

Corporations Act 2001.

Division 3--Provisions relating to all directions under this

Act

131F APRA may give more than one direction

(1) APRA is not precluded from giving a direction under a provision

of this Act because APRA has given, or may give, another

direction under that or any other provision of this Act.

(2) The kinds of direction that may be given under one provision of

this Act are not limited by any direction given, or that may be

given, under that or any other provision of this Act.

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131FA RSE licensee and connected entity have power to comply

with a direction under this Act

(1) An RSE licensee has power to comply with a direction given to the

RSE licensee under this Act despite anything in its constitution or

any contract or arrangement to which it is a party.

(2) If the direction requires the RSE licensee to cause a connected

entity to do, or not to do, something:

(a) the RSE licensee has power to cause the connected entity to

do, or to not to do, the thing; and

(b) the connected entity has power to do, or not to do, the thing;

despite anything in the connected entity's constitution or any

contract or arrangement to which the connected entity is a party.

(3) A connected entity of an RSE licensee has power to comply with a

direction given to the connected entity under this Act despite

anything in its constitution or any contract or arrangement to which

it is a party.

131FB Protection from liability--general

(1) A person is not subject to any liability to any person in respect of

anything done, or omitted to be done, in good faith and without

negligence in the exercise or performance, or the purported

exercise or performance, of powers, functions or duties under this

Act.

(2) To avoid doubt, any information provided by a person to APRA

under section 130A is taken, for the purposes of subsection (1), to

be provided in the exercise of a power or the performance of a

function under this Act.

(3) Subsection (1) does not apply to a person referred to in section 58

of the Australian Prudential Regulation Authority Act 1998 and, to

avoid doubt, does not affect the operation of that section.

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131FC Protection from liability--directions

(1) An action, suit or proceeding (whether criminal or civil) does not

lie against a person in relation to anything done, or omitted to be

done, in good faith by the person if:

(a) the person does the thing, or omits to do the thing, for the

purpose of complying with a direction under this Act given

by APRA to an RSE licensee, or a connected entity of an

RSE licensee; and

(b) it is reasonable for the person to do the thing, or to omit to do

the thing, in order to achieve that purpose; and

(i) an officer of the RSE licensee, or of the connected entity

of the RSE licensee;

(ii) an employee or agent of the RSE licensee, or of the

connected entity of the RSE licensee.

(2) In subsection (1):

employee:

(a) of an RSE licensee, includes a person engaged to provide

advice or services to the RSE licensee; or

(b) of a connected entity of an RSE licensee, includes a person

engaged to provide advice or services to the connected entity.

officer has the meaning given by section 9 of the Corporations Act

2001.

131FD Protection from liability--provisions do not limit each other

The following provisions do not limit the operation of each other:

(a) section 336B;

(b) section 131FB;

(d) section 58 of the Australian Prudential Regulation Authority

Act 1998.

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131FE Informing the Treasurer about issue and revocation of

directions

(1) If the Treasurer requests APRA to provide information about:

(a) any directions given under this Act to a particular entity; or

(b) any directions given under this Act, during a specified period,

to any entity of a specified kind;

APRA must comply with the request.

(2) APRA may provide any information that it considers appropriate to

the Treasurer about:

(a) any directions given under this Act at any time; or

(b) any revocations of any such directions.

(3) If APRA provides the Treasurer with information about a direction

and then later revokes the direction, APRA must notify the

Treasurer of the revocation of the direction as soon as practicable

after the revocation. Failure to notify the Treasurer does not affect

the validity of the revocation.

12 After subsection 349B(6)

Insert:

(6A) If, apart from this section, this Act would result in such an

acquisition of property because it would require a person to comply

with a direction given under this Act, then despite any other

provision of this Act, the person is not required to comply with the

direction in circumstances that would result in such an acquisition.

13 At the end of subsection 349B(7)

Add:

; and (f) a direction given under this Act.

14 Application

The amendments made by this Schedule apply to events that occur, and

anything that a person does or fails to do, on or after the commencement

of this Schedule.

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Schedule 6--Portfolio holdings disclosure

Corporations Act 2001

1 Subsection 1017BB(1)

Repeal the subsection, substitute:

Obligation to publicise investment information

(1) The trustee, or the trustees, of a registrable superannuation entity

(the reporting entity) must make the following information about

each of the entity's investment options publicly available on the

entity's website no later than 90 days after each reporting day:

(a) sufficient information to identify each investment item (a

disclosable item) allocated to the investment option at the

end of the reporting day that:

(i) is held by the reporting entity or an associated entity of

the reporting entity; and

(ii) is not an investment in an associated entity of the

reporting entity;

(b) sufficient information to identify the value, and the weighting

or exposure, at the end of the reporting day of each

disclosable item;

of the reporting day of all disclosable items.

