Financial Sector (Collection of Data) (reporting standard) determination No. 45 of 2023

Reporting Standard SRS 705.0 Components of net return

Financial Sector (Collection of Data) Act 2001

I, Michael Murphy, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:

(a)   revoke Financial Sector (Collection of Data) (reporting standard) determination No. 20 of 2021, including Reporting Standard SRS 705.0 Components of net return made under that Determination; and

(b)          determine Reporting Standard SRS 705.0 Components of net return, in the form set out in the Schedule, which applies to the financial sector entities to the extent provided in paragraph 3 of the reporting standard.

Under section 15 of the Act, I declare that the reporting standard shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on the day it is registered on the Federal Register of Legislation.

This instrument commences upon registration on the Federal Register of Legislation.

Dated: 23 May 2023

Michael Murphy

Acting Chief Data Officer

Technology and Data Division

Interpretation

In this Determination:

APRA means the Australian Prudential Regulation Authority.

Federal Register of Legislation means the register established under section 15A of the Legislation Act 2003.

financial sector entity has the meaning given by section 5 of the Act.

Schedule

Reporting Standard SRS 705.0 Components of net return comprises the document commencing on the following page.

Reporting Standard SRS 705.0

Components of Net Return

Authority

1. This Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001.

Purpose

2.             Information collected under this Reporting Standard is used by APRA for the purposes of prudential supervision and publication. It may also be used by the Australian Securities and Investments Commission.

Application

3.             This Reporting Standard applies to each registrable superannuation entity (RSE) licensee (RSE licensee) in respect of each RSE, defined benefit RSE and eligible rollover fund (ERF) within its business operations[1].

Commencement

4.             This Reporting Standard applies to reporting periods ending on or after 30 June 2023.

Reporting periods

5.             Reporting periods under this Reporting Standard are:

(a)     each calendar quarter (i.e. the periods ending 30 September, 31 December, 31 March and 30 June each year); and

(b)     each year ending 30 June.

Information required

6.             RSE licensees must provide information required under this Reporting Standard for each reporting period ending on or after 30 September 2023.

7.             For the reporting period under paragraph 5(a), an RSE licensee to which this Reporting Standard applies must provide the information required by paragraph 6, within 28 days after the end of the relevant reporting period.

8.             For the reporting period under paragraph 5(b), an RSE licensee to which this Reporting Standard applies must provide the information required by paragraph 6, within 3 months after the end of the relevant reporting period.

Notices

9.             If, having regard to the particular circumstances of an RSE, defined benefit RSE or ERF, APRA considers it necessary or desirable to obtain information more or less frequently than as provided by paragraph 5, APRA may, by notice in writing, change the reporting periods for the particular RSE, defined benefit RSE or ERF.

10.         Where APRA has changed the reporting periods under paragraph 9, the RSE licensee must provide the relevant information within the time specified by the notice in writing.

11.         APRA may grant, in writing, an RSE licensee an extension of a due date with respect to one or more RSEs, defined benefit RSEs or ERFs within its business operations, in which case the new due date for the provision of the information will be the due date specified on the notice of extension.

Note: For the avoidance of doubt, if the due date for a particular reporting period falls on a day other than a usual business day, an RSE licensee is nonetheless required to submit the information required no later than the due date.

Form and method of submission

12.         The information required by this Reporting Standard must be given to APRA in electronic format using an electronic method available on APRA’s website or by a method notified by APRA prior to submission.

Quality control

13.         The information provided by an RSE licensee under this Reporting Standard must be the product of systems, procedures and internal controls that have been reviewed and tested by the RSE auditor of the RSE, defined benefit RSE or ERF to which the information relates[2]. This will require the RSE auditor to review and test the RSE licensee’s systems, procedures and internal controls designed to enable the RSE licensee to report reliable information to APRA. This review and testing must be done on:

(a)          an annual basis or more frequently if necessary to enable the RSE auditor to form an opinion on the reliability and accuracy of information; and

(b)          at least a limited assurance engagement consistent with professional standards and guidance notes issued by the Auditing and Assurance Standards Board as may be amended from time to time, to the extent that they are not inconsistent with the requirements of Prudential Standard SPS 310 Audit and Related Matters (SPS 310).

