Welcome to the latest issue of the KHQ Super Alert. This week ASIC published its enforcement priorities for 2025 and registered legislative instruments relating to its cost recovery activities. APRA also released the results of the second climate risk self-assessment survey completed by APRA-regulated entities.

ASIC – Enforcement priorities for 2025

On 14 November 2024, ASIC published its enforcement priorities in the coming 12 months. In relation to superannuation trustees, the following enforcement priorities are relevant:

• ‘Misconduct exploiting superannuation savings’;
• ‘Licensee failures to have adequate cyber-security protections’;
• ‘Greenwashing and misleading conduct involving ESG claims’; and
• ‘Member services failures in the superannuation sector’.

According to ASIC, in the last year it ‘increased its new investigations by 25% on the previous year…[and] also increased new civil proceedings by 23%’.

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ASIC – Proposed group to consider legislative complexities

On 14 November 2024, ASIC published a speech delivered by its Chair, Joe Longo. Mr Longo announced that ASIC will ‘convene a Simplification Consultative Group made up of key consumer advocates, business leaders and directors and industry groups’ to consider the current complexities in the corporations law. The purpose of this group ‘will be to identify how [ASIC] can more efficiently and more effectively administer the law. How the levers and guidance available to ASIC can be more helpful’. Mr Longo noted that ‘many aspects of the current system aren’t working as they should. There are clear costs to business, and hurdles for consumers and investors’.

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APRA – Results from climate risk self-assessment survey

On 13 November 2024, APRA released the results from its ‘second climate risk self-assessment survey’. All APRA-regulated entities were invited to participate in the voluntary survey. APRA considers that there ‘are areas for improvement’ and outlined the following key insights:

• ‘Most large entities have improved their climate risk maturity since 2022. However, around one-quarter have seen their climate risk maturity score decline’;
• ‘The average level of climate risk maturity…is broadly unchanged across large insurers and superannuation trustees’;
• ‘Areas of strength were ‘governance and strategy’, as well as ‘risk management’. Entities did not perform as well on ‘disclosure’ or ‘metrics and targets’’; and
• ‘Entities are starting to consider adjacent risks and practices such as nature risk and transition plans’.

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Government – Proposed portability of superannuation with Cook Islands

On 13 November 2024, the Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, issued a media release announcing that the government ‘has signed a Memorandum of Understanding (MOU) with the Cook Islands to allow portability of retirement savings between our two countries’. According to the Assistant Treasurer, the ‘scheme will allow those who move to the Cook Islands permanently to transfer their superannuation to the Cook Islands National Superannuation Fund….[and workers] with accumulated retirement savings in the Cook Islands will be able to move their savings to Australia upon permanent migration’.

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Legislation – ASIC cost recovery instruments registered

On 8 November 2024, the ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2024/821 and ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2024/822 were registered on the Federal Register of Legislation. According to the respective Explanatory Statements, these instruments specify:

• ‘ASIC’s regulatory costs and their attribution to each industry sub-sector for the 2023-24 financial year’; and
• ‘certain matters about size and composition of ASIC’s regulated population and of the metrics that apply to each industry sub-sector within that regulated population for the 2023-24 financial year’.

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APRA – Speech in relation to APRA priorities

On 8 November 2024, APRA published a speech delivered by APRA Member Therese McCarthy Hockey. Ms McCarthy Hockey discussed APRA’s four major priorities for 2025 including:

• ‘the System Risk Stress Test’, which according to Ms McCarthy Hockey is a ‘hypothetical scenario’ that will be examined and ‘will contain significant disruptions to financial markets, which will help [APRA] explore the impacts of liquidity stress between super funds and banks, and how their response impacts asset markets’;
• engagement with regulated entities ‘to ensure the industry is on track to comply with’ CPS 230 Operational Risk Management from 1 July 2025;
• ‘building a better understanding of the impacts of climate risk on the financial system’; and
• ‘APRA’s plan to review…prudential standards on governance and “fit and proper”’.

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Parliament – Scams Prevention Framework Bill 2024 (Cth) introduced to the House of Representatives

On 7 November 2024, the Scams Prevention Framework Bill 2024 (Cth) was introduced to the House of Representatives. The Bill’s Explanatory Memorandum outlines that the Bill proposes ‘a legislative framework to prevent and respond to scams. The amendments introduce a framework with overarching principles and a multi-regulator framework, and enables sector codes to be made and an EDR scheme to be authorised’.

On the same day, in an associated media release by the Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, and the Hon Michelle Rowland MP, Minister for Communications, stated that ‘[b]anks, social media platforms and telecommunications companies face hefty fines if they do not take reasonable steps to prevent, detect, disrupt, respond and report scams and attempted scams in their businesses’.

The release also clarified that ‘[t]he Australian Competition and Consumer Commission (ACCC) will have new powers to direct businesses to take specific steps to keep their customers safe from scammers and the Australian Financial Complaints Authority (AFCA) will be empowered to resolve consumer claims over scams in these sectors’. As referred to in our Super Alert of 25 October 2024, the Government had previously announced that it would expand AFCA’s remit to include scam prevention.

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Legislation – Corporations (Fees) Amendment (RSE Auditors) Regulations 2024 come into force

On 7 November 2024, the Corporations (Fees) Amendment (RSE Auditors) Regulations 2024 (Cth) were registered on the Federal Register of Legislation. According to the Explanatory Statement, the purpose of these regulations ‘is to prescribe that there is no fee for applications made to the Australian Securities and Investments Commission (ASIC) for the resignation, removal or appointment of Registrable Superannuation Entity (RSE) auditors’. The regulations apply to applications made on or after 1 July 2023.

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