Commonwealth: Superannuation Safety Amendment Act 2004 (Cth)

Superannuation Safety Amendment Act 2004 No. 53, 2004 An Act to amend the law relating to superannuation, and for related purposes Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Licensing, registration and amalgamation Part 1—Amendments commencing first Superannuation Industry (Supervision) Act 1993 Part 2—Amendments commencing second Superannuation Industry (Supervision) Act 1993 Schedule 2—Clarification of the application of the law to groups of trustees Superannuation Industry (Supervision) Act 1993 Schedule 3—Actuaries, auditors and defined benefit funds Part 1—Actuaries and auditors Retirement Savings Accounts Act 1997 Superannuation Industry (Supervision) Act 1993 Part 2—Defined benefit funds Superannuation Industry (Supervision) Act 1993 Superannuation Safety Amendment Act 2004 No. 53, 2004 An Act to amend the law relating to superannuation, and for related purposes [Assented to 27 April 2004] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Superannuation Safety Amendment Act 2004. 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 on which this Act receives the Royal Assent. 27 April 2004 2. Schedule 1, Part 1 A single day to be fixed by Proclamation. 1 July 2004 (Gazette 2004, No. GN22) However, if the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period. 3. Schedule 1, Part 2 On the day after the end of the period of 2 years beginning on the day on which the provision(s) covered by table item 2 commence. 1 July 2006 4. Schedule 2 At the same time as the provision(s) covered by table item 2. 1 July 2004 5. Schedule 3 At the same time as the provision(s) covered by table item 2. 1 July 2004 Note: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or 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—Licensing, registration and amalgamation Part 1—Amendments commencing first Superannuation Industry (Supervision) Act 1993 1 Section 4 (after table item 2) Insert: 2A licensing of trustees and groups of individual trustees 2B registrable superannuation entities 2 Section 4 (after table item 17) Insert: 18 amalgamation of funds 3 Section 5 Repeal the section. 4 Subparagraph 6(1)(a)(i) Repeal the subparagraph, substitute: (i) Parts 2 to 2B; 5 Subsection 10(1) (paragraph (b) of the definition of approved deposit fund) Repeal the paragraph, substitute: (b) is maintained by: (i) an approved trustee; or (ii) an RSE licensee that is a constitutional corporation; and (c) is maintained solely for approved purposes. 6 Subsection 10(1) (definition of approved guarantee) Repeal the definition, substitute: approved guarantee has the meaning given by section 11E. 7 Subsection 10(1) Insert: class, in relation to an RSE licensee, means (except in subsections 29E(7) and (8)) a class of RSE licence provided for under subsection 29B(2) or (3), or under regulations made for the purposes of subsection 29B(4). 8 Subsection 10(1) Insert: financial services licensee has the meaning given by Chapter 7 of the Corporations Act 2001. 9 Subsection 10(1) Insert: group of individual trustees means a group of trustees each of whom is an individual trustee. 10 Subsection 10(1) Insert: licensing transition period means the period: (a) starting on the commencement of Part 1 of Schedule 1 to the Superannuation Safety Amendment Act 2004; and (b) ending immediately before the commencement of Part 2 of that Schedule. 11 Subsection 10(1) Insert: public offer entity licence means an RSE licence of a class provided for under subsection 29B(2). 12 Subsection 10(1) Insert: registrable superannuation entity means: (a) a regulated superannuation fund; or (b) an approved deposit fund; or (c) a pooled superannuation trust; but does not include a self managed superannuation fund. 13 Subsection 10(1) (after paragraph (dc) of the definition of reviewable decision) Insert: (dd) a decision of APRA under subsection 29CA(2) to treat an application for an RSE licence as having been withdrawn; or (de) a decision of APRA under subsection 29D(2) refusing an application for an RSE licence; or (df) a decision of APRA under subsection 29EA(1) to impose additional conditions on an RSE licence; or (dg) a decision of APRA under subsection 29FA(2) to treat an application for variation of an RSE licence so that it is an RSE licence of a different class as having been withdrawn; or (dh) a decision of APRA under subsection 29FA(2) to treat an application for variation or revocation of a condition imposed on an RSE licence as having been withdrawn; or (di) a decision of APRA to refuse to vary an RSE licence under subsection 29FC(1) so that it is an RSE licence of a different class; or (dj) a decision of APRA to refuse to vary or revoke under subsection 29FC(1) any conditions imposed on an RSE licence; or (dk) a decision of APRA under subsection 29FD(1) to vary or revoke any conditions imposed on an RSE licence; or (dl) a decision of APRA under subsection 29G(1) to cancel an RSE licence; or (dm) a decision of APRA under subsection 29M(2) refusing an application for registration of a registrable superannuation entity; or (dn) a decision of APRA under subsection 29N(2) to cancel the registration of a registrable superannuation entity; or 14 Subsection 10(1) Insert: RSE licence means a licence granted under section 29D. 15 Subsection 10(1) Insert: RSE licensee means a constitutional corporation, body corporate, or group of individual trustees, that holds an RSE licence granted under section 29D. 16 Subsection 10(1) Insert: RSE licensee law means: (a) this Act or the regulations; and (b) the Financial Sector (Collection of Data) Act 2001; and (c) the Financial Institutions Supervisory Levies Collection Act 1998; and (d) the provisions of the Corporations Act 2001 listed in a subparagraph of paragraph (b) of the definition of regulatory provision in section 38A of this Act or specified in regulations made for the purposes of subparagraph (b)(xvi) of that definition, as applying in relation to superannuation interests; and (e) any other provisions of any other law of the Commonwealth specified in regulations made for the purposes of this paragraph. 17 After section 11D Insert: 11E Approved guarantees (1) In this Act, an approved guarantee is: (a) a guarantee given by an ADI; or (b) a guarantee given by or on behalf of the Commonwealth, a State or a Territory; that meets the requirements that APRA determines in writing. (2) A determination under subsection (1) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. 18 Paragraph 13(b) Omit "trustee; and", substitute "trustee.". 19 Paragraph 13(c) Repeal the paragraph. Note: The heading to section 13 is altered by omitting "and groups of trustees". 