Commonwealth: Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 (Cth)

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 No. 61, 2013 Compilation No. 1 Compilation date: 1 July 2013 Includes amendments up to: Act No. 5, 2015 Registered: 5 March 2015 About this compilation This compilation This is a compilation of the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 that shows the text of the law as amended and in force on 1 July 2013 (the compilation date). This compilation was prepared on 5 March 2015. The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on ComLaw (www.comlaw.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on ComLaw for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on ComLaw for the compiled law. Self-repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Amendments Part 1—Amendments Corporations Act 2001 Fair Work Act 2009 First Home Saver Accounts Act 2008 Superannuation Industry (Supervision) Act 1993 Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012 Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 Superannuation (Resolution of Complaints) Act 1993 Part 2—Application and transitional provisions Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history An Act to amend the law in relation to superannuation, corporations and first home saver accounts, and for related purposes 1 Short title This Act may be cited as the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013. 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. Commencement information Column 1 Column 2 Column 3 Provision(s) 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. 26 June 2013 2. Schedule 1, items 1 to 3 1 July 2013. 1 July 2013 3. Schedule 1, items 4 to 6 1 July 2015. 1 July 2015 4. Schedule 1, items 7 and 8 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 2 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 5. Schedule 1, item 9 1 July 2013. 1 July 2013 6. Schedule 1, item 10 Immediately after the commencement of item 1A of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012. 28 November 2012 6A. Schedule 1, items 10A to 10E Immediately after the commencement of item 8 of Schedule 3 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 July 2013 7. Schedule 1, item 11 Immediately after the commencement of Schedule 1 to the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012. 1 July 2013 8. Schedule 1, item 12 The day after this Act receives the Royal Assent. 27 June 2013 8A. Schedule 1, item 12A Immediately after the commencement of item 22 of Schedule 3 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 July 2013 8B. Schedule 1, items 12B to 12P Immediately after the commencement of item 8 of Schedule 4 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 January 2013 9. Schedule 1, items 13 to 15 1 July 2013. 1 July 2013 10. Schedule 1, items 16 and 17 The day this Act receives the Royal Assent. 26 June 2013 11. Schedule 1, items 18 and 19 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 2 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 12. Schedule 1, item 20 1 July 2013. 1 July 2013 13. Schedule 1, items 21 and 22 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 2 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 14. Schedule 1, item 23 1 July 2013. 1 July 2013 15. Schedule 1, items 24 and 25 The day after this Act receives the Royal Assent. 27 June 2013 16. Schedule 1, items 26 to 37 1 July 2013. 1 July 2013 17. Schedule 1, items 38 to 42B The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 2 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 18. Schedule 1, item 43 Immediately after the commencement of Schedule 1 to the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012. 1 July 2013 19. Schedule 1, items 44 to 47 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 2 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 19A. Schedule 1, item 47A Immediately after the commencement of item 12 of Schedule 4 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 January 2013 20. Schedule 1, items 48 to 61 1 July 2013. 1 July 2013 21. Schedule 1, items 62 to 69 Immediately after the commencement of Schedule 1 to the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Act 2012. 1 July 2013 22. Schedule 1, item 70 1 July 2013. 1 July 2013 However, if item 9 of Schedule 3 to the Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Act 2013 commences on 1 July 2013, the provision(s) do not commence at all. 23. Schedule 1, item 71 Immediately after the commencement of item 9 of Schedule 3 to the Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Act 2013. Does not commence However, if item 9 of Schedule 3 to the Superannuation Legislation Amendment (Reducing Illegal Early Release and Other Measures) Act 2013 does not commence on 1 July 2013, the provision(s) do not commence at all. 24. Schedule 1, items 72 to 110 1 July 2013. 1 July 2013 25. Schedule 1, item 111 Immediately after the commencement of Schedule 7 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 July 2013 26. Schedule 1, items 112 to 115 1 July 2013. 1 July 2013 27. Schedule 1, item 116 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after item 7 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commences. applies) 28. Schedule 1, item 117 Immediately after the commencement of Schedule 7 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 July 2013 29. Schedule 1, items 118 and 119 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after Schedule 6 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012 commences. applies) 29A. Schedule 1, items 119A to 119C Immediately after the commencement of item 13 of Schedule 4 to the Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Act 2012. 1 January 2013 30. Schedule 1, item 120 The day this Act receives the Royal Assent. 26 June 2013 31. Schedule 1, items 121 to 123 The later of: 27 June 2013 (a) the day after this Act receives the Royal Assent; and (paragraph (a) (b) the day after items 12 and 13 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 commence. applies) 32. Schedule 1, items 124 to 128 1 July 2013. 