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SUPERANNUATION LEGISLATION AMENDMENT (TRUSTEE OBLIGATIONS AND PRUDENTIAL STANDARDS) ACT 2012 (NO. 117, 2012) - SCHEDULE 2

Prudential standards

Part 1 -- Prudential standards

Superannuation Industry (Supervision) Act 1993

1  After Part 3

Insert:

Part 3A -- Prudential standards

   

34B   Object of this Part

                   The object of this Part is to provide for a system of standards in relation to prudential matters concerning registrable superannuation entities.

34C   APRA may determine prudential standards

             (1)  APRA may determine (in writing) standards ( prudential standards ) relating to prudential matters that must be complied with by:

                     (a)  all RSE licensees of registrable superannuation entities; or

                     (b)  the connected entities of all RSE licensees of registrable superannuation entities; or

                     (c)  a specified class of RSE licensees of registrable superannuation entities; or

                     (d)  a specified class of connected entities of RSE licensees of registrable superannuation entities; or

                     (e)  one or more specified RSE licensees of registrable superannuation entities; or

                      (f)  one or more specified connected entities of RSE licensees of registrable superannuation entities.

             (2)  A prudential standard may impose different requirements to be complied with:

                     (a)  by different classes of RSE licensees of registrable superannuation entities or connected entities of RSE licensees of registrable superannuation entities; or

                     (b)  in different situations; or

                     (c)  in respect of different activities.

             (3)  Without limiting the prudential matters in relation to which APRA may determine a prudential standard, a prudential standard may require the following entities to ensure that the entity's connected entities (or particular connected entities), or the entity and the entity's connected entities (or particular connected entities), collectively satisfy particular requirements:

                     (a)  each RSE licensee of a registrable superannuation entity;

                     (b)  each RSE licensee of a registrable superannuation entity included in a specified class of RSE licensees;

                     (c)  a specified RSE licensee of a registrable superannuation entity;

                     (d)  each of 2 or more RSE licensees of registrable superannuation entities.

             (4)  A prudential matter is a matter relating to:

                     (a)  the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the registrable superannuation entity, or the affairs of a connected entity of the RSE licensee, in such a way as to:

                              (i)  protect the interests of the beneficiaries of the registrable superannuation entity; or

                             (ii)  meet the reasonable expectations of the beneficiaries of the registrable superannuation entity; or

                     (b)  the conduct by a connected entity of an RSE licensee of a registrable superannuation entity of the affairs of the connected entity in such a way as to:

                              (i)  protect the interests of the beneficiaries of the registrable superannuation entity; or

                             (ii)  meet the reasonable expectations of the beneficiaries of the registrable superannuation entity; or

                     (c)  the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the licensee in such a way as:

                              (i)  to keep itself in a sound financial position; or

                             (ii)  not to cause or promote instability in the Australian financial system; or

                     (d)  the conduct by an RSE licensee of a registrable superannuation entity of the affairs of the registrable superannuation entity in such a way as not to cause or promote instability in the Australian financial system; or

                     (e)  the conduct by a connected entity of an RSE licensee of a registrable superannuation entity of the affairs of the connected entity in such a way as:

                              (i)  to keep itself in a sound financial position; or

                             (ii)  not to cause or promote instability in the Australian financial system; or

                      (f)  the conduct by an RSE licensee of a registrable superannuation entity, or a connected entity of the RSE licensee, of any of its affairs that are relevant to the registrable superannuation entity with integrity, prudence and professional skill; or

                     (g)  the appointment of auditors and actuaries; or

                     (h)  the conduct of audits and actuarial investigations.

             (5)  The prudential standards may provide for APRA to exercise powers and discretions under the standards, including but not limited to discretions to approve, impose, adjust or exclude specific prudential requirements in relation to the following:

                     (a)  a particular RSE licensee of a registrable superannuation entity;

                     (b)  a particular connected entity of an RSE licensee of a registrable superannuation entity;

                     (c)  specified RSE licensees of registrable superannuation entities;

                     (d)  specified connected entities of RSE licensees of registrable superannuation entities.