20 After section 13 Insert: 13A RSE licensees that are groups of individual trustees (1) Subject to this section, for the purposes of this Act and the regulations, a change in the composition of a group of individual trustees that is an RSE licensee does not affect the continuity of the group of individual trustees for the duration of the period during which the RSE licence continues in force. Note: So, for example, an RSE licence granted to a group of individual trustees will not cease to continue in force, merely because of a change in the membership of the group. (2) An obligation that would be imposed on an RSE licensee that is a group of individual trustees of a registrable superannuation entity by a provision of this Act or the regulations is imposed instead on each of the trustees but, subject to the entity's governing rules, may be discharged by any of them. (3) A person who is a member of a group of individual trustees that is an RSE licensee is not liable under any offence of strict liability or civil penalty provision of this Act or the regulations in respect of any breach of a provision of this Act or the regulations, or failure, by the RSE licensee if the person proves that he or she: (a) made all inquiries (if any) that were reasonable in the circumstances; and (b) after doing so, believed on reasonable grounds that the obligations of the RSE licensee were being complied with. Note: In a prosecution for an offence of strict liability against a provision of this Act or the regulations, a defendant bears a legal burden in relation to the matters in subsection (3) (see section 13.4 of the Criminal Code). (4) If a group of individual trustees is an RSE licensee, a direction, notice or other document is taken, for the purposes of a provision of this Act or the regulations, to be given to the RSE licensee if it is given it to any member of the group. (5) If a group of individual trustees of a registrable superannuation entity is an RSE licensee, a request is taken, for the purposes of a provision of this Act or the regulations, to have been made to the RSE licensee if it is made to any member of the group and, subject to the entity's governing rules, may be dealt with by any member of the group. (6) Any requirement under this Act or the regulations that a document be signed by an RSE licensee is taken, if the RSE licensee is a group of individual trustees, to be a requirement that the document be signed by each of the members of the group. (7) An RSE licensee that is a group of individual trustees is taken, for the purposes of a provision of this Act or the regulations, to have provided something to a person if one of the members of the group has provided that thing to the person. (8) For the purposes of this Act and the regulations, if an RSE licensee that is a group of individual trustees is affected by a reviewable decision, each member of the group is taken to be affected by that decision. (9) The regulations may exclude or modify the effect of the subsections of this section (other than subsections (2) and (3)) in relation to specified provisions. (10) This section has effect subject to a contrary intention in a provision of this Act or regulations made for the purposes of subsection (9). 21 Paragraph 17A(4)(a) After "of the fund", insert "or an RSE licensee of the fund". 22 Subsection 17A(5) After "does not", insert ", except for the purposes of section 29J,". 23 Subsection 21(2) Repeal the subsection, substitute: (2) This Part operates concurrently with Part 2A (which is about licensing of trustees and groups of individual trustees). The significance of the approval or licensing of trustees, or groups of individual trustees, is as follows: (a) a fund cannot be an approved deposit fund unless it is maintained by an approved trustee or an RSE licensee that is a constitutional corporation (the other requirements of the definition of approved deposit fund in section 10 must also be satisfied); (b) the trustee of a public offer entity must not engage in conduct to which section 152 applies unless the trustee is an approved trustee or an RSE licensee that is a constitutional corporation (other requirements also apply before that conduct may be engaged in); (c) a person must not be, or act as, the trustee of a superannuation fund with fewer than 5 members (other than a self managed superannuation fund) if the person is required by subsection 121A(1) to be, but is not, an approved trustee or an RSE licensee that is a constitutional corporation; (d) APRA may suspend or remove a trustee of a superannuation fund with fewer than 5 members (other than a self managed superannuation fund) if the trustee is required by subsection 121A(1) to be, but is not, an approved trustee or an RSE licensee that is a constitutional corporation; (e) a person may contravene subsection 29J(1) if the person is not an approved trustee or does not hold an RSE licence. Note: See Part 2A for information about RSE licences. 24 After subsection 23(1) Insert: (1A) However, an application must not be made during the licensing transition period. 25 At the end of subsection 26(1) Add: ; and (c) the applicant's application was made before the start of the licensing transition period. 26 At the end of section 26 Add: (7) In this section: net tangible assets has the meaning given by the regulations. 27 Paragraph 27(b) Repeal the paragraph, substitute: (b) remains in force, subject to any variation under section 27B or 27C, until: (i) it is revoked under section 28; or (ii) the trustee is granted an RSE licence under section 29D. Note: The heading to section 27C is altered by omitting "his or her" and substituting "its". 28 Paragraph 27E(b) Repeal the paragraph, substitute: (b) the variation remains in force until: (i) the revocation of the approval to which it relates; or (ii) the coming into force of a later variation of that approval; or (iii) the trustee is granted an RSE licence under section 29D. 29 After Part 2 Insert: Part 2A—Licensing of trustees and groups of individual trustees Division 1—Object of this Part 29A Object of this Part and the relationship of this Part to other provisions (1) The object of this Part is to set out provisions relating to the granting of RSE licences to: (a) constitutional corporations; and (b) other bodies corporate; and (c) groups of individual trustees. (2) The following is a simplified outline showing some key relationships between this Part and other provisions of the Act and the regulations that trustees should be aware of: Certain provisions may be contravened if unlicensed trustees carry out particular activities (e.g.: sections 29J and 152). The trustee, or group of individual trustees, of a fund or trust may obtain an RSE licence under this Part. Note 1: If the trustee is a constitutional corporation, the trustee obtaining an RSE licence may result in a fund or trust becoming an approved deposit fund or pooled superannuation trust, which are each registrable superannuation entities. Note 2: If the trustee or group of individual trustees makes an election under section 19, the fund may become a regulated superannuation fund. Regulated superannuation funds other than self managed superannuation funds are registrable superannuation entities. Note 3: In order to obtain an RSE licence, the trustee, or group of individual trustees, must have a risk management strategy. A trustee, or group of individual trustees, that has obtained an RSE licence may have a registrable superannuation entity registered under Part 2B. Certain provisions may be contravened if certain activities are carried out while a registrable superannuation entity is not registered (e.g.: accepting contributions while the entity is unregistered may lead to an offence under section 34.) Note 1: A failure to register the fund or trust may also lead to a breach of an RSE licence condition and possible loss of the RSE licence. Note 2: In order to obtain registration of a fund or trust, the trustee, or group of individual trustees, must have a risk management plan for that fund or trust. Division 2—Classes of RSE licences 29B Classes of RSE licences (1) There are to be classes of RSE licences. (2) One