1 July 2013 33. Schedule 1, items 129 and 130 The day this Act receives the Royal Assent. 26 June 2013 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 Schedule(s) Each Act 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. Schedule 1—Amendments Part 1—Amendments Corporations Act 2001 1 Paragraph 211(3)(a) Omit "fund for the purpose of making provision for, or obtaining, superannuation benefits", substitute "fund or scheme for the purposes of making provision for, or obtaining, superannuation benefits (including defined benefits)". 2 Subsection 556(2) (definition of superannuation contribution) Omit "fund for the purposes of making provision for, or obtaining, superannuation benefits", substitute "fund or scheme for the purposes of making provision for, or obtaining, superannuation benefits (including defined benefits)". 3 Paragraph 596AA(2)(b) Omit "fund for the purposes of making provision for, or obtaining, superannuation benefits", substitute "fund or scheme for the purposes of making provision for, or obtaining, superannuation benefits (including defined benefits)". 4 Paragraph 912A(1)(d) Omit "unless the licensee is a body regulated by APRA—", substitute "subject to subsection (4)—". 5 Paragraph 912A(1)(h) Omit "unless the licensee is a body regulated by APRA—", substitute "subject to subsection (5)—". 6 At the end of section 912A Add: (4) Paragraph (1)(d): (a) does not apply to a body regulated by APRA, unless the body is an RSE licensee; and (b) does not apply to an RSE licensee, unless the RSE licensee is also the responsible entity of a registered scheme. (5) Paragraph (1)(h): (a) does not apply to a body regulated by APRA, unless the body is an RSE licensee that is also the responsible entity of a registered scheme; and (b) does not apply to an RSE licensee that is also the responsible entity of a registered scheme, to the extent that the risk relates solely to the operation of a regulated superannuation fund by the RSE licensee. (6) In subsections (4) and (5): regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993. RSE licensee has the same meaning as in the Superannuation Industry (Supervision) Act 1993. 7 Subsection 947D(1) Repeal the subsection, substitute: (1) This section applies (subject to subsection (4)) if the advice is or includes a recommendation that: (a) the client dispose of, or reduce the client's interest in, all or part of a particular financial product and instead acquire all or part of, or increase the client's interest in, another financial product; or (b) the client dispose of, or reduce the client's interest in, a MySuper product offered by a regulated superannuation fund and instead acquire an interest, or increase the client's interest, in another MySuper product or a choice product offered by the fund. 8 At the end of section 947D Add: (5) In this section: MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993. 9 Subsection 964(3) Repeal the subsection, substitute: (3) The definition of custodial arrangement in subsection 1012IA(1) is to be read as if the reference in that definition to an instruction included a reference to: (a) a direction of the kind mentioned in paragraph 58(2)(d) or (da) of the Superannuation Industry (Supervision) Act 1993 that will involve the acquisition of a particular financial product, or a financial product of a particular kind; and (b) a direction of the kind mentioned in subsection 52B(4) of the Superannuation Industry (Supervision) Act 1993 that will involve the acquisition of a particular financial product, or a financial product of a particular kind. 10 Subsection 1017B(9) Insert: MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993. 10A Paragraph 1017BA(1)(c) Repeal the paragraph, substitute: (c) that the information set out in each product dashboard about fees and other costs is updated within 14 days after the end of a period prescribed by the regulations; and 10B Subsection 1017BA(2) Repeal the subsection, substitute: (2) The product dashboard for a MySuper product must set out: (a) the following, worked out in accordance with the regulations in relation to the period or periods prescribed by the regulations: (i) a return target or return targets for the product; (ii) a return or returns for the product; (iii) a comparison or comparisons between return targets and returns for the product; (iv) the level of investment risk that applies to the product; (v) a statement of fees and other costs in relation to the product; and (b) any other information prescribed by the regulations. 10C Subsection 1017BA(3) Repeal the subsection, substitute: (3) Subject to subsection (4), the product dashboard for a choice product must set out: (a) the following for each investment option offered within the choice product, worked out in accordance with the regulations in relation to the period or periods prescribed by the regulations: (i) a return target or return targets for the investment option; (ii) a return or returns for the investment option; (iii) a comparison or comparisons between return targets and returns for the investment option; (iv) the level of investment risk that applies to the investment option; (v) a statement of fees and other costs in relation to the investment option; and (b) any other information prescribed by the regulations. 10D After subsection 1017BA(4) Insert: (4A) The regulations may prescribe circumstances in which assets of a regulated superannuation fund are, or are not, to be treated as invested in a single asset for the purposes of paragraph (4)(c). 10E Subsection 1017BA(5) (definition of quarter) Repeal the definition. 