14.         All information provided by an RSE licensee under this Reporting Standard must be subject to systems, processes and controls developed by the RSE licensee for the internal review and authorisation of that information. It is the responsibility of the Board and senior management of the RSE licensee to ensure that an appropriate set of policies, procedures and controls for the authorisation of information submitted to APRA is in place.

Authorisation

15.         When an officer or agent of an RSE licensee provides the information required by this Reporting Standard using an electronic format, the officer or agent must digitally sign the relevant information using a digital certificate acceptable to APRA.

16.         If the information required by this Reporting Standard is provided by an agent who submits the information on the RSE licensee’s behalf, the RSE licensee must:

(a)          obtain from the agent a copy of the completed form with the information provided to APRA; and

(b)          retain the completed copy.

17.         An officer or agent of an RSE licensee who submits the information under this Reporting Standard for, or on behalf of, the RSE licensee must be authorised by either:

(a)          the Chief Executive Officer of the RSE licensee; or

(b)          the Chief Financial Officer of the RSE licensee.

Minor alterations to forms and instructions

18.         APRA may make minor variations to:

(a)          a form that is part of this Reporting Standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or

(b)          the instructions to a form, to clarify their application to the form,

without changing any substantive requirement in the form or instructions.

19.         If APRA makes such a variation, it must notify each RSE licensee that is required to report under this Reporting Standard.

Transition

20.         An RSE licensee to which this Reporting Standard applies must report under the old reporting standard in respect of a transitional reporting period. For these purposes:

old reporting standard means the reporting standard revoked in the determination making this Reporting Standard; and

transitional reporting period means a reporting period under the old reporting standard:

(a)          that ended before 30 September 2023; and

(b)          in relation to which the RSE licensee was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.

Note: For the avoidance of doubt, if an RSE licensee was required to report under an old reporting standard, and the reporting documents were due before the date of revocation of the old reporting standard, the RSE licensee is still required to provide any overdue reporting documents in accordance with the old reporting standard

Interpretation

21.         In this Reporting Standard:

APRA means the Australian Prudential Regulation Authority established under the Australian Prudential Regulation Authority Act 1998.

Chief Executive Officer means the chief executive officer of the RSE licensee, by whatever name called, and whether or not he or she is a member of the Board of the RSE licensee[3].

Chief Financial Officer means the chief financial officer of the RSE licensee, by whatever name called.

defined benefit RSE has the meaning of defined benefit fund in subsection 10(1) of the SIS Act.

due date means the relevant due date under paragraph  7, 8 or, if applicable, paragraph 11 of this Reporting Standard.

eligible rollover fund (ERF) has the meaning given in subsection 10(1) of the SIS Act.

investment menu has the meaning given in SRS 101.0.

investment option has the meaning given in SRS 101.0.

an investment pathway is provided by a superannuation product, or an investment menu, to an investment option, if it is possible for a member to invest in the investment option through that superannuation product or investment menu.  

MySuper product has the meaning given in subsection 10(1) of the SIS Act.

reporting period means a period mentioned in paragraph 5 or, if applicable, paragraph 9 of this Reporting Standard.

RSE means a registrable superannuation entity as defined in subsection 10(1) of the SIS Act that is not a defined benefit RSE, pooled superannuation trust, ERF, small APRA fund or single member approved deposit fund[4].

RSE auditor means an auditor appointed by the RSE licensee to perform functions under this Reporting Standard.

RSE licensee has the meaning given in subsection 10(1) of the SIS Act.

SIS Act means Superannuation Industry (Supervision) Act 1993.

superannuation product has the meaning given in SRS 101.0.

22.         In this Reporting Standard, unless the contrary intention appears, a reference to an Act, Regulation, Prudential Standard, Reporting Standard, Australian Accounting Standard or Auditing Standard is a reference to the instrument as in force or existing from time to time.