(1A) However, the regulations may provide that subsection (1) applies

for a prescribed kind of disclosable item so that:

(a) paragraphs (1)(a) and (b) need not be complied with for each

item of that kind; and

(b) instead, only the following need be disclosed:

(i) the name of that kind of item;

(ii) the total value, and the total weighting or exposure, at

the end of the reporting day of all items of that kind.

2 Subsections 1017BB(4) and (5)

Repeal the subsections, substitute:

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Full exemption

(4) Subsection (1) does not apply to the trustee, or the trustees, of a

registrable superannuation entity if the entity is:

(a) a pooled superannuation trust; or

(b) a single member fund; or

Partial exemptions

(5) Subsection (1) does not apply to the trustee, or the trustees, of a

registrable superannuation entity for:

(a) an investment option of the entity that has been closed to new

members for at least 5 years; or

(b) an investment item that is not a material investment in

accordance with regulations prescribed for the purposes of

this paragraph; or

benefit interest (within the meaning of the Income Tax

Assessment Act 1997); or

(d) an investment item invested in a life policy, or investment

account contract, of a kind described in

subparagraph 1017BA(4)(a)(i), (ii) or (iii); or

(e) an investment item of a kind prescribed by the regulations for

the purposes of this paragraph.

Note:

An investment item covered by any of paragraphs (b) to (e) will not be

a disclosable item.

(5A) Subject to subsection (1A), subsection (1) does not apply to the

trustee, or the trustees, of a registrable superannuation entity for up

to 5% of the investment items (other than derivatives) referred to in

paragraph (1)(a) for the investment option if:

(a) those investment items are commercially sensitive; and

(b) making information publicly available about those

investment items would be detrimental to the interests of the

entity's members.

The trustee, or the trustees, of the entity may determine which

investment items make up that 5%.

Portfolio holdings disclosure Schedule 6

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

Note:

Regulations under subsection (1A) may require the disclosure of the

total value of all investment items of this kind.

Definitions

3 Subsection 1017BB(6)

Insert:

investment item means an asset or a derivative.

investment option includes:

(a) a choice product that does not contain multiple investment

options; and

(b) a MySuper product (within the meaning of the

Superannuation Industry (Supervision) Act 1993).

member, in relation to a superannuation fund (within the meaning

of the Superannuation Industry (Supervision) Act 1993), has the

same meaning as in that Act.

pooled superannuation trust has the same meaning as in the

Superannuation Industry (Supervision) Act 1993.

small APRA fund means a regulated superannuation fund (within

the meaning of the Superannuation Industry (Supervision) Act

1993) with less than 5 members.

4 Sections 1017BC, 1017BD and 1017BE

Repeal the sections.

5 Paragraph 1020E(1)(c)

Omit ", or provided under subsection 1017BC(3),".

6 Subsection 1020E(11) (paragraph (d) of the definition of

defective)

Omit "or information provided under section 1017BC".

7 Section 1021NC

Repeal the section.

Schedule 6 Portfolio holdings disclosure

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

8 Subparagraph 1022B(1)(g)(iii)

Omit "; or", substitute ".".

9 Paragraph 1022B(1)(h)

Repeal the paragraph.

10 Paragraph 1022B(2)(f)

Omit ", (g) or (h)", substitute "or (g)".

11 Paragraph 1022B(3)(f)

Omit "; or", substitute ".".

12 Paragraph 1022B(3)(g)

Repeal the paragraph.

13 Subsection 1022B(7B)

Omit ", (g)(ii) or (h)(ii)", substitute "or (g)(ii)".

14 Subsection 1022B(7C)

Omit ", (g)(iii) or (h)(iii)", substitute "or (g)(iii)".

15 Subparagraph 1041H(3)(a)(iii)

Omit ", 1021NB or 1021NC", substitute "or 1021NB".

16 Subparagraph 1041K(1)(a)(iii)

Omit ", 1021NB or 1021NC", substitute "or 1021NB".

17 Section 1540

Omit "30 June 2014", substitute "31 December 2018".

18 Section 1541

Repeal the section.