             (6)  APRA may, in writing, vary or revoke a standard.

             (7)  A standard referred to in paragraph (1)(e) or (f), or a variation of a standard referred to in those paragraphs, comes into force on the later of:

                     (a)  the day on which APRA satisfies subsection 34E(1) in relation to the standard or variation (obligation to give a copy to each RSE licensee and connected entity to which it applies); and

                     (b)  if APRA includes with the copy of the standard or variation a notice that the standard or variation will come into force on a later day--that later day.

             (8)  The revocation of a standard referred to in paragraph (1)(e) or (f) comes into force on the later of:

                     (a)  the day on which APRA satisfies subsection 34E(2) in relation to the revocation (obligation to give notice of the revocation to each RSE licensee or connected entity to which the standard relates); and

                     (b)  the day specified in that notice as the day on which the revocation comes into force.

             (9)  The following instruments made under this section are not legislative instruments:

                     (a)  a standard referred to in paragraph (1)(e) or (f);

                     (b)  an instrument varying or revoking a standard referred to in paragraph (1)(e) or (f).

           (10)  Otherwise, an instrument made under this section is a legislative instrument.

34D   Relationship between prudential standards, this Act and the regulations

             (1)  A prudential standard may be determined that elaborates, supplements or otherwise deals with any aspect of:

                     (a)  a prudential matter to which a covenant referred to in sections 52 to 53 or prescribed under section 54A relates; or

                     (b)  a prudential matter to which a provision of this Act or the regulations relates.

             (2)  However, a prudential standard is of no effect to the extent that it conflicts with this Act or the regulations.

34E   Notice of determination, variation or revocation of certain prudential standards

             (1)  If APRA determines or varies a prudential standard referred to in paragraph 34C(1)(e) or (f), APRA must give a copy of the standard or of the variation to each RSE licensee and connected entity to which the standard applies.

             (2)  If APRA revokes a prudential standard referred to in paragraph 34C(1)(e) or (f), APRA must give notice of the revocation to each RSE licensee and connected entity to which the standard applies.

34F   APRA to monitor prudential matters

                   The functions of APRA include:

                     (a)  collecting and analysing information on prudential matters concerning RSE licensees of registrable superannuation entities and connected entities of RSE licensees of registrable superannuation entities; and

                     (b)  encouraging and promoting the carrying out of sound practices in relation to prudential matters by RSE licensees of registrable superannuation entities and connected entities of RSE licensees of registrable superannuation entities; and

                     (c)  evaluating the effectiveness and carrying out of those practices.


 

Part 2 -- Consequential amendments

Superannuation Industry (Supervision) Act 1993

2  Section 4 (after table item dealing with Part No. 3)

Insert:

3A

Prudential standards concerning registrable superannuation entities

3  After subparagraph 6(1)(a)(i)

Insert:

                            (ia)  Part 3A;

4  Subsection 10(1)

Insert:

"connected entity" , in relation to an RSE licensee of a registrable superannuation entity, means:

                     (a)  a subsidiary of the RSE licensee (where the RSE licensee is a body corporate); and

                     (b)  any other entity of a kind prescribed by the regulations.

5  Subsection 10(1)

Insert:

"prudential matter" has the meaning given by subsection 34C(4).

6  Subsection 10(1)

Insert:

"prudential standard" means a standard determined by APRA under subsection 34C(1).

7  Subsection 10(1) (paragraph (dla) of the definition of reviewable decision )

Repeal the paragraph.

8  Subsection 10(1) (paragraph (do) of the definition of reviewable decision )

Repeal the paragraph.

9  Subsection 10(1) (before paragraph (dp) of the definition of reviewable decision )

Insert:

                 (doc)  a decision to determine, vary or revoke a prudential standard referred to in paragraph 34C(1)(e) or (f); or

10  Subsection 10(1) (after paragraph (a) of the definition of RSE licensee law )

Insert:

                    (aa)  prudential standards; and

11  Subsection 10(1)

Insert:

"subsidiary" has the same meaning as in the Corporations Act 2001 .

