DRAFT September These instructions assist completion of Reporting Form SRF Services (SRF 231.0).

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1 Reporting Form SRF Services Instructions DRAFT September 2012 These instructions assist completion of Reporting Form SRF Services (SRF 231.0). SRF collects information relating to all services provided to an RSE both by the RSE licensee and by external service providers. Information reported in SRF is required for prudential and publication purposes. Reporting level SRF must be completed for each: RSE excluding SAFs and SMADFs; and RSE licensee of SAFs or SMADFs. Interpretation For the purposes of this instruction guide: AASB means the Australian Accounting Standards Board; RSE means a registrable superannuation entity as defined in section 10 of the SIS Act; RSE licensee means a constitutional corporation, body corporate, or group of individual trustees, that holds an RSE licence granted under section 29D of the SIS Act; Single Member Approved Deposit Fund (SMADF) means a superannuation entity that is an approved deposit fund within the meaning of the SIS Act and has only one member; SIS Act means Superannuation Industry (Supervision) Act 1993; and Small APRA Fund (SAF) means a superannuation entity that is a regulated superannuation fund within the meaning of the SIS Act that has fewer than five members. Specific instructions Report all items as at the end of the reporting period, including with respect to events that occurred during the reporting period. Report the fair value, within the meaning given in AASB 13 Fair Value Measurement, in thousands of dollars for all items unless otherwise specified. SRF Instructions - 1

2 Report all items in accordance with the Australian Accounting Standards unless otherwise specified. Terms highlighted in bold italics indicate that the definition is provided in these instructions. Additional definitions are provided at the end of these instructions. Notifying APRA of new outsourcing agreements and updated information Prudential Standard SPS 231 Outsourcing (2012) (SPS 231) requires an RSE licensee to notify APRA as soon as possible after entering into an outsourcing agreement, and in any event, no later than 20 business days after execution of the agreement. This notification requirement applies to all outsourcing of material business activities. An RSE licensee may use SRF for the purposes of notifying APRA that it has entered into a new outsourcing agreement. Note, however, that the summary of the key risks involved in the outsourcing agreement and the risk mitigation strategies in place to address these risks required in SPS 231 will have to be notified separately to APRA. In addition, an RSE licensee is encouraged to update the services reported on SRF during a reporting period where a new service provider is appointed, or an arrangement with an existing service provider ceases. Where a new service provider is appointed, report new service provider and where the RSE licensee no longer has an agreement with an existing service provider, report no longer a service provider of RSE licensee in column 5 of item 1. Report blank if an existing service provider has not otherwise changed. Details of services Item 1 collects information about all services undertaken by the RSE licensee itself and each service provided to the RSE licensee s business operations by external service providers with respect to the RSE, by type of service provider. Item 1 Report the role performed by the service provider in column 1. The types of roles are: accountant, actuary, administrator; approved auditor; custodian, insurer professional indemnity insurance; insurer; internal auditor; investment advisor; investment manager; lawyer or other role. Report the description of the other role in column 2 where other role is reported in column 1. Report the type of service provider in column 3. The types of service providers are: external associate provider, external non- associate provider and RSE licensee as provider. If the service provided is a material business activity, report yes in column 4; otherwise, report no. Where a new service provider is appointed, report new service provider and where the RSE licensee no longer has an agreement with an existing service provider, report no longer a service provider of RSE licensee in column 5. Report existing if an existing service SRF Instructions - 2

3 provider has not otherwise changed. Report the name of the service provider in column 6. For services reported as RSE licensee as provider in column 3, leave column 6 blank. Report the ABN of the service provider in column 7. For services reported as RSE licensee as provider in column 3, leave column 7 blank. Report the cost of the service performed in column 8. Where more than one service provider of the same type undertakes a business activity, report the portion of business activity undertaken by each service provider as a whole number percentage in column 9. Report the date of last review of the service provider as DD/MM/YYYY in column 10. If investment manager is reported in column 1, report the value of investments domiciled in Australia in column 11. If investment manager is reported in column 1, report the value of investments domiciled internationally in column 12. External associate provider External associate provider non- Represents where a business function is undertaken by an outsourced service provider, rather than by the RSE licensee and its employees, and the service provider is an associate of the RSE licensee. Reference: SIS Act, s. 12; Prudential Standard SPS 231 Outsourcing (2012). Represents where a business function is undertaken by an outsourced service provider, rather than by the RSE licensee and its employees, and the service provider is not an associate of the RSE licensee. Reference: SIS Act, s. 12; Prudential Standard SPS 231 Outsourcing (2012). RSE licensee as provider Is the service a material business activity? ABN Date of last review Represents where a business function is undertaken by the RSE licensee and its employees, rather than by an outsourced service provider. Represents whether the service is a material business activity within the meaning given in Prudential Standard SPS 231 Outsourcing. Reference: Prudential Standard SPS 231 Outsourcing (2012). Represents an unique public identifier issued to an entity registered in the Australian Business Register to be used in dealings with government. A company registered under the Corporations Act 2001 or a business entity carrying on an enterprise in Australia is entitled to an ABN. Represents the date on which the RSE licensee most recently reviewed the arrangement with the provider of the services regardless of whether or not a full tender process has occurred. Includes, but is not limited to: the date of engagement of the service provider, or the most recent date SRF Instructions - 3