19 After Part 10.22 of Chapter 10

Insert:

Portfolio holdings disclosure Schedule 6

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

Part 10.22A--Transitional provisions relating to

the Treasury Laws Amendment (Improving

Accountability and Member Outcomes in

Superannuation Measures No. 1) Act 2017

1541A Application of amendments relating to portfolio holdings

disclosure

The amendments of section 1017BB made by Schedule 6 to the

Treasury Laws Amendment (Improving Accountability and

Member Outcomes in Superannuation Measures No. 1) Act 2017

apply in relation to the reporting day that is 31 December 2018 and

to later reporting days.

20 Schedule 3 (table items 308AG, 308AH and 308AI)

Repeal the items.

Superannuation Industry (Supervision) Act 1993

21 Section 38A (subparagraph (c)(ii) of the definition of

regulatory provision)

Omit "(3);", substitute "(3).".

22 Section 38A (subparagraph (c)(iii) of the definition of

regulatory provision)

Repeal the subparagraph.

Schedule 7 Annual members' meetings

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

Schedule 7--Annual members' meetings

Superannuation Industry (Supervision) Act 1993

1 Subparagraph 6(1)(a)(i)

Omit "and sections 29QB and 29QC", substitute "and sections 29P to

29QC".

2 Subparagraph 6(1)(c)(ia)

Omit "and sections 29QB and 29QC", substitute "and sections 29P to

29QC".

3 Subsection 10(1)

Insert:

annual members' meeting, for a registrable superannuation entity,

means a meeting of members of the entity held under

subsection 29P(1) for a year of income of the entity.

4 Division 5 of Part 2B (heading)

Repeal the heading, substitute:

Division 5--RSE licensees must provide information about

registrable superannuation entities

5 Before section 29QB

Insert:

Subdivision A--Annual members' meetings

29P Annual members' meeting

RSE licensees must hold annual members' meetings

(1) The RSE licensee of a registrable superannuation entity must hold

an annual meeting of members of the entity for each year of

income of the entity.

Annual members' meetings Schedule 7

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

Notice of meeting

(2) The RSE licensee must give notice of the annual members'

meeting to each of the following:

(a) all members of the registrable superannuation entity;

(b) if the RSE licensee is a body corporate--all responsible

officers of the body corporate;

superannuation entity for the year of income of the entity;

(d) any person who has been an actuary of the registrable

superannuation entity during the year of income of the entity.

(3) The RSE licensee must:

(a) include in the notice:

(i) the time and location of the annual members' meeting;

and

(ii) if the annual members' meeting to be held by electronic

means--details of how the meeting can be attended

electronically; and

(iii) the agenda of matters to be discussed at the annual

members' meeting; and

(b) include with the notice any other information prescribed by

the regulations; and

with the notice, in the manner (if any) prescribed by the

regulations; and

(d) give the notice, and any information required to be included

with the notice:

(i) no later than 6 months after the end of the year of

income of the entity; and

(ii) at least 21 days before the meeting.

Timing of meeting

(4) The meeting must be held within 3 months after the notice of the

meeting is given in accordance with subsections (2) and (3).

Schedule 7 Annual members' meetings

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

Conduct of an annual members' meeting

(5) At the annual members' meeting, the RSE licensee must give

members of the registrable superannuation entity reasonable

opportunities to ask questions about:

(a) the registrable superannuation entity; and

(b) if the RSE licensee is a body corporate--the RSE licensee

and the responsible officers of the RSE licensee; and

the individual trustees; and

(d) any audit of the registrable superannuation entity for the year

of income of the entity; and

(e) any actuarial investigation of the registrable superannuation

entity during the year of income of the entity; and

(f) any information included with the notice of the meeting.

Minutes of meeting

(6) The RSE licensee must ensure that:

(a) minutes of the annual members' meeting are prepared; and

(b) those minutes include the answers to any questions asked at

the meeting that a person is obliged to answer either at or

after the meeting under sections 29PB, 29PC, 29PD or 29PE;

and

registrable superannuation entity's website.

Subsection (1) does not apply in relation to certain entities

(7) Subsection (1) does not apply in relation to a registrable

superannuation entity that is:

(a) a superannuation fund with fewer than 5 members; or

(b) an excluded approved deposit fund; or

(d) an eligible rollover fund.

Offence

(8) A person commits an offence if:

(a) the person is:

Annual members' meetings Schedule 7

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

(i) a body corporate that is an RSE licensee; or

(ii) a member of a group of individual trustees that is an

RSE licensee; and

(b) the RSE licensee contravenes subsection (1), (2), (3), (4), (5)

or (6).