23.         Where this Reporting Standard provides for APRA to exercise a power or discretion, this power or discretion is to be exercised in writing.

Reporting Form SRF 705.0

Components of Net Return

Instruction Guide

This instruction guide is designed to assist in the completion of Reporting Form SRF 705.0 Components of Net Return (SRF 705.0). This form collects information on the components of net return for investment options.

General directions and notes

Reporting level

SRF 705.0 must be completed for each registrable superannuation entity (RSE), defined benefit RSE and eligible rollover fund (ERF).

Reporting tables

Tables described in this reporting form list each of the data fields required to be reported. The data fields are listed sequentially in the column order that they will appear in the reported data set. Constraints on the data that can be reported for each field have also been provided.

The Unique identifier column indicates which field or fields form the primary key of the table. Where a field has ‘Y’ in the Unique identifier column, this denotes that this field forms part of the primary key for the table. A blank cell in the Unique identifier column means that the field does not form part of the primary key for the table. Any specific combination of values in the fields that form the primary key of a table must not appear on more than one row in that table when reported.

Reporting basis and unit of measurement

Amounts in SRF 705.0 are to be reported as whole dollars, dollars and cents on a per member basis or percentages. Percentages are to be reported as an unconverted number to four decimal places as specified. For example, 12.3456 per cent is to be reported as 0.123456.

Do not report in accordance with the Australian Accounting Standards when reporting in respect of each calendar quarter.

Whilst the information reported in respect of each calendar quarter is not required to be reported in accordance with the Australian Accounting Standards, an RSE licensee must ensure that the information reported in respect of the end of each quarter is the most accurate information the RSE licensee has available by the due date. This may, for example, include some fee and cost information provided to the RSE licensee after the end of the quarter. An RSE licensee will comply with the requirement to report the most accurate information available to it by the due date if they report the unit price or crediting rate as at the reporting date. Where the unit price or crediting rate has been required to be revised in accordance with the RSE licensee’s unit pricing or crediting rate policies, the RSE licensee must report that revised price or rate.

Where an RSE licensee is reporting in respect of an annual period ending 30 June, the valuation of any accrued amount must be undertaken in accordance with the Australian Accounting Standards. This means that an RSE licensee must report items on SRF 705.0 in respect of an annual period ending 30 June based on ‘hard close’ valuations, not ‘soft close’ valuations.

Items in SRF 705.0 must be reported as at the end of the reporting period, or with respect to transactions that occurred during the reporting period as specified.

Definitions

Terms highlighted in bold italics indicate that the definition is provided in Reporting Standard SRS 101.0 Definitions for Superannuation Data Collections (SRS 101.0).

All references to Schedule 10 of the Corporations Regulations 2001 in these instructions are references to that Schedule as modified by the ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 as in force or existing from time to time.

Specific instructions

Sign of numbers in reporting

Fees, costs and taxes would typically reduce a member’s balance. However, for the purpose of SRF 705.0 they should be reported as a positive number. If a fee, cost or tax is rebated and therefore works to increase a member’s balance, this should be reported as a negative number.

For example, when reporting an administration fee of $120.00 for the year ending 30 June, if the RSE licensee subsequently received a tax rebate in relation to the administration fee, and the rebate was passed back to members, this should be reported as tax of -$18.00 (for example).

No adjustment in sign is needed in reporting investment returns.

Attribution of data to superannuation product, investment menu or investment option

SRF 705.0 must be completed in respect of each superannuation product, investment menu and investment option (RSE structure level) offered by the RSE during the reporting period excluding the following:

• investment options which are permitted to be aggregated in Table 3 of Reporting Form SRF 605.0 RSE Structure (SRF 605.0);
• investment options which solely underlie defined benefits;
• investment options which are reported on SRF 605.0 under investment option category Annuity;
• products which are reported on SRF 605.0 under the Superannuation Product Category Type of ‘Insurance Only’ or ‘Whole of Life or Endowment’; and

• investment options which solely underlie products with the Superannuation Product Category Type of ‘Insurance Only’ or ‘Whole of Life or Endowment’.