class of RSE licences is to be a class that enables a trustee that holds a licence of that class to be a trustee of: (a) any public offer entity; and (b) any other registrable superannuation entity included in a class of registrable superannuation entities specified in regulations made for the purposes of this subsection; subject to any condition imposed on that licence under subsection 29EA(3). Note 1: An RSE licence of this class is called a public offer entity licence: see subsection 10(1). Note 2: Only constitutional corporations may hold public offer entity licences: see paragraph 29D(1)(g). (3) Another class of RSE licences is to be a class that enables a trustee that: (a) holds a licence of that class; or (b) is a member of a group of individual trustees that holds a licence of that class; to be a trustee of any registrable superannuation entity included in a class of registrable superannuation entities (other than a class of public offer entities) specified in regulations made for the purposes of this subsection, subject to any condition imposed on that licence under subsection 29EA(3). (4) The regulations may provide for other classes of RSE licences. For each such class, the regulations must specify the classes of registrable superannuation entities of which a trustee that: (a) holds a licence of that class; or (b) is a member of a group of individual trustees that holds a licence of that class; is enabled to be a trustee, subject to any condition imposed on that licence under subsection 29EA(3). (5) The classes of registrable superannuation entity that the regulations may specify in relation to a particular class of RSE licence may include one or more classes of registrable superannuation entity that the regulations specify in relation to another class of RSE licence. Division 3—Applying for RSE licences 29C Applications for RSE licences Who may apply for RSE licences (1) A constitutional corporation may apply to APRA for an RSE licence of any class. (2) A body corporate that is not a constitutional corporation may apply to APRA for an RSE licence of any class other than a class that would enable it to be a trustee of a public offer entity. (3) A group of individual trustees may apply to APRA for an RSE licence of any class other than a class that would enable each of the members of the group to be a trustee of a public offer entity. Requirements for applications (4) An application for an RSE licence must: (a) be in the approved form; and (b) contain the information required by the approved form; and (c) be accompanied by the application fee (if any) prescribed by regulations made for the purposes of this paragraph; and (d) be accompanied by an up‑to‑date copy of: (i) if the applicant is a body corporate—the body corporate's risk management strategy, signed by the body corporate; or (ii) if the applicant is a group of individual trustees—the group's risk management strategy, signed by each member of the group; and (e) be accompanied by a statement, signed by: (i) if the applicant is a body corporate—the body corporate; or (ii) if the applicant is a group of individual trustees—each member of the group; that the risk management strategy complies with section 29H. (5) Regulations made for the purposes of paragraph (4)(c) may prescribe different application fees for applications for different classes of RSE licences. Notifying certain changes while applications are pending (6) If: (a) a body corporate applies for an RSE licence; and (b) after the application is made, but before APRA decides the application, another director is added to, or removed from the board; the body corporate must notify APRA, in the approved form, about the change to the membership of the board as soon as practicable after that change occurs. Note: Part 9 has requirements about equal representation rules. (7) If: (a) a group of individual trustees applies for an RSE licence; and (b) after the application is made, but before APRA decides the application, another trustee is added to, or removed from the group; a member of the group must notify APRA, in the approved form, about the change to the membership of the group as soon as practicable after that change occurs. Note: Part 9 has requirements about equal representation rules. (8) If: (a) a body corporate or group of individual trustees applies for an RSE licence; and (b) after the application is made but before APRA decides the application, the risk management strategy for the body or group is varied or revoked and replaced; the body or group must lodge an up‑to‑date copy of the risk management strategy with APRA as soon as practicable after the risk management strategy is varied or revoked and replaced. (9) An application is taken not to comply with this section if subsection (6), (7) or (8) is contravened. Note: APRA cannot grant an RSE licence while the application does not comply with this section: see paragraph 29D(1)(c). 29CA APRA may request further information (1) If a body corporate or group of individual trustees has applied for an RSE licence, APRA may give the body corporate or a member of the group a notice requesting the body or group to give APRA, in writing, specified information relating to the application by a specified time that is reasonable in the circumstances. (2) APRA may decide to treat an application by a body corporate or group of individual trustees for an RSE licence as having been withdrawn if the body or group: (a) does not comply with a request to provide information under this section; and (b) does not have a reasonable excuse for not complying. (3) If APRA decides under subsection (2) to treat an application for an RSE licence as having been withdrawn, APRA must take all reasonable steps to ensure that the body that made the application, or a member of the group that made the application, is given a notice informing the body or group of: (a) APRA's decision; and (b) the reasons for that decision; as soon as practicable after making the decision. 29CB Period etc. for deciding applications from existing trustees in licensing transition period Statements of intention to apply (1) A person who was a trustee of a registrable superannuation entity at the start of the licensing transition period may give APRA a written statement that: (a) is in the approved form; and (b) indicates whether the person intends to apply under section 29C for an RSE licence; and (c) lists the registrable superannuation entities that the person intends to apply to have registered under Part 2B if the RSE licence is granted. Period for deciding applications (2) Subject to subsection (3), APRA must decide an application for an RSE licence before the end of the licensing transition period if: (a) the application is received by APRA during that period; and (b) the application is for an RSE licence to be granted to: (i) a body corporate that was a trustee of a registrable superannuation entity at the start of the licensing transition period; or (ii) a group of individual trustees that has a member who was a trustee of a registrable superannuation entity at the start of the licensing transition period. (3) At any time in the last 6 months of the licensing transition period, APRA may refuse to consider under subsection (2) any further applications for RSE licences that are received by APRA in the last 6 months before the end of the licensing transition period for RSE licences to be granted to: (a) bodies corporate that were trustees of registrable superannuation entities at the start of the licensing transition period; or (b) groups of individual trustees with one or more members who were each a trustee of a registrable superannuation entity at the start of the licensing transition period. (4) If APRA decides to refuse, under subsection (3), to consider under subsection (2) any further applications, APRA must, as soon as practicable after making the decision, publish a notice stating APRA's decision in a daily newspaper that circulates generally in each State and Territory. (5) If APRA decides to refuse, under subsection (3), to consider under subsection (2) an application, that application is taken, at the end of the licensing transition period, to have been received by APRA immediately after the end of the licensing transition period. 