11 Subsection 1526(2) Repeal the subsection, substitute: (2) The definition of custodial arrangement in subsection 1012IA(1) is to be read as if the reference in that definition to an instruction included a reference to: (a) a direction of the kind mentioned in paragraph 58(2)(d) or (da) of the Superannuation Industry (Supervision) Act 1993 that will involve the acquisition of a particular financial product, or a financial product of a particular kind; and (b) a direction of the kind mentioned in subsection 52B(4) of the Superannuation Industry (Supervision) Act 1993 that will involve the acquisition of a particular financial product, or a financial product of a particular kind. 12 After Part 10.21 Insert: Part 10.21A—Transitional provisions relating to the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 1538A Application of amendments relating to contributions to a fund or scheme The amendments made by items 1, 2 and 3 of Schedule 1 to the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 apply to contributions paid or payable on or after 1 July 2013. 1538B Application of amendments relating to Statements of Advice The amendments made by items 7 and 8 of Schedule 1 to the Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Act 2013 apply in relation to personal advice given on or after the commencement of those items. 12A Section 1540 Omit "31 December 2013", substitute "30 June 2014". Fair Work Act 2009 12B Subsection 155A(2) Omit "FWA", substitute "the FWC". 12C Subsection 155A(3) Omit "FWA" (first occurring), substitute "The FWC". 12D Paragraph 155A(3)(a) Omit "FWA", substitute "the FWC". 12E Subsection 155A(4) Omit "FWA", substitute "the FWC". 12F Subsection 155A(5) Omit "FWA" (first occurring), substitute "The FWC". 12G Paragraph 155A(5)(a) Omit "FWA", substitute "the FWC". 12H Clause 10 of Schedule 1 (heading) Omit "FWA", substitute "FWC". 12J Subclause 10(2) of Schedule 1 Omit "FWA", substitute "The FWC". 12K Clause 11 of Schedule 1 (heading) Omit "FWA", substitute "FWC". 12L Subclause 11(2) of Schedule 1 Omit "FWA" (first occurring), substitute "The FWC". 12M Subclause 11(2) of Schedule 1 Omit "FWA" (second occurring), substitute "the FWC". 12N Subclause 11(3) of Schedule 1 Omit "FWA", substitute "The FWC". 12P Clause 12 of Schedule 1 Omit "FWA", substitute "the FWC". First Home Saver Accounts Act 2008 13 Section 18 Insert: responsible officer has the same meaning as in the Superannuation Industry (Supervision) Act 1993. 14 Section 93 Repeal the section, substitute: 93 Capital requirements The capital requirements under this section are met by an applicant if it satisfies the financial requirements that apply under the Prudential Standards. 15 After paragraph 114(2)(a) Insert: (aa) to: (i) a director of an FHSA provider; and (ii) a secretary of an FHSA provider; and (iii) another person who is concerned or takes part in the management of an FHSA provider; where the FHSA provider holds such an authorisation, in the same way that they apply to a responsible officer of an RSE licensee that is a trustee of a public offer superannuation fund; and 16 Paragraph 115(b) Omit ", 2B and 3", substitute "and 2B". 17 After paragraph 115(b) Insert: (ba) Parts 3, 3A and 3B; 18 Paragraph 115(b) Omit "and 2B", substitute ", 2B and 2C". 19 Paragraph 115(d) Omit "and 55A", substitute ", 55A and 55B". 20 Paragraph 115(d) After "and 55B", insert "and subsection 52(7)". 21 Paragraph 115(g) Omit "11", substitute "11A". 22 Paragraph 115(k) Repeal the paragraph, substitute: (k) Parts 32 and 33. 23 Paragraph 115(k) Omit "and 33", substitute ", 33 and 34". 24 After paragraph 116(b) Insert: (ba) treat references to "the prudential standards" as references to the Prudential Standards; 25 Subsection 119(3) Omit "paragraph 146(1)(d)", substitute "paragraph 146(d)". 26 Subsections 120(2) to (7) Repeal the subsections, substitute: (2) Treat the reference in paragraph 52(2)(b) of the Superannuation Industry (Supervision) Act 1993 to a "prudent superannuation trustee" as a reference to a prudent FHSA provider. (3) After subparagraph 52(6)(a)(vii) of the Superannuation Industry (Supervision) Act 1993, insert the following subparagraph: (viia) if the trustee holds an authorisation as an FHSA provider—the risk of capital losses in light of the purpose of the FHSA and the minimum term of the FHSA having regard to subparagraph 32(1)(c)(i) or (ii) of the First Home Saver Accounts Act 2008; (4) Treat the reference in paragraph 52A(2)(b) of the Superannuation Industry (Supervision) Act 1993 to a "prudent superannuation entity director" as a reference to a prudent director of an FHSA provider. Superannuation Industry (Supervision) Act 1993 27 Section 4 (after table item dealing with Part No. 21) Insert: 22 infringement notices 28 Subparagraph 6(1)(a)(x) Omit "23", substitute "22". 29 Subsection 10(1) (definition of actuary) Repeal the definition. 30 Subsection 10(1) (definition of approved auditor) Repeal the definition. 31 Subsection 10(1) Insert: APRA staff member has the same meaning as in the Australian Prudential Regulation Authority Act 1998. 32 Subsection 10(1) (paragraph (dq) of the definition of reviewable decision) Omit "subsection 35A(2A)", substitute "subsection 35A(3)". 33 Subsection 10(1) Insert: RSE actuary means a person who is appointed as an actuary of a registrable superannuation entity. 34 Subsection 10(1) Insert: RSE auditor means a person who is appointed as an auditor of a registrable superannuation entity. 35 Subsection 10(1) Insert: SMSF actuary means a person who is a Fellow or an Accredited Member of the Institute of Actuaries of Australia. 36 Subsection 10(1) Insert: superannuation actuary means: (a) an RSE actuary; or (b) an SMSF actuary. 37 Subsection 10(1) Insert: superannuation auditor means: (a) an RSE auditor; or (b) an approved SMSF auditor. 38 Paragraph 29T(1)(j) Omit "or 29WA", substitute ", 29WA or 29WB". 39 Paragraph 29TC(1)(g) Omit "unless the person who holds the interest consents in writing to that replacement no more than 30 days before it occurs; and", substitute: unless: (i) the person who holds the interest consents in writing to that replacement no more than 30 days before it occurs; or (ii) the person who holds the interest has died and the interest is replaced with a beneficial interest of another class in the fund of a kind, and in the circumstances, prescribed by the regulations; and 39A At the end of subsection 29TC(1) Add: ; and (j) no member who holds a beneficial interest of that class in the fund is precluded from holding a beneficial interest of another class in the fund because of that fact; and (k) no member is precluded from holding a beneficial interest of that class in the fund because the member holds a beneficial interest of another class in the fund. 40 Paragraph 29U(2)(b) Omit "the RSE licensee was authorised", substitute "authority was given". 