The reporting period is each year ending 30 June for the following:

• investment options which are reported on SRF 605.0 with the Investment Option Type of ‘Listed Investment Company’,
• investment options which are reported on SRF 605.0 with the Investment Option Type of 'Exchange Traded Product’, and
• investment options which are reported on SRF 605.0 with the Investment Option Management Type of 'externally managed - non-connected entity’ and Investment Option Strategy Type of ' Non-connected entity’

Report fees, costs and taxes for the superannuation product, investment menu, investment option at which they arise or are incurred.

RSE licensees need to determine the appropriate reporting level for each of the applicable fees, costs and taxes depending on the structure of the RSE, defined benefit RSE and ERF.

Fees, costs and taxes may be incurred at each RSE structure level, but may vary depending on the combination of RSE structure levels a member is in.

For example, it is expected that administration fees will generally be reported at a superannuation product level, platform fees may sometimes be reported at the investment menu level, while investment management fees will generally be reported at the investment option level. The investment management fee for an investment option may vary depending on which superannuation product the member is invested through.

Where the fee, cost or tax is applicable to all members in the RSE structure level, the RSE licensee must report data for that RSE structure level and report ‘ALL’ for the remaining RSE structure levels.

Where the fee, cost or tax varies depending on the combination of RSE structure levels, the RSE licensee must report data for each relevant combination of superannuation product, investment menu and investment option.

For example, an administration fee that applies across all investment menus and investment options within a superannuation product would be identified with the relevant superannuation product identifier to which it applies. The investment menu identifier and investment option identifier would be reported as ‘ALL’.

SRF 705.0 requires the RSE licensee to report investment returns for each investment option.

Report the Gross investment return for all investment options on the annual return.

Report the indirect cost (non-RSE licensee) on the annual return for all investment options.

The Gross Investment Return less all reported fees, costs and taxes must equal the Net Investment Return as reported on 705.1.

Where the return is applicable to all members in the investment option, the RSE licensee must report data for that investment option and report ‘ALL’ for the remaining RSE structure levels.

Where the return varies dependent on the superannuation product and/or investment menu, the RSE licensee must report data for each relevant combination of superannuation product, investment menu and investment option.

Where the investment option type is Separately Managed Account or Managed Discretionary Account, report the investment return of the model portfolio.

Table 1: Components of net return

For each investment option that was available to members for part or all of the reporting period, report the components of net return as described in the table below.  Where the components differ by superannuation product, investment menu or fees and costs arrangement this should be indicated by use of the appropriate identifier in these fields, otherwise make use of ‘ALL’ as described above.

[1] For the purposes of this Reporting Standard, an RSE licensee’s ‘business operations’ includes all activities it conducts as an RSE licensee (including the activities of each RSE of which it is the licensee), and all other activities of the RSE licensee to the extent that they are relevant to, or may impact on, its activities as an RSE licensee. For the avoidance of doubt, if the RSE licensee is trustee of more than one RSE, defined benefit RSE or ERF, the RSE licensee must separately provide the information required by this Reporting Standard for each RSE, defined benefit RSE or ERF within its business operations. An RSE licensee that does not have any RSEs, defined benefit RSEs or ERFs within its business operations is not required to provide information under this Reporting Standard.

[2] Refer also to Prudential Standard SPS 310 Audit and Related Matters (SPS 310). 

[3] Refer to Prudential Standard SPS 510 Governance.

[4] For the purposes of this Reporting Standard, ‘pooled superannuation trust’ has the meaning given in subsection 10(1) of the SIS Act, ‘small APRA fund’ means a superannuation entity that is a regulated superannuation fund, within the meaning of the SIS Act, which has no more than six members and ‘single member approved deposit fund’ means a superannuation entity that is an approved deposit fund, within the meaning of the SIS Act, which has only one member