SIS Modification Declaration 2006/2

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COMMONWEALTH OF AUSTRALIA

This legislative instrument has been repealed by the Treasury (Spent and Redundant Instruments) Repeal Regulation 2013.

Superannuation Industry (Supervision) Act 1993

I, Thomas Karp, a delegate of APRA, under section 332 of the Superannuation Industry Supervision (Act) 1993 (the Act), DECLARE that Regulation 4.16 of the Regulations has effect as if it were modified as specified in the attached Schedule.

Superannuation Industry (Supervision) modification declaration No. 2 of 2006

The declaration comes into force upon registration on the Federal Register of Legislative Instruments and ceases to have effect on 1 July 2007.

Interpretation

In this Notice

APRA means the Australian Prudential Regulation Authority.

Federal Register of Legislative Instruments means the register established under section 20 of the Legislative Instruments Act 2003.

Regulations means the Superannuation Industry (Supervision) Regulations 1994.

Schedule - the class of persons to whom this declaration applies

All RSE licensees

Schedule - the manner in which the specified modifiable provision is modified

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 of the 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.

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29 June 2006

Thomas Karp
Executive General Manager
Supervisory Support Division

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Registration Number: F2006L02132

Registration Date: 30 June 2006

Explanatory Memorandum to SIS Modification Declaration 2006/2

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