41 Paragraph 29U(2)(e) Omit "or 29WA", substitute ", 29WA or 29WB". 41A Subsection 29U(4) Omit "Fair Work Australia", substitute "the Fair Work Commission". 41B Subsection 29VA(8) Repeal the subsection, substitute: Administration fee exemption for employees of an employer‑sponsor (8) This rule is satisfied if: (a) the fee is an administration fee charged in relation to one or more members of the fund who hold the MySuper product in accordance with the administration fee exemption for employees of an employee‑sponsor (see section 29VB); and (b) in relation to those members of the fund who hold the MySuper product but in relation to whom the administration fee is not charged in accordance with the administration fee exemption for employees of an employee‑sponsor (the remaining members)—the fee would satisfy the charging rule in subsection (2), (3) or (4) if the remaining members were the only members of the fund who held the MySuper product. Note: In some circumstances, the RSE licensee may wish to offer a MySuper product for the employees of a large employer or its associates (see sections 29T and 29TB). Any fee set for that MySuper product may differ from the equivalent fee set for another MySuper product within the fund. In other circumstances, a separate MySuper product may not be offered, but instead a lower administration fee charged to the employees of a particular employer‑sponsor (see section 29VB). 42 Before paragraph 29VB(1)(a) Insert: (aa) although the trustee, or the trustees, of the fund are authorised to offer the MySuper product, it is not on the basis that section 29TB was satisfied in relation to that class of beneficial interest in the fund; and 42A Paragraph 29VB(1)(b) Omit "one or more", substitute "those". 42B At the end of Division 5 of Part 2C Add: 29VE Percentage‑based administration fees may be capped If, under the governing rules of a regulated superannuation fund: (a) all or part of the administration fee in relation to a MySuper product is charged to those members of the fund who hold the product as a percentage of so much of the account balance of each of those members that relates to the MySuper product; and (b) the amount of the administration fee is capped at a specified amount; and (c) the cap is the same for all of those members; and (d) but for the fact that the administration fee is capped in that way, a charging rule in section 29VA would be satisfied in relation to the administration fee; that charging rule is taken to be satisfied in relation to the administration fee. 43 Section 29VP Repeal the section, substitute: 29VP Contravention of section 29VN (1) A person must not contravene section 29VN. (2) A contravention of subsection (1) is not an offence and a contravention of that subsection does not result in the invalidity of a transaction. (3) A person who suffers loss or damage as a result of the conduct of another person that was engaged in in contravention of subsection (1) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. (4) An action under subsection (3) may be begun at any time within 6 years after the day on which the cause of action arose. 29VPA Contravention of section 29VO (1) A person must not contravene section 29VO. (2) A contravention of subsection (1) is not an offence and a contravention of that subsection does not result in the invalidity of a transaction. (3) A person who suffers loss or damage as a result of the conduct of another person that was engaged in in contravention of subsection (1) may, with the leave of the court, recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. (4) A person may, within 6 years after the day on which the cause of action arose, seek the leave of the court to bring such an action. (5) In deciding whether to grant leave to bring such an action, the court must take into account whether: (a) the applicant is acting in good faith; and (b) there is a serious question to be tried. (6) The court may, in granting leave to bring such an action, specify a period within which the action may be brought. 44 Paragraph 29WA(1)(c) Repeal the paragraph, substitute: (c) either: (i) the person has not given the trustee, or the trustees, of the fund a direction that the contribution is to be invested under one or more specified investment options; or (ii) the person has given the trustee, or the trustees, of the fund a direction that some of the contribution is to be invested under one or more specified investment options, but no such direction has been made in relation to the remainder of the contribution. 45 Subsection 29WA(2) Omit "election has been made" (wherever occurring), substitute "direction has been given". 46 At the end of section 29WA Add: Directions (4) For the purposes of this section, a direction that it is alleged was given to the trustee, or the trustees, of the fund after 31 March 2013 is taken not to have been given if: (a) the direction was not given in writing; or (b) a copy of the direction is not held by or on behalf of the trustee, or the trustees, of the fund. (5) The regulations may prescribe circumstances in which a direction given to the trustee, or the trustees, of one regulated superannuation fund is to be taken to be a direction given to the trustee, or the trustees, of another regulated superannuation fund for the purposes of this section. Exception—life policies, investment account contracts and cash investment options (6) If an asset (or assets) attributed to the person mentioned in subsection (1) is invested in one or more of the following on 31 March 2013: (a) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested; (b) a life policy under which the benefit to the person (or a relative or dependant of the person) is based only on the realisation of a risk, not the performance of an investment; (c) an investment account contract the only beneficiaries of which are the person, and relatives and dependants of the person; (d) an investment option under which the investment is held as cash; subsection (2) does not apply to the extent that a contribution to the fund for the benefit of the person is invested in the life policy, under the investment account contract or in the cash investment option. 