4 Investments domiciled Australia Investments domiciled internationally in of review and recommitment to continuing use of the service provider. Represents the total value of investments where the investments have been issued in Australia. Reference: AASB 107, paragraph 6 (issued 11 May 2011). Represents the total value of investments where the investments have been issued outside of Australia. Reference: AASB 107, paragraph 6 (issued 11 May 2011). Transactions with associates Item 2 and item 3 collect information about transactions with associates of the RSE. Transactions may be aggregated in item 2 and item 3 only where they occurred during the same reporting period, and where the counterparty, relationship, and the other characteristics of the transactions are the same. Report each transaction with associates as a separate line in item 2 and item 3. Do not report static investments/liabilities with associates for which there have been no transactions during the reporting period. Income transactions with associates Item 2 collects information about income from transactions with associates by type of relationship and type of income. Item 2 Report all income of the RSE which relates to an associate transaction in item 2. Report the name of the associate in column 1. Report the ABN of the associate in column 2. Report the value of income received from the associate in column 3. Report the type of relationship in column 4. The types of relationship are: RSE licensee, connected entity, joint venture, parent entity, other entity, director, employee/contractor/consultant, director of associate, associate of individual director, associate of individual director (nonassociate of RSE licensee) or other person. If other entity or other person is reported in column 4, report a description of the relationship with that entity or person in column 5. Report the type of income received as securities lending, income associated with underwriting activities, fees and commissions, rebates on costs, commissions and charges or other operating income in column 6. If other operating income is reported in column 6, report a description of the income in column 7. SRF Instructions - 4

5 Securities lending income Income associated with underwriting activities Income from fees and commissions Rebates on costs, commissions and charges Represents income derived by the RSE licensee from the lending of equity securities to other parties. Reference: AASB 118, paragraph 7 (issued 30 April 2007). Represents any income or commission associated with the RSE providing or guaranteeing to underwrite the issue of securities (e.g. equity securities) Represents any fee/cost or commission income associated with any form of investment activities of the entity. Reference: AASB 118, paragraph 7 (issued 30 April 2007). Represents any fee/cost or commission income that has been rebated to the entity associated with any form of investment activities of the entity. Reference: AASB 118, paragraph 7 (issued 30 April 2007). Other income operating Represents operating income not otherwise categorised as securities lending income, income associated with underwriting activities, fees and commissions, and rebates on costs, commissions and charges. Expense transactions with associates Item 3 collects information about expense transactions with associates by type of relationship and type of expense. Item 3 Total investment costs Report all expenses of the RSE which relates to an associate transaction in item 3. Report the name of the associate in column 1. Report the ABN of the associate in column 2. Report the value of the expenses paid to the associate in column 3. Report the type of relationship in column 4. The types of relationship are: RSE licensee, connected entity, joint venture, parent entity, other entity, director, employee/contractor/consultant, director of associate, associate of individual director, associate of individual director (nonassociate of RSE licensee) or other person. If other entity or other person is reported in column 4, report a description of the relationship with that entity or person in column 5. Report the type of expense paid as total investment costs, administration costs, advice costs, compliance costs, distribution costs, overhead costs or other operating costs in column 6. If other operating costs is reported in column 6, report a description of the cost in column 7. Represents total of all costs associated with generating income on investments. SRF Instructions - 5

