Superannuation Industry (Supervision) Regulations 1994
[ CCH Note: Pt 4 is to have effect, in relation to regulated superannuation funds, and their trustees, as if it were modified by inserting reg 4.08A - see Modification Declaration No 10 under reg 4.08A .]
(Repealed by SLI No 155 of 2013)
Reg 4.16 repealed by SLI No 155 of 2013, reg 4 and Sch 1 item 98, effective 1 July 2013. Reg 4.16 formerly read:
material business activity
REGULATION 4.16 OPERATING STANDARD
-
OUTSOURCING ARRANGEMENTS OF RSE LICENSEES
4.16(1)
In this regulation:
means a business activity of the RSE licensee of a registrable superannuation entity, a disruption to which, or the poor performance of which, has the potential to:
(a)
affect the interests of members or beneficiaries of the entity; or
(b)
have a significant impact on the business operations, reputation, rate of return, profitability or net assets of:
(i)
the entity; or
(ii)
the RSE licensee of the entity.
material outsourcing agreement
means an agreement or arrangement:
(a) under which a person other than the RSE licensee (a service provider ) is to perform a material business activity; and
(b) entered into with the service provider 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 - the group as a whole, or any member of the group.
service provider
does not include:
(a) if the RSE licensee is a body corporate - an employee of the body corporate acting in the capacity of an employee of the body corporate, or an officer of the body corporate acting in the capacity of an officer of the body corporate; or
(b) if the RSE licensee is a group of individual trustees - an employee of the group, or an employee of any member of the group, acting in the capacity of an employee of the group, or in the capacity of an employee of a member of the group.
4.16(2)
For paragraphs 31(2)(sa) , 32(2)(la) and 33(2)(ja) of the Act, the standard stated in this regulation is applicable to material outsourcing agreements.
Note: An RSE licence will not be granted unless APRA has no reason to believe that the RSE licensee law would not be complied with. The RSE licensee law includes this regulation. See subsection 10(1) and paragraph 29D(1)(a) of the Act.
4.16(3)
A material outsourcing agreement must comply with this regulation.
4.16(4)
A material outsourcing agreement must:
(a) be in writing; and
(b) state the commencement date of the agreement; and
(c) contain default arrangements and termination provisions; and
(d) provide for dispute resolution; and
(e) contain liability and indemnity provisions; and
(f) provide for confidentiality, privacy and security of information; and
(g) contain a pricing, fee and payments structure in relation to the performance of the material business activity; and
(h) contain audit, monitoring and assessment procedures in relation to the performance of the material business activity; and
(i) provide for business continuity planning, including transfer protocols relating to the handover of functions from the service provider to either a successor service provider or the RSE licensee on the cessation of the material outsourcing agreement.
4.16(5)
A material outsourcing agreement must provide that:
(a) the service provider must, on the written request of the RSE licensee or APRA, and within a time and at a place specified in the request that is reasonable in the circumstances, provide the RSE licensee or APRA, as requested, with any documents or information in the possession of the service provider relating to:
(i) the material outsourcing agreement; or
(ii) the material business activity performed under the agreement; and
(b) the service provider must, on the written request of the RSE licensee or APRA, and at a time that is reasonable in the circumstances, allow the RSE licensee or APRA, as requested, to:
(i) conduct on-site visits to the service provider's premises; and
(ii) access any documents or information relating to the registrable superannuation entity held at those premises; and
(c) the service provider must, on the written request of the RSE licensee or APRA, and within a time specified in the request that is reasonable in the circumstances, have an audit of its business activities under the material outsourcing agreement conducted by an independent auditor.
4.16(6)
A material outsourcing agreement must provide that any agreement or arrangement that a service provider enters into with another service provider for the performance of a material business activity under the material outsourcing agreement must comply with this subregulation and with subregulations (4) and (5), as if the agreement or arrangement were a material outsourcing agreement.
[ CCH Note: Modification declaration No 1 of 2007 (No 1 of 2007, registered on and effective from 29 June 2007).
Regulation 4.16 of the Regulations is modified by including, after subregulation 4.16(6):
]
(6A)
Subregulation (6) does not apply to a material outsourcing agreement between an RSE licensee of a registrable superannuation entity and a custodian, to the extent that:
(a) the agreement or arrangement is between:
(i) the custodian and a sub-custodian; or
(ii) a sub-custodian and another sub-custodian; and
(b) the material outsourcing agreement contains a provision that the custodian accepts responsibility for any liability arising from the failure of any sub-custodian to exercise reasonable care in the custody of the assets of the registrable superannuation entity.
(6B)
For the purposes of subregulation (6A), the liability of a custodian to an RSE licensee must not be dependent upon any recovery of losses by the custodian from any sub-custodian.
(6C)
For the purposes of subregulations (6A) and (6B), a sub-custodian means a person (other than an RSE licensee of a registrable superannuation entity or a securities depository) who, under a written contract with a custodian or another sub-custodian, performs any custodial function, in relation to the assets of a registrable superannuation entity, that the custodian is required to perform under a written contract with the RSE licensee of the registrable superannuation entity.
(6D)
For the purposes of subregulation (6C), securities depository means a book-entry or other settlement system or clearing house or agency through which a custodian or a sub-custodian may transfer, settle, clear, deposit or maintain securities, whether in certificated or uncertificated form, and includes any services provided by any network service provider or carriers or settlement banks used by a settlement system or clearing house or agency.
[ CCH Note: Modification declaration No 2 of 2006 (No 2 of 2006, registered on and effective from 30 June 2006).
Regulation 4.16 of the Regulations is modified by including, after subregulation 4.16(6):
]
(6A)
However, subregulation (6) does not apply to a material outsourcing agreement between an RSE licensee of a registrable superannuation entity and a custodian to the extent that:
(a) the agreement or arrangement is between the custodian and another service provider that is a sub-custodian; and
(b) the material outsourcing agreement contains a provision that the custodian accepts responsibility for liability arising from the failure ofthe sub-custodian to exercise reasonable care in the custody of the assets of the registrable superannuation entity.
(6B)
For the purposes of subregulation (6A), the liability of a custodian to an RSE licensee must not be dependent upon any recovery of losses by the custodian from the sub-custodian.
(6C)
For the purposes of subregulations (6A) and (6B), a sub-custodian means a person (other than an RSE licensee of a registrable superannuation entity or a securities depository) who, under a written contract with a custodian, holds assets of a registrable superannuation entity.
(6D)
For the purposes of subregulation (6C), securities depository means a book-entry or other settlement system or clearing house or agency through which a custodian or a sub-custodian may transfer, settle, clear, deposit or maintain securities, whether in certificated or uncertificated form, and includes any services provided by any network service provider or carriers or settlement banks used by a settlement system or clearing house or agency.
4.16(7)
An RSE licensee or a service provider must not charge APRA a fee for any of the following:
(a) the provision of, or provision of access to, any documents or information under subregulation (5);
(b) the provision of access to the service provider's premises under subregulation (5);
(c) the conduct of an independent audit requested under subregulation (5).
4.16(8)
An RSE licensee must, if requested to do so by APRA, take all reasonable steps to enforce the material outsourcing agreement against a service provider in relation to:
(a) any matter mentioned in paragraph (5)(a), (b) or (c); and
(b) the matter mentioned in subregulation (6).
Note: Part 15 of the Act also contains standards for trustees, custodians and investment managers of superannuation entities.
Reg 4.16 inserted by SR No 113 of 2004, reg 3 and Sch 1 item 7, effective 1 July 2004.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.