47 After section 29WA Insert: 29WB Contributions by large employer in relation to which no election is made to be paid into large employer MySuper product (1) This section applies if: (a) the trustee, or the trustees, of a regulated superannuation fund are authorised to offer a class of beneficial interest in the fund as a MySuper product on the basis that section 29TB is satisfied in relation to that class of beneficial interest; and (b) a member (other than a defined benefit member) is entitled to hold the MySuper product; and (c) a contribution is made for the benefit of the member; and (d) either: (i) the member has not given the trustee, or the trustees, of the fund a direction that the contribution is to be invested under one or more specified investment options; or (ii) the member has given the trustee, or the trustees, of the fund a direction that some of the contribution is to be invested under one or more specified investment options, but no such direction has been made in relation to the remainder of the contribution. (2) The trustee, or the trustees, of the fund must treat so much of the contribution in relation to which no direction is given as a contribution to be paid into the MySuper product. (3) A trustee commits an offence if the trustee contravenes subsection (2). This is an offence of strict liability. Penalty: 50 penalty units. Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility and Part IA of the Crimes Act 1914 contains provisions dealing with penalties. Note 2: For strict liability, see section 6.1 of the Criminal Code. Directions (4) For the purposes of this section, a direction that it is alleged was given to the trustee, or the trustees, of the fund after 31 March 2013 is taken not to have been given if: (a) the direction was not given in writing; or (b) a copy of the direction is not held by or on behalf of the trustee, or the trustees, of the fund. (5) The regulations may prescribe circumstances in which a direction given to the trustee, or the trustees, of one regulated superannuation fund is to be taken to be a direction given to the trustee, or the trustees, of another regulated superannuation fund for the purposes of this section. Exception—life policies, investment account contracts and cash investment options (6) If an asset (or assets) attributed to the member mentioned in subsection (1) is invested in one or more of the following on 31 March 2013: (a) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested; (b) a life policy under which the benefit to the member (or a relative or dependant of the member) is based only on the realisation of a risk, not the performance of an investment; (c) an investment account contract the only beneficiaries of which are the member, and relatives and dependants of the member; (d) an investment option under which the investment is held as cash; subsection (2) does not apply to the extent that a contribution to the fund for the benefit of the member is invested in the life policy, under the investment account contract or in the cash investment option. 47A Section 29XC Omit "Fair Work Australia", substitute "the Fair Work Commission". 48 Before section 35 Insert: Division 1—Objects 49 Section 35A Repeal the section, substitute: Division 2—Obligations for registrable superannuation entities 35A Accounting records Accounting records must be kept etc. (1) Each trustee of a registrable superannuation entity must ensure that: (a) accounting records that correctly record and explain the transactions and financial position of the RSE licensee for the entity and the entity are kept; and (b) the accounting records of the RSE licensee and the entity are kept in a way that enables: (i) the preparation of reporting documents referred to in section 13 of the Financial Sector (Collection of Data) Act 2001; and (ii) the preparation of any other documents required to be audited under the RSE licensee law; and (c) the accounting records of the RSE licensee and the entity are kept in a way that enables those reporting documents and other documents to be conveniently and properly audited in accordance with the RSE licensee law. (2) If accounting records of an RSE licensee or a registrable superannuation entity are kept in accordance with subsection (1), each trustee of the entity must ensure that: (a) the records are retained for at least 5 years after the end of the year of income to which the transactions relate; and (b) the records are kept either: (i) in Australia; or (ii) in another country if the Regulator gives written approval for the records to be kept in that country, and the conditions (if any) specified in the approval are met; and (c) the records are kept: (i) in writing in the English language; or (ii) in a form in which they are readily accessible and readily convertible into writing in the English language. (3) An approval given under subparagraph (2)(b)(ii) may be given subject to specified conditions. Notification of address where accounting records are kept (4) A trustee of a registrable superannuation entity must notify APRA, in the approved form, of the address where the accounting records of the RSE licensee and the entity are kept: (a) if, immediately before the commencement of this subsection, APRA has not already been notified of the current address where the accounting records of the RSE licensee or the entity are kept—within 28 days after that commencement; or (b) otherwise—within 28 days after the