6 Administration costs Advice costs Compliance costs Distribution costs Overhead costs Represents costs paid or payable by the RSE that relate to the administration or operation of the RSE and includes costs incurred by the RSE licensee for payments to external administrators and in relation to the provision of internal administration services. Represents costs paid or payable for all financial advice to members, where financial advice has the meaning given in the Corporations Act Represents costs paid or payable for regulatory obligations including all external and internal audit services, actuarial services and regulatory levies. Represents costs paid or payable for commissions and platform charges. Represents costs paid or payable for legal services, advertising and marketing, staff salaries, directors/rse licensee services, professional indemnity insurance, information technology (IT) services and equipment, investment research costs and any other operating overhead costs. Other costs operating Represents total investment costs, administration costs, advice costs, compliance costs, distribution costs, overhead costs or other operating costs. Glossary of additional items Roles Accountant Actuary Administrator Approved auditor Represents an accounting firm or individual accounting professional engaged to provide accounting services to the RSE. Excludes: accountants engaged to perform internal audit and external audit services. Represents an actuarial consulting firm or an individual consulting actuary who is engaged to provide actuarial advice to the RSE licensee. Reference: SIS Act, s. 10(1). Represents the person or entity responsible for the day-to-day administration or operation of the RSE, including, but not limited to, keeping records, processing contributions, paying benefits, providing annual benefit statements, liaising with members, processing claims. Represents the auditor engaged by the RSE licensee to perform audit activities in relation to the RSE, as required in Prudential Standard SPS 310 Audit and Related Matters (2012). SRF Instructions - 6

7 Asset consultant Custodian Financial planner Implemented consultant Insurer Insurer - professional indemnity insurance Internal auditor Investment manager Lawyer Promoter Other role Represents a person engaged to provide advice and assistance to devise the investment strategy, select fund managers and monitor investment performance. Excludes: implemented consultants. Represents the person or entity that performs custodial functions in relation to any of the assets of the RSE. Reference: SIS Act, s. 10(1). Represents a person engaged with respect to an RSE to provide personal financial advice within the meaning given in the Corporations Act 2001 to members of that RSE. Represents a person engaged with respect of the RSE to select fund managers and manage the investment of the assets of the RSE. Represents the entity from which the RSE licensee acquires insurance in respect of insured benefits provided to beneficiaries. Reference: Prudential Standard SPS 250 Insurance in Superannuation (2012). Represents the entity that provides professional indemnity insurance (including directors and officers insurance) to the RSE licensee. Represents the internal auditor of the RSE licensee. Reference: Prudential Standard SPS 510 Governance (2012); Prudential Standard SPS 231 Outsourcing (2012). Represents an investment manager within the meaning given in s. 10(1) of the SIS Act. Represents a legal firm or an individual lawyer engaged to provide legal advice to the RSE licensee. Represents a person engaged with respect of the RSE to undertake product design and/or marketing services. Represents roles not otherwise categorised as accountant, actuary, administrator, approved auditor, custodian, insurer professional indemnity insurance, insurer, internal auditor, asset consultant, implemented consultant, investment manager, promoter and lawyer. Relationships RSE licensee Connected entity Represents an RSE licensee within the meaning given in s. 10(1) of the SIS Act. Includes: the RSE licensee of the RSE and other RSE licensees. Represents a connected entity within the meaning given in s. 10(1) of the SIS Act. SRF Instructions - 7

8 Joint venture Parent entity Other entity Director Employee/ contractor/ consultant Director associate of Represents a contractual arrangement of the RSE licensee whereby two or more parties undertake an economic activity that is subject to joint control or joint arrangement (an arrangement of which two or more parties have joint control). Represents the parent entity(s) of the RSE licensee, controlled entities of the parent entity(s) of the RSE licensee and joint ventures or associates of the parent entity(s) of the RSE licensee. Represents an entity not otherwise categorised as RSE licensee, connected entity, joint venture or parent entity. Includes: members of the RSE who are a director of the other entity/business. Represents a director of an RSE licensee, within the meaning given in s. 10(1) of the SIS Act. A reference to a director is, in the case of a group of individual trustees, an individual trustee. Includes: spouses of individual directors. Represents a person or entity who is an employee within the meaning given in s. 15A of the SIS Act or engaged to be a contractor or consultant, of the RSE licensee. Represents a director of an associate of the RSE licensee. Include directors of: the parent entity(s) of the RSE licensee; subsidiaries of the parent entity of the RSE licensee; subsidiaries of the RSE licensee; joint ventures or associates of the RSE licensee; and other associates. Associate of individual director (nonassociate of RSE licensee) Represents an entity that is an associate, within the meaning given in SIS Act, s. 12 of a director of an RSE licensee, but is not otherwise an associate of the RSE licensee itself. Other person Represents a person not otherwise categorised as director, employee/contractor/consultant, director of associate, associate of individual director and associate of individual director (non-associate of RSE licensee). SRF Instructions - 8