The Australian Prudential Regulation Authority (APRA) is encouraging trustees to apply early for licences under the Superannuation Safety Amendment Act 2004 by assuring them it will not move the goal-post during the transition period, which ends on July 1, 2006.
Additionally APRA deputy chairman Ross Jones, in seeking to avoid a bottle-neck of applications in early 2006, is warning trustees that the peak regulator will reserve the right to refuse any application for a Registrable Superannuation Entity (RSE) licence at any time during the final six months of the transition period.
APRA’s assurance to trustees that the criteria used in the application process will not alter to accommodate any new operating standards or revisions to existing standards, provides no incentive in delaying their applications until the end of the transition period.
“It is in the best interests of trustees and the members of the entities under their trusteeship to consider making an early application,” Jones says.
According to Jones, being granted an early licence will also provide trustees with a competitive advantage under the impending choice of super regime.
“For the purposes of superannuation safety, fund members are more likely to choose a registered fund managed by a trustee that has already been granted its licence,” he says.
Meanwhile the Association of Superannuation Funds of Australia (ASFA) last week warned APRA that the recently-gazetted licensing fees to be paid by trustees may act as a barrier to entry for many superannuation funds.
“To remain in operation, a superannuation fund will be required to pay a one-off licensing fee to APRA of between $20,000 and $3,500 depending on the size and status of the trustee… [and] our members are deeply concerned about these fees,” ASFA chief executive Philippa Smith says.
Under reforms to the prudential framework for superannuation introduced under the Superannuation Safety Amendment Act 2004 on 1 July this year, all trustees are required to obtain a licence and register their RSE with APRA by June 30, 2006.
“There are serious penalties for operating without a RSE licence and/or for operating a RSE that has not been registered after that date,” Jones warns.
