The Government is considering removing the exclusions on its Electronic Transactions Act (ETA) 1999 that affect the Corporate Regulations Act 2001 and Superannuation Industry Supervision (SIS) Act 1993. This will enable electronic signatures and records to be stored in electronic form, reducing the administrative load on SMSFs.
In line with its Deregulation Agenda, the Government consultation on modernising business communications aims to improve the technology neutrality of Treasury laws to reduce costs and offer more flexibility with digital engagement.
For example, a binding death nomination is exempt from the ETA and can only be completed with a physical signature. Also exempt from the ETA are the record of decisions and minutes for the storage of some assets under SMSFs, such as artwork, jewellery, and antiques. Currently, only a physical record can satisfy regulatory requirements and to add to the administrative burden, these physical records need to be retained for 10 years.
Removing the exclusions could allow alternative forms of identity verification and agreement, easing the regulatory load in both circumstances. Notably, any electric method of signature much provide an equally reliable indication of identity and the individual or business must consent to the use of the method to verify their identity. Alternative forms of record keeping must be readily accessible and keep the information in a substantively complete and unaltered form over the required period.
Draft legislation released on 19 October 2020 seek to improve the technology neutrality of the Corporations Act 2001 by allowing businesses to execute documents electronically and satisfy regulatory requirements relating to meetings of directors, shareholders, and members of registered schemes with technology.
Deregulation to offer more flexibility with the use of technology has been accelerated by the COVID-19 pandemic and such changes are necessary to support Australia’s economic recovery.
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