entity is registered under section 29M. (5) If: (a) a trustee of a registrable superannuation entity has notified APRA of the address where the accounting records of the RSE licensee and the entity are kept; and (b) the entity moves the accounting records to a new address; a trustee of the entity must notify APRA, in the approved form and within 28 days after the day on which the accounting records are moved to the new address, of the new address where the accounting records are kept. Offences (6) A trustee commits an offence if the trustee contravenes subsection (1), (2), (4) or (5). Penalty: 100 penalty units. (7) A trustee commits an offence of strict liability if the trustee contravenes subsection (1), (2), (4) or (5). Penalty: 50 penalty units. Note: For strict liability, see section 6.1 of the Criminal Code. 35AB Auditor requests for documents (1) If the auditor of a registrable superannuation entity requests, in writing, a trustee of the entity to give the auditor a document, each trustee of the entity must ensure that the document is given to the auditor within 14 days of the request being made. An auditor may only request documents that are relevant to the preparation of a report about the operations of the entity or the RSE licensee of the entity. (2) A trustee commits an offence if the trustee contravenes subsection (1). Penalty: Imprisonment for 2 years. (3) A trustee commits an offence of strict liability if the trustee contravenes subsection (1). Penalty: 50 penalty units. Note: For strict liability, see section 6.1 of the Criminal Code. 35AC Appointed auditor's functions and duties (1) This section applies if the RSE licensee law: (a) requires an auditor of a registrable superannuation entity to be appointed; or (b) requires or permits a function or duty to be performed, or a power to be exercised, by an auditor. (2) The RSE licensee of the registrable superannuation entity must not appoint a person as an auditor of the entity unless the RSE licensee is reasonably satisfied that the person: (a) meets the eligibility criteria for auditors of registrable superannuation entities set out in the prudential standards; and (b) has not been disqualified from being or acting as an auditor of a registrable superannuation entity under section 130D. (3) A person who is appointed as an auditor must perform the functions and duties set out in the RSE licensee law that are relevant to the person's appointment. (4) The appointed auditor must comply with the RSE licensee law in performing the functions and duties. (5) The trustee of the registrable superannuation entity to whom the RSE licensee law applies must make any arrangements that are necessary to enable the appointed auditor to perform the functions and duties. (6) The RSE licensee of the registrable superannuation entity must end the appointment of a person as an auditor of the entity if the RSE licensee becomes aware that the person: (a) no longer meets the eligibility criteria for auditors of registrable superannuation entities set out in the prudential standards; or (b) has been disqualified from being or acting as an auditor of a registrable superannuation entity under section 130D. 35AD Appointed actuary's functions and duties (1) This section applies if the RSE licensee law: (a) requires an actuary of a registrable superannuation entity to be appointed; or (b) requires or permits a function or duty to be performed, or a power to be exercised, by an actuary. (2) The RSE licensee of a registrable superannuation entity must not appoint a person as an actuary of the entity unless the RSE licensee is reasonably satisfied that the person: (a) meets the eligibility criteria for actuaries of registrable superannuation entities set out in the prudential standards; and (b) has not been disqualified from being or acting as an actuary of a registrable superannuation entity under section 130D. (3) A person who is appointed as an actuary must perform the functions and duties set out in the RSE licensee law that are relevant to the person's appointment. (4) The appointed actuary must comply with the RSE licensee law in performing the functions and duties. (5) The trustee of the registrable superannuation entity to whom the RSE licensee law applies must make any arrangements that are necessary to enable the appointed actuary to perform the functions and duties. (6) The RSE licensee of a registrable superannuation entity must end the appointment of a person as an actuary of the entity if the RSE licensee becomes aware that the person: (a) no longer meets the eligibility criteria for actuaries of registrable superannuation entities set out in the prudential standards; or (b) has been disqualified from being or acting as an actuary of a registrable superannuation entity under section 130D. Division 3—Obligations for self managed superannuation funds 35AE Accounting records Accounting records must be kept etc. (1) Each trustee of a superannuation entity that is a self managed superannuation fund must ensure that: (a) accounting records that correctly record and explain the transactions and financial position of the entity are kept; and (b) the accounting records of the entity are kept in a way that enables the following to be prepared: (i) the accounts and statements of the entity referred to in section 35B; (ii) the returns of the entity referred to in section 35D; and (c) the accounting records of the entity are kept in a way that enables those accounts, statements and returns to be conveniently and properly audited in accordance with this Act. (2) If accounting records of a superannuation entity that is a self managed superannuation fund are kept in accordance with subsection (1), each trustee of the superannuation entity must ensure that: (a) the records are retained for at least 5 years after the end of the year of income to which the transactions relate; and (b) the records are kept in Australia; and (c) the records are kept: (i) in writing in the English language; or (ii) in a form in which they are readily accessible and readily convertible into writing in the English language. Offences (3) A trustee commits an offence if the trustee contravenes subsection (1) or (2). Penalty: 100 penalty units. (4) A trustee commits an offence of strict liability if the trustee contravenes subsection (1) or (2). Penalty: 50 penalty units. Note: For strict liability, see section 6.1 of the Criminal Code. 50 Section 35B (heading) Repeal the heading, substitute: 35B Accounts and statements 51 Section 35C (heading) Repeal the heading, substitute: 35C Audit of accounts and statements 52 Subsection 35C(1) After "superannuation entity", insert "that is a self managed superannuation fund". 