The Australian Prudential Regulation Authority (APRA) did not pick up on fees for no service in relation to superannuation funds because it did not go deep enough, according to APRA chairman, Wayne Byres.
Giving testimony to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Byres admitted that there were limits to the supervision undertaken by APRA in terms of looking at the detail of transactions and that it was reliant on the institutions themselves for that detail.
Asked what he believed the fee for no service issue had revealed about the superannuation industry, Byres said he believed it revealed that institutions were slow to identify issues and were not alert to them becoming broader systemic issues.
Commissioner Kenneth Hayne questioned why institutions would not have been more aware of what he described as straight forward transactions – “money in – money out” noting that the industry was now talking in terms of hundreds of millions of dollars in remediation.
Elswhere in his testimony, Byres explained why APRA would not necessarily seek to investigate a breach side-by-side with the Australian Securities and Investments Commission (ASIC) citing the experience of Trio Astarra.
He said that when both APRA and ASIC had sought to investigate Trio Astarra at the same time, the process had become clumsy.