29CC Period for deciding other applications (1) APRA must decide an application for an RSE licence within 90 days after receiving it if: (a) the application is received by APRA after the end of the licensing transition period; or (b) the application is received by APRA during the licensing transition period and is for an RSE license to be granted to: (i) a body corporate that was not a trustee of a registrable superannuation entity at the start of the licensing transition period; or (ii) a group of individual trustees that has no members that were a trustee of a registrable superannuation entity at the start of the licensing transition period; unless APRA extends the period for deciding the application under subsection (2). (2) APRA may extend the period for deciding an application covered by paragraph (1)(a) or (b) by up to 30 days if APRA informs the body corporate, or a member of the group, that made the application of the extension: (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 the application 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. Division 4—Grant of RSE licences 29D Grant of RSE licences (1) APRA must grant an RSE licence to a body corporate, or group of individual trustees, that has applied for an RSE licence if, and only if: (a) APRA has no reason to believe that: (i) if the application is made by a body corporate—the body corporate; or (ii) if the application is made by a group of individual trustees—the group as a whole or any member of the group; would fail to comply with the RSE licensee law if the RSE licence were granted; and (b) APRA has no reason to believe that: (i) if the application is made by a body corporate—the body corporate; or (ii) if the application is made by a group of individual trustees—the group as a whole or any member of the group; would fail to comply with any condition imposed on the RSE licence if it were granted; and (c) the application for the licence complies with section 29C and is for a class of licence that the body corporate or group of individual trustees may apply for under that section; and (d) APRA is satisfied that: (i) if the application is made by a body corporate—the body corporate meets the requirements of standards prescribed under Part 3 relating to fitness and propriety for trustees of funds and RSE licensees; or (ii) if the application is made by a group of individual trustees—the group as a whole meets the requirements of standards prescribed under Part 3 relating to fitness and propriety for RSE licensees and each of the members of the group meets the requirements of standards prescribed under Part 3 relating to fitness and propriety for trustees of funds; and (e) APRA is satisfied that the risk management strategy for the body corporate or group meets the requirements of section 29H; and (f) in a case where the applicant is not a constitutional corporation—APRA is satisfied that: (i) if the application is made by a body corporate—the body corporate; or (ii) if the application is made by a group of individual trustees—each member of the group; only intends to act as a trustee of one or more superannuation funds that have governing rules providing that the sole or primary purpose of the fund is the provision of old‑age pensions; and (g) in a case where the application is for a licence of a class that enables a trustee that holds a licence of that class to be a trustee of a public offer entity subject to any condition imposed under subsection 29EA(3)—APRA is satisfied that the applicant is a constitutional corporation that meets the capital requirements under section 29DA; and (h) the application has not been withdrawn, treated as withdrawn under subsection 29CA(2), refused consideration under subsection 29CB(3) or taken to have been refused under subsection 29CC(4). Note 1: Conditions apply to all RSE licences. See Division 5. Note 2: An RSE licence may only be granted to a body corporate or a group of individual trustees because only bodies corporate and groups of individual trustees may apply for RSE licences. See section 29C. (2) Otherwise APRA must refuse the application. 29DA Capital requirements (1) The capital requirements under this section are met by a constitutional corporation if it satisfies at least one of the following subsections. (2) A constitutional corporation satisfies this subsection if APRA is satisfied that the value of the corporation's net tangible assets is equal to, or greater than, the amount prescribed by regulations made for the purposes of this subsection. (3) A constitutional corporation satisfies this subsection if APRA is satisfied that the corporation is entitled to the benefit of an approved guarantee that: (a) is of an amount equal to, or greater than, the amount prescribed by regulations made for the purposes of this paragraph; and (b) is in respect of the corporation's duties as trustee of each registrable superannuation entity of which it is, or is proposing to become, the trustee. (4) A constitutional corporation satisfies this subsection if APRA is satisfied that: (a) the corporation is entitled to the benefit of an approved guarantee that is in respect of its duties as trustee of each registrable superannuation entity of which it is, or is proposing to become, the trustee; and (b) the sum of the amount of the approved guarantee and the value of the corporation's net tangible assets is equal to, or greater than, the amount prescribed by regulations made for the purposes of this paragraph. (5) A constitutional corporation satisfies this subsection if it has agreed, in writing, to comply with written requirements that: (a) were given to it by APRA before: (i) it was granted an RSE licence; or (ii) its class of RSE licence was varied, resulting in the RSE licensee being required to meet the capital requirements under this section; and (b) relate to the custody of the assets of each of the registrable superannuation entities of which it is, or is proposing to become, the trustee. (6) In this section: net tangible assets has the meaning given by the regulations. 29DB Licence numbers etc. If APRA decides to grant an RSE licence to a body corporate or group of individual trustees, APRA must give the body or group an RSE licence that specifies: (a) a unique licence number; and (b) the class of licence. 