Penalty: 50 penalty units.

29PA Obligation to attend an annual members' meeting

(1) If:

(a) the RSE licensee of a registrable superannuation entity is a

body corporate; and

(b) any of the following persons is given notice of an annual

members' meeting for the entity in accordance with

subsections 29P(2) and (3):

(i) the Chair of the board of directors of the RSE licensee;

(ii) a director of the RSE licensee;

(iii) an executive officer of the RSE licensee;

the person must attend the meeting.

Penalty: 50 penalty units.

(2) A member of a group of individual trustees that is an RSE licensee

of a registrable superannuation entity must attend an annual

members' meeting for the entity.

Penalty: 50 penalty units.

(3) A person who has been an auditor of a registrable superannuation

entity for a year of income of the entity, must attend an annual

members' meeting for the entity relating to that year if the person

is given notice of the meeting in accordance with

subsections 29P(2) and (3).

Penalty: 50 penalty units.

(4) A person who has been an actuary of a registrable superannuation

entity during a year of income of the entity must attend an annual

members' meeting for the entity relating to that year if the person

Schedule 7 Annual members' meetings

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

is given notice of the meeting in accordance with

subsections 29P(2) and (3).

Penalty: 50 penalty units.

(5) Subsections (1), (2), (3) and (4) do not apply to a person if the

person has a reasonable excuse for not attending.

(6) Subsection (1) does not apply to a director of an RSE licensee of a

registrable superannuation entity, if:

(a) other directors of the entity have attended the meeting; and

(b) the number of directors of the entity who attended the

meeting is no less than the number of directors that would

constitute a quorum for a meeting of the board of directors of

the entity.

29PB Obligation on responsible officers of RSE licensees to answer

questions

(1) This section applies if a member of a registrable superannuation

entity asks a responsible officer of the RSE licensee for the entity a

question at the meeting.

(2) The responsible officer of the RSE licensee must answer the

question at the meeting or, if it is not reasonably practicable to do

so, within 1 month after the meeting.

Penalty: 50 penalty units.

(3) Subsection (2) does not apply:

(a) if the question is not relevant to:

(i) an action, or failure to act, by the RSE licensee in

relation to the registrable superannuation entity or one

or more members of the registrable superannuation

entity; or

(ii) the registrable superannuation entity; or

(b) if it would be in breach of the governing rules of the

registrable superannuation entity, this Act or any other law to

answer the question; or

Annual members' meetings Schedule 7

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

members of the registrable superannuation entity, taken as a

whole; or

(d) in any other circumstances prescribed by the regulations.

29PC Obligation on individual trustees to answer questions

(1) This section applies if a member of a registrable superannuation

entity asks an individual trustee for the entity a question at an

annual members' meeting for the entity.

(2) The individual trustee must answer the question at the meeting or,

if it is not reasonably practicable to do so, within 1 month after the

meeting.

Penalty: 50 penalty units.

(3) Subsection (2) does not apply:

(a) if the question is not relevant to:

(i) an action, or failure to act, by the RSE licensee in

relation to the registrable superannuation entity or one

or more members of the registrable superannuation

entity; or

(ii) the registrable superannuation entity; or

(b) if it would be in breach of the governing rules of the

registrable superannuation entity, this Act or any other law to

answer the question; or

members of the registrable superannuation entity, taken as a

whole; or

(d) in any other circumstances prescribed by the regulations.

29PD Obligation on auditor to answer questions

(1) This section applies if a member of a registrable superannuation

entity asks a person who has been an auditor of the registrable

superannuation entity for a year of income of the entity a question

at an annual members' meeting for the entity for the year.

(2) The auditor must answer the question at the meeting or, if it is not

reasonably practicable to do so, within 1 month after the meeting.

Schedule 7 Annual members' meetings

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

Penalty: 50 penalty units.

(3) Subsection (2) does not apply:

(a) if the question is not relevant to:

(i) an action, or failure to act, by the RSE licensee in

relation to the registrable superannuation entity or one

or more members of the registrable superannuation

entity; or

(ii) the registrable superannuation entity; or

(iii) an audit of the registrable superannuation entity carried

out by the auditor; or

(iv) any matter that might reasonably be expected to be

apparent to the auditor of the entity in relation to the

entity; or

(b) if it would be in breach of the governing rules of the

registrable superannuation entity, this Act or any other law to

answer the question; or

members of the registrable superannuation entity, taken as a

whole; or

(d) in any other circumstances prescribed by the regulations.

