Financial industry shifting focus from regulation to innovation

Financial industry moving from regulation to innovationA survey released by FSC and DST show that financial industry CEOs are looking to refocus efforts from meeting regulatory requirements to product innovation.

Martin Spedding, CEO of DST Bluedoor, said in the 14th annual FSC-DST CEO Survey that:

“Preparing for MySuper, SuperStream and FoFA has been disruptive and costly, diverting resources and attention away from other more productive areas. As this implementation phase nears its end-point, the industry’s leaders are re-focusing on the opportunities of the future.”

However there are impediments to introducing something new, with 42% of respondents saying they were unable to release a new product or process due to regulation.

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Easier employer contributions reporting under draft regulations

The Treasury department has released draft SuperStream regulations for consultation which would reduce the number of different super funds too which employers will need to report contributions data. These changes, if registered, would mean that from 1 July 2015 employers would only have to report contributions data to their default… Read More »Easier employer contributions reporting under draft regulations

CPA releases guidance notes for advising on SMSFs

CPA guidance notes - advising on set up of SMSFs, investing in property with SMSFsCPA Australia has released a set of guidance notes for CPA public practitioners advising SMSFs on set up and investing in property.

Advising on set up of SMSFs

CPA notes that “accountants are the dominant source of structuring advice on SMSFs and have proved to be strong proponents of their advantages”, and as such CPA provides the guidance note as a checklist for advising clients.

CPA points out that SMSFs are not only a financial product, but also a structure to hold financial products and so both financial and structuring aspects need to be considered. Some of the advantages listed by CPA of SMSFs are:

  • control over retirement savings
  • flexibility of choosing investments
  • opportunities for estate planning

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Current State of Superannuation Changes – July 2014

Superannuation Changes - July 2014

Pending Superannuation Changes – July 2014

Minerals Resource Rent Tax

Slower increase in Superannuation Guarantee

The Government had intended the  Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 [No. 2] to slow the rate of the Superannuation Guarantee and repeal the Low Income Superannuation Contribution (LISC), among other changes. However as the Government hadn’t changed the Superannuation Guarantee rates in the bill from March, when it was first submitted, it did not reflect the SG rates  announced in the 2014 Budget. When the Government tried to amend the SG rates in the bill it was blocked by the Senate. Instead the Senate passed amendments stripping out the changes to the Super Guarantee – meaning it would stay at the currently legislated rates.

Read More »Current State of Superannuation Changes – July 2014

ATO releases SuperStream video for tax professionals

The ATO has released a video for tax professionals with advice for implementing SuperStream for clients, including businesses, SMSFs and as part of a SMSF administration service.

Some important things covered in the video:

  • Employers can start using SuperStream from 1 July 2014
  • The ATO expects most employers will be using SuperStream by December 2014
  • SuperStream standardises contributions data “so whether contributions are being sent to a default fund, a major choice fund or an employee’s self-managed super fund (SMSF), super contributions are treated in a similar way”
  • The ATO encourages all employers to have a plan to implement SuperStream – “the earlier a business transitions in to SuperStream, the earlier it will see the benefits and the less chance it will get caught short for time”
  • The ATO is committed to raising awareness and educating in the first two years of the SuperStream process

Read More »ATO releases SuperStream video for tax professionals

SPAA announces SMSF LRBA lender & adviser guidelines

SPAA SMSF Limited Recourse Borrowing Arrangements (LRBAs) guidelines - advisers and lendersSPAA has released guidelines for lenders and advisers working with SMSF Limited Recourse Borrowing Arrangements (LRBAs), with NAB the first bank to sign up to use the guidelines and other major lenders in the “pipeline”.

SPAA CEO Andrea Slattery says that, with the release of the guidelines, “Government and regulators can have a high degree of confidence that LRBAs are being used appropriately and that the industry has best practice guidelines for lending and advice in place.”

SPAA LRBA Lenders Guidelines

According to SPAA the LRBA guidelines for lenders are “intended to establish banking industry standards” to work with other lending policies. The guidelines include items such as:

  • Seeking acknowledgement from the SMSF trustees that they were recommended to seek expert advice
  • SMSF trustee to certify the SMSF is complying with SIS requirements
  • Lenders to provide information to trustees, including:
    • Details of the LRBA structure
    • “Advantages/risks of LRBAs”

Read More »SPAA announces SMSF LRBA lender & adviser guidelines

Industry vs retail fight over default super funds to continue

The fight over which funds will be default super funds is set to continue, despite a ruling by the Federal Court of Australia.

Federal Court – FSC v Industry Super Australia

The Federal Court of Australia has published the reasons for ruling that the expert panel to determine default super funds under modern awards was improperly constituted, in the case of Financial Services Council Ltd v Industry Super Australia Pty Limited [2014] FCAFC 92.

This Expert Panel of the Fair Work Commission (FWC) was tasked with conducting a review of the default super funds in modern awards, as part of the MySuper changes. The panel is required to comprise either the President of the FWC or someone appointed in the presidents place; at least three experts in the subjects of superannuation, finance or investment management; and three other members of the Commission, who don’t need to be experts.

For this panel the President chose to appoint the Deputy President to sit in his place, and appointed the other members. The issue arose when two of the three expert members of the panel were disqualified due to a conflict of interest and in their place the President appointed another expert and himself to sit on the panel.

Read More »Industry vs retail fight over default super funds to continue

Property schemes’ disclosure to investors ‘disappointing’: ASIC

ASIC review disclosure listed & unlisted property schemes - disappointingASIC has described the results of a review of disclosure by unlisted property schemes to investors, including SMSFs, as “disappointing”.

Mr Tanzer, the ASIC Commissioner, said the results were “disappointing especially when, at a time in the rise of self-managed superannuation funds, many Australians are looking to invest in real estate”. Mr Tanzer also warned that such property schemes “do carry risks as well as opportunities” and that the lack of disclosure is putting investors in a “vulnerable position”.

Read More »Property schemes’ disclosure to investors ‘disappointing’: ASIC