29DC Documents required to bear licence numbers (1) An RSE licensee must ensure that the number of its RSE licence is included in: (a) each document that it gives to APRA in the capacity of an RSE licensee; and (b) any other document in which it identifies itself as an RSE licensee of a registrable superannuation entity; and (c) if the RSE licensee is a body corporate—any document in which the body corporate identifies itself as a trustee of a registrable superannuation entity; or (d) if the RSE licensee is a group of individual trustees—any document in which a member of the group identifies itself as a trustee of a registrable superannuation entity or as a member of a group of individual trustees that are the RSE licensee of a registrable superannuation entity. (2) However, an RSE licensee is not required to comply with subsection (1) in respect of a particular document if it has been given written approval by APRA not to be required to ensure that the number is included in that document or in a class of documents that includes that document. 29DD Licence period (1) An RSE licence comes into force at the later of: (a) the time when it is granted; or (b) the time specified on the licence as the time when it comes into force. (2) An RSE licence continues in force, subject to: (a) any imposition of licence conditions under Division 5; or (b) any variation or revocation of the licence conditions, or variation of the licence class, under Division 6; until the RSE licence is cancelled under Division 7. 29DE APRA to give notice of refusal of applications If APRA refuses an application by a body corporate or a group of individual trustees for an RSE licence, APRA must take all reasonable steps to ensure that the body or a member of the group is given a notice informing the body or group of: (a) APRA's refusal of the application; and (b) the reasons for that refusal; as soon as practicable after refusing the application. Division 5—Conditions on RSE licences 29E Conditions imposed on all licences and on groups of licences Conditions imposed on all RSE licences (1) The following conditions are imposed on all RSE licences: (a) the RSE licensee and, if the RSE licensee is a group of individual trustees, each of the members of the group, must comply with the RSE licensee law; (b) the duties of a trustee in respect of each registrable superannuation entity of which it is an RSE licensee must be properly performed by: (i) if the RSE licensee is a body corporate—the body corporate; or (ii) if the RSE licensee is a group of individual trustees—each of the members of the group; (c) the RSE licensee must have a risk management strategy that complies with Division 8, and must comply with that strategy; (d) the RSE licensee must ensure that each registrable superannuation entity of which it is the RSE licensee is: (i) registered under Part 2B; or (ii) the subject of an application for registration under Part 2B that has not been finally determined or otherwise disposed of; (e) the RSE licensee must comply with each measure and procedure set out in the risk management plan for each registrable superannuation entity of which it is the RSE licensee; (f) the RSE licensee must notify APRA of any change in the composition of the RSE licensee (see subsection (2)) within 14 days after the change takes place; (g) the RSE licensee must comply with any other conditions prescribed by regulations made for the purposes of this paragraph. Note 1: Breach of a licence condition may lead to consequences such as a direction from APRA to comply with the condition (see section 29EB) or cancellation of the licence (see section 29G). Note 2: An RSE licensee must notify APRA if the RSE licensee breaches a licence condition: see section 29JA. Note 3: Additional conditions may be imposed on various types of RSE licences (see subsections (3) to (7)) or a particular RSE licence (see section 29EA). Change in the composition of the RSE licensee (2) For the purposes of paragraph (1)(f), a change in the composition of the RSE licensee is: (a) if the RSE licensee is a body corporate—a person becoming, or ceasing to be, a director of the body corporate; or (b) if the RSE licensee is a group of individual trustees—an individual becoming, or ceasing to be, a member of the group. Classes enabling RSE licensees to be trustees of public offer entities (3) The following additional conditions are imposed on each RSE licence that enables a trustee that holds a licence of that class to be a trustee of a public offer entity: (a) the RSE licensee that holds the licence must continue to be a constitutional corporation that meets the capital requirements under section 29DA; and (b) if the RSE licensee that holds the licence met the capital requirements by satisfying subsection 29DA(5) (and not subsection 29DA(2), (3) or (4)) when APRA granted the licence—the RSE licensee must continue to comply with the written requirements mentioned in that subsection. Licences held by RSE licensees that are not constitutional corporations (4) The following additional condition is imposed on each RSE licence that is not held by a constitutional corporation: (a) if the RSE licensee that holds the licence is a body corporate—that the body; or (b) if the RSE licensee is a group of individual trustees—that the members of the group; only act as a trustee of superannuation funds that have governing rules providing that the sole or primary purpose of the fund is the provision of old‑age pensions. Licences held by groups of individual trustees (5) The following additional conditions are imposed on each RSE licence held by a group of individual trustees: (a) the members of the group must make all reasonable efforts to ensure that the group always has at least 2 members; (b) any continuous period for which the group has less than 2 members must be 90 days or less. Note: Paragraph 29E(1)(f) requires APRA to be notified of any change in the composition of the RSE licensee. Licences held by RSE licensees of transferee funds (6) An additional condition is imposed on each RSE licence held by an RSE licensee of a fund that has had benefits of members and beneficiaries transferred to it from a transferor fund under Part 18 (whether while the RSE licensee was the RSE licensee of the fund or earlier). The condition is that, while the RSE licensee is the RSE licensee of the fund, the RSE licensee assumes the obligation to pay benefits to those who were members or beneficiaries of the transferor fund immediately before the transfer. Prescribed conditions imposed on classes of licences (7) An additional condition prescribed by a regulation made for the purposes of this subsection as a condition applying to all RSE licences of a specified class is imposed on each RSE licence of that class. (8) A specified class mentioned in subsection (7) may be a class other than a class provided for under subsection 29B(2) or (3) or under regulations made for the purposes of subsection 29B(4). 