DRAFT

Governance Framework

Context

Purpose

This document describes theproposed framework for the governance of the Superannuation Transactions Network (STN).

This will be used to inform candidates who are interested in assuming the role of the Gateway Network Governance Body (GNGB) of possible structures. Once a preferred candidate is identified, the ATO will work with them to ensure the framework is a suitable structure and it will form the basis for the establishment of the finalised Governance Framework.

Background

Gateway operators have established a network to facilitate the transfer of electronic data messages compliant with the SuperStream Data and Payment Standard (the Standard).

On 21 February 2014, the Assistant Treasurer announced that the ATO will take on stewardship of the STN provide clarity and certainty to gateway operators and other members of the superannuation industry regarding the network’s operations.

As part of the Government announcement, the ATO was also charged to work with industry to facilitate the development of a long term governance framework. The ATO will put in place the required administrative framework to allow for a smooth transition to self-regulation, which will occur by the second quarter of 2016.

We have commenced design on the future Governance Framework.

The Gateway Operators Group (GOG)isa direct stakeholder and will be a key group that the ATO will consult with on this design. The SuperStream Reference Group (SSRG) represents a broad cross-section of SuperStream stakeholders and will provide advice to the ATO on the final shape of the governance framework and the fitness or otherwise of potential candidates to perform the agreed governance role.

1Principles in developing the Governance Framework

What are the principles to be followed when developing a Governance Framework?

Gateway operators are commercial entities who need to act in the best interest of their clients and owners/shareholders

Gateway Operators need to be bound together in an agreed collaborative venture comprising the ‘gateway network’, but they cannot be self-governing without raising possible issues of conflict of interest and anti-competitive behaviour

What ‘third party’ – independent of government – could act as the governing authority in relation to the gateway operators’ network?

How are wider stakeholder groups, including funds, employers and members, represented or their interests maintained?

A framework needs to be low cost and practical while being effective in getting the right outcomes and managing risks

Any framework needs to beflexible enough to adapt to future needs

Scope is defined (e.g. message handling is in scope, value added services and client -gateway operator commercial arrangements are out of scope).

Discussion Points

  • Are theseprinciples appropriate?
  • Are there any other additional principles?

2Governance Framework

Proposed Governance Structure with primary stakeholders

3Roles in the Governance Framework

Role of the GNGB

The GNGB would be an appropriately structured entity with a clear mission to:

  • maintain the integrity of the STN gateway network in accordance with the intended role of gateways within the SuperStream Data and Payment Standard
  • ensure oversight of the network and its operators, consistent with the data standards and good governance practices
  • provide rules of engagement with the network, including entry and exit of gateway operators and access principles
  • encourage continuous improvement and innovation.

The GNBG would be expected to be a counter-party to one or more common agreements with each network operator.

This role might be exercised by a special purpose body created for this sole function; or alternatively, this might be a function exercised within an existing legal entity.

It is expected that the GNGB would include a committee or board that would provide direct oversight of the STN Gateway Operators.

Role of the GOG

The GOG is responsible for ensuring the rules of collaboration and engagement between network operators are well understood and to provide a regular forum for issue management(beyond bilateral issue resolution).

Role of other parties

Depending on the legal and voting structure of the GNGB, there will need to be complementary forums and channels for guaranteeing the views of other key stakeholder groups are taken into account. This may include:

Employers

Payroll providers

Clearing houses

Super funds

Administrators

Superannuation Industry Associations

SuperStream Standards Technical Committee (SSTC)

The SSTC provides advice and recommendations to the ATO on matters of technical and architectural significance to the implementation, maintenance and change of theSuperannuation Data and Payment Standards (the Standard). The GOGor GNGB would refer matters to the SSTC when appropriate.

Customer Reference Group

The Customer Reference Group allows the GNGB and gateway operators to access a wider source of information, perspectives and potential solutions. It helps them better understand the impact of their decisions, constraints and opportunities. This group should consist of members with a broad stakeholder representation and be able to raise issues and make recommendations to the GNGB/GOG for consideration.

4GNGB functions

Typical functions would include:

chairs and provides secretariat support to GOG meetings

undertakes agreed communications and public relations activities (on behalf of network as a whole)

publishes performance reporting and other transparency related information

sets certification standards (where required)

oversees entry and exits to network

acts as an escalation point for issues relating to the data standardsfacilitates dispute resolution (either directly or through agreed dispute settlement arrangements)

plays BCP coordination role (high level contingencies only)

applies notices and sanctions

collects revenue and maintains accounts in accordance with charter and role.

This is a broadoutline only – not necessarily exclusive - and subject to further detailed design and negotiation with the GNGB and GOG members.

5Appointing the GNGB

An Expression of Interest is currently open with a closure date of March 2015. This will be outlined in further detail in theGNGB Design Engagement Plan paper.

6GOG – Aims and Objectives

What are the aims and objectives of the GOG?

Establish common practices for Gateway Operators

STN Efficiency

STN Reliability and Integrity

STN Security

Manage STN risk

Promote innovative solutions

Discussion Points

  • Are these aims and objectives appropriate?
  • Are there any other additional aims and objectives?

7Meetings

GNGB

The GNGB will hold regular meeting internally and an annual meeting with all STN Gateway Operators.

GOG

The GOGwill hold regular meetings on a monthly basis to discuss operational business and emerging issues. The regularity of this meeting can be adjusted at the discretion of the GOG.

Members of the GOGcan call an additional special meeting at any time if required.

Location and times of meetings will be set by the GOG.

8Consultation

Consultation is required prior to any decisions that may affect stakeholders external to the STN.

Consultation allows the group to access a wider source of information, points of view and potential solutions. It ensures that the group better understands the issue, related constraints and opportunities that exist.

The level of consultation undertaken should relate directly to the nature and complexity of the issue and its’ impact on external stakeholders.

Stakeholders could include:

Employers

Payroll providers

Clearing houses

Super funds

Administrators

Software developers

Superannuation Industry Associations

A customer reference group will be established to provide an avenue forum for consultation with these stakeholders.

Discussion/Decision Points

  • What are the circumstances where consultation is required?
  • Are other channels required for consultation?
  • E-mail?
  • Newsletter?
  • Meetings?

9Future papers

A number of topics are not covered in this initial design of the Governance Frameworkas they will be developed separately:

  • Business continuity plan
  • Performance reporting
  • IT Security
  • Entry arrangements
  • Exit arrangements
  • Sanctions
  • Incident reporting and problem resolution
  • Dispute resolution
  • Change management process
  • Membership levels and rights
  • Committee positions
  • GOG funding
  • Voting

Page | 1