53 Subsection 35C(1) Omit "approved auditor", substitute "approved SMSF auditor". 54 Subsection 35C(1) Omit ", and the RSE licensee (if any) of the entity,". 55 Subsection 35C(1)(note) Repeal the note. 56 Subsection 35C(1A) Repeal the subsection. 57 Subsection 35C(2) After "superannuation entity", insert "that is a self managed superannuation fund". 58 Subsection 35C(5) Repeal the subsection, substitute: (5) Without limiting subsection (1), an approved form: (a) must either: (i) relate solely to the audit of the accounts and statements referred to in subsection 35B(1) and prepared in respect of a year of income; or (ii) relate only to the audit of those accounts and statements and of any other accounts and statements, prepared in respect of a year of income, that are identified in the form; and (b) must include a statement by the auditor as to the extent of the auditor's compliance with the auditor independence requirements referred to in paragraph 128F(d); and (c) must include a statement by the auditor as to whether, in the auditor's opinion, each trustee of the entity has, during the year of income, complied with the provisions of this Act and the regulations that are identified in the form. 59 Subsection 35C(7) Repeal the subsection. 60 Section 35D (heading) Repeal the heading, substitute: 35D Trustee to lodge annual returns 61 Section 36 Repeal the section. 62 Before subsection 55(1) Insert: Covenants must be complied with 63 Before subsection 55(2) Insert: Breach of covenant not an offence and does not result in invalidity 64 Before subsection 55(3) Insert: Breach of covenant may result in action to recover loss or damage 65 Subsection 55(3) Omit "A person", substitute "Subject to subsection (4A), a person". 66 Subsection 55(4) Repeal the subsection, substitute: (4) Unless an action under subsection (3) is of a kind dealt with in subsections (4A) to (4D), it may be begun at any time within 6 years after the day on which the cause of action arose. Leave of court required where directors' covenants contravened (4A) If: (a) the person who is alleged to have contravened subsection (1) is or was a director of a corporate trustee of a registrable superannuation entity; and (b) it is alleged that the contravention is of a covenant that is contained, or taken to be contained, in the governing rules of the entity, and is: (i) a covenant of the kind mentioned in subsection 52A(2); or (ii) a covenant prescribed under section 54A that relates to the conduct of the director of a corporate trustee of a registrable superannuation entity; an action under subsection (3) may be brought only with the leave of the court. (4B) A person may, within 6 years after the day on which the cause of action arose, seek the leave of the court to bring such an action. (4C) In deciding whether to grant an application for leave to bring such an action, the court must take into account whether: (a) the applicant is acting in good faith; and (b) there is a serious question to be tried. (4D) The court may, in granting leave to bring such an action, specify a period within which the action may be brought. 67 Before subsection 55(5) Insert: Defences in actions to recover loss or damage 68 Subsection 55(5) Omit "in relation to the investment", substitute "in relation to each act, or failure to act, that resulted in the loss or damage". 69 Subsection 55(6) Omit "in relation to the management of the reserve", substitute "in relation to each act, or failure to act, that resulted in the loss or damage". 70 At the end of subsections 56(2) and 57(2) Add: ; or (c) the payment of any amount payable under an infringement notice. 71 After paragraphs 56(2)(b) and 57(2)(b) Insert: (c) the payment of any amount payable under an infringement notice; or 72 After section 58 Insert: 58A Service providers and investments cannot be limited to particular persons or associates Does not apply to self managed superannuation funds (1) This section does not apply to a regulated superannuation fund that is a self managed superannuation fund. Service providers (2) A provision in the governing rules of a regulated superannuation fund is void to the extent that it specifies a person or persons (whether by name or in any other way, directly or indirectly) from whom the trustee, or one or more of the trustees, of the fund may or must acquire a service. Investments in entities (3) A provision in the governing rules of a regulated superannuation fund is void to the extent that it specifies an entity or entities (whether by name or in any other way, directly or indirectly) in or through which one or more of the assets of the fund may or must be invested. Financial products (4) A provision in the governing rules of a regulated superannuation fund is void to the extent that it specifies (whether by name or by reference to an entity) a financial product or financial products: (a) in or through which one or more of the assets of the fund may or must be invested; or (b) that may or must be purchased using assets of the fund; or (c) in relation to which one or more assets of the fund may or must be used to make payments. Exception (5) Subsections (2), (3) and (4) do not apply if the relevant person, entity or financial product is specified in a law of the Commonwealth or of a State or Territory, or is required to be specified under such a law. 58B Service providers and investments (1) This