ASIC urged to use ATO and super to reunite unclaimed remediation monies
The Australian Securities and Investments Commission (ASIC) may think that unclaimed client remediation money should go to charities or not for profit consumer groups, but superannuation funds have other ideas – they want it directed, via the Australian Taxation Office (ATO), to superannuation.
In fact, the superannuation funds want unclaimed remediation monies to be directed to the specifically identified clients via the ATO superannuation register and then into their active superannuation accounts.
In a submission to ASIC’s current consultation on Consumer Remediation, the Association for Superannuation Funds of Australia has made clear it does not see ASIC’s proposal for licensees to lodge unclaimed monies with a “charity or no-for-profit registered with the Australian Charities and Not for Profits Commission.
“For superannuation funds, an alternative option is for any unpaid money to be instead paid to the ATO so that it can be reunited with the consumer’s active superannuation fund account,” the ASFA has told ASIC.
The superannuation funds also signalled their resistance to fund trustees to be distracted and have costs imposed to compensate clients for small amounts, and therefore signalled its opposition to any removal of the broad low-value compensation threshold of $20.
“ASFA does not support the removal of the broad low‐value compensation threshold of $20. As the current RG 256 notes, paying compensation to clients can require significant effort on the part of the licensee,” it said. “Requiring licensees to incur significant compliance and administrative costs in an effort to pay consumers compensation amounts as low as $1 would not be, in ASFA’s view, the best use of resources.”
“ASFA encourages ASIC to reconsider the removal of a broad low‐value compensation threshold or, alternatively, allow superannuation funds to pay low‐value remediation amounts to the ATO so that the ATO could reunite these amounts with the consumer’s active superannuation account.”
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