29EA Additional conditions imposed on individual licences by APRA (1) APRA may, at any time, impose an additional condition on an RSE licence by giving the RSE licensee a notice setting out the additional condition. (2) A condition imposed under subsection (1) must not be inconsistent with any condition imposed by, or under, section 29E on an RSE licence. Note 1: Breach of a licence condition may lead to consequences such as a direction from APRA to comply with the condition (see section 29EB) or cancellation of the licence (see section 29G). Note 2: An RSE licensee must notify APRA if the RSE licensee breaches a licence condition: see section 29JA. Note 3: RSE licensees may apply to APRA to have conditions imposed under this section varied or revoked: see section 29F. (3) Without limiting subsection (1), an additional condition imposed under that subsection on an RSE licence may provide that the body corporate that is the RSE licensee, or each of the members of a group of individual trustees that is the RSE licensee, must not act as a trustee under that RSE licence for a registrable superannuation entity other than: (a) a registrable superannuation entity specified in the condition; or (b) a registrable superannuation entity included in the class of registrable superannuation entities specified in the condition. (4) Without limiting subsection (1), an additional condition imposed under that subsection on an RSE licence may provide that the RSE licensee must ensure that a fund specified in the condition, or in a class of funds specified in the condition, must comply with the alternative agreed representation rules whenever section 92 applies to the fund. However, before imposing such a condition, APRA must have regard to any written guidelines determined by APRA under this subsection. (5) If the RSE licensee is also a financial services licensee: (a) APRA must consult ASIC before imposing a condition that, in APRA's opinion, might reasonably be expected to affect the RSE licensee's ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and (b) APRA must inform ASIC about the imposition of any condition not covered by paragraph (a) within one week after the condition is imposed. (6) A failure to comply with a requirement of subsection (5) does not invalidate the imposition of any condition. (7) An additional condition imposed under this section comes into force on the later of: (a) the day on which APRA gives the RSE licensee the notice of the condition; or (b) the day specified in the notice as the day on which the condition comes into force. 29EB Directions to comply with licence conditions APRA may direct an RSE licensee to comply with a specified condition of its RSE licence by a specified time if APRA has reasonable grounds to believe that the RSE licensee has breached the condition. The direction must: (a) be by notice in writing given to the RSE licensee; and (b) specify a time that is reasonable in the circumstances. Note: A failure to comply with a direction may lead to cancellation of the RSE licence (see section 29G) and may be an offence (see section 29JB). Division 6—Varying RSE licences 29F Applications for variation of RSE licences (1) An RSE licensee may apply to APRA for one or both of the following: (a) variation of its RSE licence so that the RSE licence is an RSE licence of a different class; (b) variation or revocation of a condition that APRA has imposed on its RSE licence under section 29EA. (2) An application under this section must: (a) be in the approved form; and (b) contain the information required by the approved form; and (c) if the application is for a variation of an RSE licence so that it is an RSE licence of a different class—be accompanied by the application fee (if any) prescribed for the type of variation by regulations made for the purposes of this paragraph. 29FA APRA may request further information (1) APRA may give an RSE licensee that makes an application under section 29F a notice requesting the RSE licensee to give APRA, in writing, specified information relating to the application by a specified time that is reasonable in the circumstances. (2) APRA may decide to treat an application under section 29F as having been withdrawn if the RSE licensee: (a) does not comply with a request to provide information under this section; and (b) does not have a reasonable excuse for not complying. (3) If APRA decides to treat an application under section 29F as having been withdrawn, APRA must take all reasonable steps to ensure that the RSE licensee is given a notice informing the RSE licensee of: (a) APRA's decision; and (b) the reasons for that decision; as soon as practicable after making the decision. 29FB Period for deciding applications (1) APRA must decide an application under section 29F within 60 days of receiving the application, unless APRA extends the period for deciding the application under subsection (2). (2) APRA may extend the period for deciding an application under section 29F by up to 60 days if APRA informs the RSE licensee of the extension: (a) in writing; and (b) within 60 days of receiving the application. (3) If APRA extends the period for deciding an application under section 29F, it must decide the application within the extended period. (4) If APRA has not decided an application under section 29F 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. 29FC APRA may vary RSE licences in accordance with applications (1) APRA may, by notice to an RSE licensee: (a) vary the RSE licensee's RSE licence so that it is an RSE licence of a different class; or (b) vary or revoke a condition that APRA has imposed on the RSE licence under section 29EA; in accordance with an application under section 29F. (2) However: (a) an RSE licence must not be varied so that it becomes an RSE licence of a particular class unless APRA is satisfied that the RSE licensee will comply with any conditions imposed on that class of RSE licence; and (b) a condition as varied under paragraph (1)(b) must not be inconsistent with any condition imposed by section 29E; and (c) if the RSE licensee is also a financial services licensee: (i) APRA must consult ASIC before varying the RSE licence so that it is an RSE licence of a different class, if, in APRA's opinion, the variation might reasonably be expected to affect the RSE licensee's ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and (ii) APRA must consult ASIC before varying or revoking a condition that, in APRA's opinion, might reasonably be expected to affect the RSE licensee's ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and (iii) APRA must consult ASIC before varying a condition so that it would, in APRA's opinion, become a condition that might reasonably be expected to have an effect as described in subparagraph (ii); and (iv) APRA must inform ASIC about the variation or revocation of any condition not covered by subparagraph (i), (ii) or (iii) within one week after the condition is varied or revoked. (3) A failure to comply with a requirement of paragraph (2)(c) does not invalidate: (a) the variation of an RSE licence so that it is an RSE licence of a different class; or (b) the variation or revocation of a licence condition. (4) APRA is not required to vary the class of, or vary or revoke any condition of, an RSE licence in the terms requested by an RSE licensee in an application under section 29F. 29FD APRA may vary or revoke licence conditions on its own initiative (1) APRA may, on its own initiative, vary or revoke any condition that it imposed on an RSE licence under section 29EA. (2) However: (a) a condition as varied under subsection (1) must not be inconsistent with any condition imposed by section 29E; and (b) if the RSE licensee that holds the licence is also a financial services licensee: (i) APRA must consult ASIC before varying or revoking a condition that, in APRA's opinion, might reasonably be expected to affect the RSE licensee's ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides; and (ii) APRA must consult ASIC before varying a condition so that it would, in APRA's opinion, become a condition that might reasonably be expected to have an effect as described in subparagraph (i); and (iii) APRA must inform ASIC about the variation or revocation of any condition not covered by subparagraph (i) or (ii) within one week after the condition is varied or revoked. (3) A failure to comply with a requirement of paragraph (2)(b) does not invalidate the variation or revocation of a condition. 