29PE Obligation on actuary to answer questions

(1) This section applies if a member of a registrable superannuation

entity asks a person who has been an actuary of the registrable

superannuation entity during a year of income of the entity a

question at an annual members' meeting for the entity for the year.

(2) The actuary must answer the question at the meeting or, if it is not

reasonably practicable to do so, within 1 month after the meeting.

Penalty: 50 penalty units.

(3) Subsection (2) does not apply:

(a) if the question is not relevant to:

(i) an action, or failure to act, by the RSE licensee in

relation to the registrable superannuation entity or one

or more members of the registrable superannuation

entity; or

Annual members' meetings Schedule 7

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

(ii) the registrable superannuation entity; or

(iii) an actuarial investigation of the registrable

superannuation entity carried out by the actuary; or

(iv) any matter that might reasonably be expected to be

apparent to the actuary of the entity in relation to the

entity; or

(b) if it would be in breach of the governing rules of the

registrable superannuation entity, this Act or any other law to

answer the question; or

members of the registrable superannuation entity, taken as a

whole; or

(d) in any other circumstances prescribed by the regulations.

Subdivision B--Other obligations in relation to information

6 Application

The amendments made by this Schedule apply in relation to years of

income of a registrable superannuation entity beginning on or after the

commencement of the Schedule.

Schedule 8 Reporting standards

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

No. , 2017

Schedule 8--Reporting standards

Australian Prudential Regulation Authority Act 1998

1 Subsection 56(1) (paragraph (ca) of the definition of

protected document)

After "13(4A)", insert "or (4D)".

2 Subsection 56(1) (paragraph (ca) of the definition of

protected information)

After "13(4A)", insert "or (4D)".

Financial Sector (Collection of Data) Act 2001

3 After subsection 13(4C)

Insert:

(4D) A reporting standard may require an RSE licensee to provide

information in relation to any money, consideration or other benefit

given to another entity by the RSE licensee out of the assets of a

registrable superannuation entity of the RSE licensee, including

information about the following:

(a) details of the entity to which the money, consideration or

other benefit is given;

(b) the purpose for which the money, consideration or other

benefit is given;

used by the entity to which it is given, and any entity with

which that entity deals.

(4E) If:

(a) a reporting standard requires an RSE licensee to provide

information (the required information) in relation to any

money, consideration or other benefit given to another entity

by the RSE licensee out of the assets of a registrable

superannuation entity of the RSE licensee; and

Reporting standards Schedule 8

No. , 2017

Treasury Laws Amendment (Improving Accountability and Member

Outcomes in Superannuation Measures No. 1) Bill 2017

(b) the money, consideration or other benefit is given under a

contract or other arrangement between the RSE licensee and

the other entity (the second party);

the contract or arrangement is taken to include:

consideration or benefit is given or as soon as reasonably

practicable after that time, to notify the second party that the

money, consideration or benefit is given out of the assets of a

registrable superannuation entity; and

(d) a term requiring the second party, if notified by the RSE

licensee in accordance with paragraph (c), to, as soon as

reasonably practicable after being notified, provide the RSE

licensee with the required information of which the second

party is aware.

(4F) Subsections (4D) and (4E) do not apply in relation to any money,

consideration or other benefit given to another entity by the RSE

licensee if it is an investment of assets of the RSE licensee's

registrable superannuation entities by the RSE licensee.

4 Application

--reporting standards

(1)

Subsection 13(4E) of the Financial Sector (Collection of Data) Act

2001, as inserted by this Schedule, applies in relation to a contract or

arrangement whether entered into before, on or after this item

commences.

(2)

Despite subitem (1), that subsection does not apply in relation to a

contract or arrangement that is entered into before this item commences,

to the extent that the operation of a reporting standard mentioned in that

subsection would result in an acquisition of property (within the

meaning of paragraph 51(xxxi) of the Constitution) from a person

otherwise than on just terms (within the meaning of that paragraph of

the Constitution).

(3)

If, because of subitem (2), an RSE licensee is unable to obtain particular

information that a reporting standard (within the meaning of the

Financial Sector (Collection of Data) Act 2001) requires an RSE

licensee to provide in relation to any money, consideration or other

benefit given to another entity by the RSE licensee, or a person

connected with the RSE licensee, out of the assets of a registrable

Commonwealth of Australia Bills

TREASURY LAWS AMENDMENT (IMPROVING ACCOUNTABILITY AND MEMBER OUTCOMES IN SUPERANNUATION MEASURES NO. 1) BILL 2017