section applies if a trustee, or the trustees, of a regulated superannuation fund does one or more of the following: (a) acquires a service from an entity; (b) invests assets of the fund in or through an entity; (c) invests assets of the fund in or through a financial product; (d) purchases a financial product using assets of the fund; (e) uses assets of the fund to make payments in relation to a financial product. (2) If the trustee, or the trustees, would not breach: (a) a provision of any of the following: (i) this or any other Act; (ii) a legislative instrument made under this or any other Act; (iii) the prudential standards; (iv) the operating standards; (v) the governing rules of the fund; or (b) any covenant referred to in this Part or prescribed under this Part; in doing one or more of the things mentioned in subsection (1), the general law relating to conflict of interest does not apply to the extent that it would prohibit the trustee, or the trustees, from doing the thing. 73 At the end of Part 7 Add: 68C Voting by a director of a corporate trustee—governing rules (1) This section applies to a regulated superannuation fund, other than a self managed superannuation fund, of which the trustee is a body corporate. (2) A provision in the governing rules of the fund is void to the extent that it purports to preclude a director of the trustee from voting on a matter relating to the fund. Exception (3) Subsection (2) does not apply to a provision in the governing rules of the fund to the extent that the provision: (a) precludes a director of the trustee of the fund from voting on a matter in which the director has a material personal interest; or (b) otherwise relates to voting by a director of the trustee of the fund on a matter in which the director has a material personal interest; or (c) precludes a director of the trustee of the fund from voting where there is a conflict of a kind described in paragraph 52(2)(d) or 52A(2)(d); or (d) otherwise relates to voting by a director of the trustee of the fund where there is a conflict of a kind described in paragraph 52(2)(d) or 52A(2)(d); or (e) precludes a director of the trustee of the fund from exercising a casting vote; or (f) ensures compliance by the trustee of the fund, or a director of the trustee of the fund, with a prudential standard that deals with conflicts of interest or duty. 68D Voting by an individual trustee—governing rules (1) This section applies to a regulated superannuation fund, other than a self managed superannuation fund, of which the trustee, or each of the trustees, is an individual. (2) A provision in the governing rules in the fund is void to the extent that it purports to preclude a trustee of the fund from voting on a matter relating to the fund. Exception (3) Subsection (2) does not apply to a provision in the governing rules of the fund to the extent that the provision: (a) precludes a trustee of the fund from voting on a matter in which the trustee has a material personal interest; or (b) otherwise relates to voting by a trustee of the fund on a matter in which the trustee has a material personal interest; or (c) precludes a trustee of the fund from voting where there is a conflict of a kind described in paragraph 52(2)(d); or (d) otherwise relates to voting by a trustee of the fund where there is a conflict of a kind described in paragraph 52(2)(d); or (e) precludes a trustee of the fund from exercising a casting vote; or (f) ensures compliance by a trustee of the fund with a prudential standard that deals with conflicts of interest or duty. 74 At the end of subsection 101(1) Add: ; and (c) if a person referred to in subsection (1A) makes a complaint that relates to the payment of a death benefit: (i) the person is given written reasons for a decision made by the trustee in relation to the complaint when the person is given notice of the decision; or (ii) if no decision is made in relation to the complaint within 90 days after the complaint is made—the person may, by giving notice in writing to a trustee of the fund, request written reasons for the failure to make a decision in relation to the complaint within that period; and (d) if a person referred to in subsection (1A) makes a complaint of another kind specified in that subsection in relation to the person, the person may, by giving notice in writing to a trustee of the fund, request written reasons for: (i) a decision made by the trustee in relation to the complaint; or (ii) if no decision is made in relation to the complaint within 90 days after the complaint is made—the failure to make a decision in relation to the complaint within that period; and (e) if a notice requesting written reasons is given in the circumstances set out in subparagraph (c)(ii) or paragraph (d), the written reasons are given to the person within 28 days after the notice is given, or such longer period as the Regulator, in writing, permits. 75 After sub‑subparagraph 107(2)(a)(ii)(D) Insert: (DA) the member representative no longer meeting one or more of the criteria for fitness and propriety relevant to the member representative set out in the prudential standards; or 76 After subparagraph 108(2)(a)(ii) Insert: (iia) the additional independent trustee or additional independent director no longer meeting one or more of the criteria for fitness and propriety relevant to the independent trustee or independent director set out in the prudential standards; or 77 After subsection 126H(6) Insert: (6A) In deciding whether it is satisfied as mentioned in subsection (5), the Court may also take into account any criteria for fitness and propriety that are relevant to the trustee or responsible officer set out in the prudential standards. 78 Subparagraph 129(1)(a)(i) Omit "or the regulations", substitute ", the regulations or the prudential standards". 79 Paragraph 129(1)(b) Omit "or the regulations", substitute ", the regulations, the prudential standards". 80 Paragraph 130(1)(b) Omit "or the regulations", substitute ", the regulations, the prudential standards".