ASIC's letter to super trustees on guidance and relief available

ASIC has written to all superannuation trustees to advise them of recently released guidance and relief.

ASIC has also addressed queries about portfolio holdings disclosure. The new portfolio holdings disclosure provisions in section 1017BB of the Corporations Act apply in relation to the reporting day that is 30 June 2014 and to later reporting days.

ASIC understands there is concern in industry that although the disclosure requirements may start in mid-2014, custodians and other third parties are required to report holdings to trustees in keeping with the original 31 December 2013 time period. The letter states that ASIC does not expect reporting by third parties before the disclosure obligations formally start.

Text of letter to trustees December 2013

17 December 2013

Trustee name and address

Dear Sir/Madam

FURTHER SUPER REFORM GUIDANCE AND RELIEF FROM ASIC

ASIC has recently issued a range of regulatory materials and relief to assist the industry with the implementation of the superannuation reforms.

The guidance we have released relates to the new product dashboard requirements for MySuper products that take effect on 31 December 2013, and the new fees and costs disclosure requirements for product disclosure statements (PDSs) and periodic statements, as well as information about executive officer remuneration and systemic transparency. We have also released a consultation paper about keeping superannuation websites up to date.

The class order extends the transition period for the new fees and costs regime until 1 July 2014, as well as allowing trustees to include product dashboards in periodic statements by referring to a website, rather than including a hard copy of the product dashboard, for reporting periods ending before1 January 2015. The no-action position means that information about accrued default amounts does not have to be included in an exit statement.

The purpose of this letter is to alert you to the availability of this guidance and relief and to provide you with some further information about the implementation of the reforms from an ASIC perspective. Further detail is set out below.

Product dashboard

Information Sheet 170 MySuper product dashboard requirements for superannuation trustees (INFO 170) explains the information that must be provided for each of the five measures required to be incorporated into a MySuper product dashboard.

INFO 170 also contains an example of what the product dashboard may look like, to help illustrate the potential of the dashboard. I would emphasise it is an example only, as not all of the contents are specified in legislation or APRA standards, and the example has been informed by feedback from independent consumer testing conducted by Latitude Insights. The results of the independent testing have also been released as ASIC Report 378 Consumer testing of the MySuper product dashboard (REP 378).

Further information is available on our website: see 13-328MR ASIC issues further super reforms guidance.

Relief and no-action position

The commencement date of the fees and costs disclosure obligations for superannuation product disclosure statements (PDSs) is deferred until 1 July 2014 by Class Order 13/1534 [CO 13/1534] Deferral of Stronger Super amendments in relation to PDS and periodic statement disclosure. There is a deferral for periodic statements given under section 1017D of the Corporations Act 2001 (the Act) in relation to reporting periods ending before 1 July 2014. Of course, trustees can transition to the new fees and costs disclosure regime earlier than this and many trustees have already done so.

In addition, [CO 13/1534] enables trustees to reference product dashboards in periodic statements by reference to a website address without provision of a hard copy for reporting periods ending before 1 January 2015.

ASIC has also provided the industry with a no-action position so that information about accrued default amounts does not need to be included in an exit statement: see regulation 9.46A of the Superannuation Industry (Supervision) Regulations 1994.

Further information is available on our website: see 13-342MR ASIC provides relief from new super disclosure requirements.

Consultation and Class Orders: s29QB

ASIC has also released Consultation Paper 219 Keeping superannuation websites up to date (CP 219), which considers what ‘up to date at all times’ means in the context of s29QB of the Superannuation Industry (Supervision) Act 1993 (SIS Act). These requirements relate to executive officer remuneration disclosure and other systemic transparency measures.

We propose giving trustees a ‘safe harbour’, so that they are taken to comply with the updating obligation in s29QB if they update the fund website within a specified time: generally 14 days. We are seeking feedback from industry by 3 February 2014 and we would encourage you to consider and comment on the proposals in this paper.

As you are no doubt aware, we have also extended the timeframe for compliance with the requirements of s29QB until 1 July 2014: see Class Order [CO 13/830] RSE licensees of registrable superannuation entities.

FAQs on fees and costs disclosure

We have issued FAQ guidance to help super trustees with respect to the changes to superannuation and managed investment fee disclosure requirements. Our guidance emphasises that there should not be double counting of fees.

Further, ASIC has issued FAQs in relation to the s29QB disclosure requirements, including providing guidance on the definition of executive officers.

These FAQs are available on our superannuation page, under the Stronger Super heading at www.asic.gov.au.

Portfolio holdings disclosure

As you would be aware, the new portfolio holdings disclosure provisions in section 1017BB of the Act apply in relation to the reporting day that is 30 June 2014 and to later reporting days. ASIC understands there is concern in industry that although the disclosure requirements may start in mid-2014, custodians and other third parties are required to report holdings to trustees in keeping with the original 31 December 2013 time period: see s1017BC, 1017BD and s1017BE of the Act. ASIC does not expect reporting by third parties before the disclosure obligations formally start. We have FAQs on our website which addresses portfolio holdings disclosure.

You should also be aware that the Government has recently released a Discussion Paper on Governance and Systemic Transparency, which closes for comment on 12 February 2014. This Discussion Paper considers aspects of the portfolio holdings disclosure regime, including whether the commencement date for portfolio holdings disclosure should be delayed beyond 1 July 2014.

If you have views about the way the portfolio holdings disclosure regime should operate, or views on a suitable commencement date for this disclosure, we would encourage you to provide your feedback through this consultation process. The Discussion Paper is available on the Treasury website at www.treasury.gov.au.

ASIC’s facilitative approach to compliance

Finally, ASIC wants to remind the industry that we are taking a facilitative compliance approach for super reforms until 1 July 2014. We will adopt a measured approach where inadvertent breaches arise or systems changes are underway, provided industry participants are making reasonable efforts to comply.

Further information

All guidance, reports and other information noted is available on our superannuation page on the ASIC website www.asic.gov.au. We encourage you to review this guidance at your earliest opportunity. We update this website as changes occur.

We also have other useful information for trustees, including updated Information Sheet 155 Shorter PDSs: Complying with requirements for superannuation products and simple managed investment schemes (INFO 155), which incorporates feedback from some recent PDS review work undertaken by ASIC. It also includes some information about the superannuation reforms and the impacts these reforms have on the shorter PDS regime.

If you have queries about the superannuation reforms, please contact ASIC at StrongerSuperReforms@asic.gov.au.

Yours sincerely

Gerard Fitzpatrick

Senior Executive Leader

Investment Managers and Superannuation

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