12  Subsection 13A(1)

Omit "and the regulations", substitute ", the regulations and the prudential standards".

13  Subsections 13A(2), (4), (5), (6) and (7)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

14  Subsection 29A(2)

Omit:

                   Note 3:          In order to obtain an RSE licence, the trustee, or group of individual trustees, must have a risk management strategy.

15  Subsection 29A(2)

Omit:

                   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.

16  Paragraph 29C(4)(c)

Omit "paragraph; and", substitute "paragraph.".

17  Paragraphs 29C(4)(d) and (e)

Repeal the paragraphs.

18  Subsection 29C(8)

Repeal the subsection.

19  Subsection 29C(9)

Omit ", (7) or (8)", substitute "or (7)".

20  Paragraph 29D(1)(d)

Repeal the paragraph, substitute:

                     (d)  APRA is satisfied that:

                              (i)  if the application is made by a body corporate--the body corporate meets the requirements of the prudential standards relating to fitness and propriety for RSE licensees; or

                             (ii)  if the application is made by a group of individual trustees--the group as a whole meets the requirements of the prudential standards relating to fitness and propriety for RSE licensees and each of the members of the group meets the requirements of the prudential standards relating to fitness and propriety for members of groups of trustees that are RSE licensees; and

21  Paragraph 29D(1)(e)

Repeal the paragraph.

22  Paragraphs 29E(1)(c) and (e)

Repeal the paragraphs.

23  After subsection 29EA(2)

Insert:

          (2A)  A condition may be expressed to have effect despite anything in the prudential standards.

24  Paragraph 29GB(a)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

25  Division 8 of Part 2A

Repeal the Division.

26  Section 29JC

Repeal the section.

27  Section 29JD

Omit ", 29JB or 29JC", substitute "or 29JB".

28  Paragraph 29L(2)(d)

Omit "rules); and", substitute "rules).".

29  Paragraphs 29L(2)(e) and (f)

Repeal the paragraphs.

30  Subsection 29L(5)

Repeal the subsection.

31  Subsection 29L(6)

Omit ", (4) or (5)", substitute "or (4)".

32  Paragraph 29M(1)(d)

Repeal the paragraph.

33  Divisions 5 and 6 of Part 2B

Repeal the Divisions.

34  Paragraph 29UB(a)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

35  Paragraph 35C(5)(c)

Omit "form; and", substitute "form.".

36  Paragraph 35C(5)(d)

Repeal the paragraph.

37  Subsections 68(6) and (7)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

38  After paragraph 135(1)(b)

Insert:

                   (ba)  the prudential standards; and

39  Paragraph 139(b)

After "the regulations", insert ", the prudential standards".

40  Subsection 262A(1)

After "this Act", insert ", the regulations or the prudential standards".

41  Paragraph 263(1)(a)

Omit "or the regulations", substitute ", the regulations, the prudential standards".

42  Section 301 (definition of SIS officer )

Repeal the definition, substitute:

"SIS officer" means a person exercising powers or performing functions under or in relation to this Act, the regulations or the prudential standards.

43  Section 301 (paragraphs (a), (b), (c) and (d) of the definition of statement made to an SIS officer )

Omit "or the regulations", substitute ", the regulations or the prudential standards".

44  Paragraphs 303(1)(a) and (b)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

45  Paragraphs 306(1)(a) and (2)(a)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

46  Paragraphs 307(1)(h) and (i) and 308(1)(f) and (g)

Omit "or the regulations", substitute ", the regulations or the prudential standards".

47  Section 341

Omit "or the regulations", substitute ", the regulations or the prudential standards".

48  Section 349

Omit "and the regulations", substitute ", the regulations and the prudential standards".

49  Section 349A

Omit "or the regulations", substitute ", the regulations or the prudential standards".

 

 



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