29FE Notification of APRA's decisions under this Division (1) APRA must give a notice to an RSE licensee if APRA: (a) varies the RSE licensee's RSE licence under section 29FC so that it is an RSE licence of a different class; or (b) varies or revokes, under section 29FC or 29FD, a condition that APRA imposed on the RSE licence under section 29EA. (2) The notice must: (a) if paragraph (1)(a) applies—specify the class of the RSE licence after the variation; and (b) if paragraph (1)(b) applies: (i) identify the licence condition being varied or revoked; and (ii) specify any conditions imposed under section 29EA to which the licence is subject after the variation or revocation comes into force; and (c) state the reasons for the variation or revocation; and (d) specify the day, not earlier than the day on which APRA gives the notice, on which the variation or revocation comes into force. (3) If APRA refuses an application for a variation or revocation under section 29FC, APRA must take all reasonable steps to ensure that the RSE licensee that made the application is given a notice informing it of: (a) APRA's refusal of the application; and (b) the reasons for the refusal; as soon as practicable after refusing the application. 29FF When variations or revocations come into force etc. (1) If, under section 29FC, APRA varies an RSE licence so that it is an RSE licence of a different class: (a) the variation comes into force on the day specified in the notice under paragraph 29FE(2)(d); and (b) the variation remains in force until: (i) the licence is again varied so that it is an RSE licence of a different class; or (ii) the licence is cancelled. (2) If, under section 29FC or 29FD, APRA varies a condition imposed on an RSE licence: (a) the variation comes into force on the day specified in the notice under paragraph 29FE(2)(d); and (b) the variation remains in force until: (i) the condition is varied in an inconsistent manner; or (ii) the condition is revoked; or (iii) the licence is cancelled. (3) If, under section 29FC or 29FD, APRA revokes a condition imposed on an RSE licence, the revocation comes into force on the day specified in the notice under paragraph 29FE(2)(d). Division 7—Cancelling RSE licences 29G Cancellation of RSE licences (1) Subject to subsection (2), APRA may, in writing, cancel an RSE licence. Note: In some circumstances, APRA needs the consent of the Minister (see subsection (3)) or must inform or consult ASIC (see section 29GA). (2) Without limiting subsection (1), APRA may cancel an RSE licence under that subsection if: (a) the RSE licensee has requested, in the approved form, that the licence be cancelled; or (b) the RSE licensee is a body corporate and is a disqualified person for the purposes of Part 15; or (c) the RSE licensee has breached a condition imposed on the licence; or (d) APRA has reason to believe that the RSE licensee will breach a condition imposed on the licence; or (e) the RSE licensee has failed to comply with a direction by APRA under section 29EB; or (f) APRA has reason to believe that the RSE licensee will fail to comply with a direction by APRA under section 29EB. (3) APRA must not cancel an RSE licence under subsection (1) without the Minister's written consent, unless paragraph (2)(a) or (b) applies to the cancellation. (4) If APRA cancels an RSE licence it must take all reasonable steps to ensure that the body corporate or a member of the group that held the RSE licensee is given a notice informing the body corporate or group: (a) that APRA has cancelled the licence; and (b) of the reasons for the cancellation. 29GA Cancellation of RSE licences of financial services licensees (1) Before cancelling the RSE licence of an RSE licensee that is also a financial services licensee, APRA must consult ASIC if, in APRA's opinion, the cancellation might reasonably be expected to affect the RSE licensee's ability to provide one or more of the financial services (within the meaning of the Corporations Act 2001) that the RSE licensee provides. (2) If APRA cancels the RSE licence of an RSE licensee that is also a financial services licensee, APRA must inform ASIC of the cancellation within one week after the cancellation. (3) A failure to comply with a requirement of this section does not invalidate the cancellation of an RSE licence. 29GB APRA may allow RSE licence to continue in effect In a notice that APRA gives to an RSE licensee cancelling its RSE licence, APRA may specify that the RSE licence continues in effect as though the cancellation had not happened for the purposes of: (a) a specified provision, administered by APRA, of this Act or the regulations; or (b) a specified provision, administered by APRA, of any other law of the Commonwealth; in relation to specified matters, a specified period, or both. Division 8—Risk management strategies Subdivision A—Contents of risk management strategies 29H Contents of risk management strategies (1) A risk management strategy must set out reasonable measures and procedures that a body corporate or group of individual trustees is to apply to identify, monitor and manage risks that arise: (a) in relation to its activities, or proposed activities, as an RSE licensee; and (b) in relation to all its other activities, or proposed activities, to the extent that they are relevant to its activities, or proposed activities, as an RSE licensee. (2) Without limiting subsection (1), the risk management strategy of a body corporate or group of individual trustees must set out: (a) reasonable measures and procedures that the body or group is to apply to identify, monitor and manage: (i) the risks associated with governance and decision‑making processes; and (ii) the risks that arise as a result of entering into outsourcing arrangements (other than arrangements that relate only to a particular registrable superannuation entity); and (iii) the risks arising from any changes to the RSE licensee law; and (iv) the risks of potential fraud and theft; and (b) the circumstances in which an audit of the risks referred to in this section is to be undertaken; and (c) such other matters as are prescribed by regulations made for the purposes of this paragraph. (3) The risk management strategy must be signed: (a) if it is the risk management strategy of a body corporate—by the body; or (b) if it is the risk management strategy of a group of individual trustees—by each member of the group. Note: An RSE licence will not be granted unless there is a risk management strategy that meets the requirements of this section: see paragraph 29D(1)(e). (4) The risk management strategy must not by reference incorporate provisions of any other document unless that other document is available, without charge, to members of the public. (5) A risk management strategy does not fail to comply with this section merely because it reproduces information contained in the risk management plan for an entity of which an applicant for an RSE licence is, or proposes to be, the RSE licensee. Subdivision B—Maintaining and reviewing risk management strategies 29HA Requirement to maintain and review risk management strategies (1) An RSE licensee must: (a) ensure that at all times its risk management strategy is up to date; and (b) ensure that its risk management strategy is reviewed at least once each year to ensure that it complies with section 29H; and (c) modify, or replace, its risk management strategy in accordance with section 29HB if at any time the RSE licensee becomes aware that the risk management strategy no longer complies with section 29H. (2) An RSE licensee must review its risk management strategy within 60 days after the RSE licensee: (a) becomes the RSE licensee of a registrable superannuation entity (other than a registrable superannuation entity of which, at the time of the application for an RSE licence, the RSE licensee proposed to become the RSE licensee); or (b) becomes an acting trustee appointed under Part 17 of a superannuation entity following the suspension or removal of a former trustee of the entity under that Part. However, this subsection does not apply if review of the RSE licensee's risk management strategy is due under paragraph (1)(b) within the 60 days after the RSE licensee becomes an RSE licensee, or trustee, of the entity. Note: Only a person may be appointed as an acting trustee under Part 17: see section 134. 29HB Modifications etc. to risk management strategies (1) An RSE licensee may: (a) modify its risk management strategy; or (b) repeal its risk management strategy and replace it with a new risk management strategy. (2) However, after the modification or the repeal and replacement, the risk management strategy must comply with section 29H. (3) APRA may direct an RSE licensee to modify its risk management strategy as set out in the direction, by a specified time, to ensure that the strategy complies with section 29H. The direction is to be given by notice to the RSE licensee. Note: A failure to comply with a direction may be an offence: see section 29JC. (4) A time specified in a direction given to an RSE licensee under subsection (3) must be at least 14 days after the direction is given to the RSE licensee. 29HC Notification of modifications etc. to risk management strategies (1) If an RSE licensee modifies its risk management strategy, the RSE licensee must give APRA: (a) a copy of the modification; and (b) a copy of the strategy as modified; within 14 days after making the modification. (2) If an RSE licensee repeals its risk management strategy (the old strategy) and replaces it with another risk management strategy (the new strategy), the RSE licensee must give APRA: (a) a copy of the new strategy; and (b) a written statement to the effect that the new strategy replaces the old strategy; within 14 days after the old strategy is repealed. (3) Any copy or statement given to APRA by an RSE licensee under this section must be signed by the RSE licensee. Note: If the RSE licensee is a group of individual trustees, the copy or statement must be signed by each of the members of the group: see subsection 13A(6). (4) A person commits an offence if: (a) the person is: (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 is in breach of subsection (1), (2) or (3). Penalty: 50 penalty units. (5) A person commits an offence if: (a) the person is: (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 is in breach of subsection (1), (2) or (3). This is an offence of strict liability. Penalty: 25 penalty units. Note 1: For strict liability, see section 6.1 of the Criminal Code. Note 2: 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. Subdivision C—Miscellaneous 29HD APRA to be given information (1) APRA may give an RSE licensee a notice requesting it to give APRA, in a specified way, specified information relating to its risk management strategy by a specified time that is reasonable in the circumstances. (2) A person commits an offence if: (a) the person is: (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) there has been a failure by the RSE licensee to comply with a notice under subsection (1). Penalty: 50 penalty units. (3) A person commits an offence if: (a) the person is: (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) there has been a failure by the RSE licensee to comply with a notice under subsection (1). This is an offence of strict liability. Penalty: 25 penalty units. Note 1: For strict liability, see section 6.1 of the Criminal Code. Note 2: 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 3: Sections 137.1 and 137.2 of the Criminal Code also create offences for providing false or misleading information or documents. (4) Subsection (2) or (3) does not apply if the RSE licensee has a reasonable excuse for the failure to comply with the notice under subsection (1). Note: A defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code). Division 9—Offences and self‑incrimination 29J Being trustee of a registrable superannuation entity while unlicensed etc. (1) A person who was not a trustee of a registrable superannuation entity at the start of the licensing transition period must not be a trustee, or act as a trustee, of a registrable superannuation entity at a time during that period, unless at that time at least one of the following paragraphs apply: (a) the person holds an RSE licence that enables the person to be the trustee of the entity; (b) the person is a member of a group of individual trustees that holds an RSE licence that enables the members of the group to each be a trustee of the entity; (c) the person has been a trustee of the entity for less than 30 days and that entity has at least one other trustee who has been a trustee of it from immediately before the start of the licensing transition period until that time; (d) the person, and at least one other trustee of the entity who has been a trustee of it from immediately before the start of the licensing transition period until that time, have applied for an RSE licence that would enable them to be a trustee of that entity and the application has not been finally determined or disposed of; (e) the person is an approved trustee. (2) Despite subsection 13.3(3) of the Criminal Code, a defendant does not bear an evidential burden in relation to any matter in subsection (1) of this section. (3) A person that contravenes subsection (1) commits an offence. Penalty: Imprisonment for 2 years, or 120 penalty units, or both. Note: 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. (4) A person must not be a trustee of a registrable superannuation entity, or act as a trustee of a registrable superannuation entity, if the person: (a) is a body corporate; and (b) is not the only trustee of the registrable superannuation entity. (5) A person that contravenes subsection (4) commits an offence. Penalty: Imprisonment for 2 years, or 120 penalty units, or both. Note: 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. (6) This section does not prevent an RSE licensee from engaging or authorising persons to act on its behalf. 29JA Failing to notify breach of licence condition (1) An RSE licensee must give APRA a notice setting out the particulars of a breach by the RSE licensee of a condition imposed on its RSE licence as soon as practicable after, and in any event within 14 days after: (a) if the RSE licensee is a body corporate—the body corporate; or (b) if the RSE licensee is a group of individual trustees—a member of the group; becomes aware that the breach has occurred. (2) A person commits an offence if: (a) the person is: (i) a b