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The decision by the Australian Prudential Regulation Authority (APRA) to rank superannuation funds on the basis of investment performance is “silly”, according to Lynn Ralph, managing director of independent corporate governance ratings agency Cameron Ralph.
“I’m really sceptical about APRA having this silly register of super funds — as if anyone is going to get on the APRA website, and then change their super fund.
“If people can barely get people to go on a fuel watch site or a grocery prices website then it’s unlikely they will get on some website that measures super fund returns.”
Ralph made the statements during a presentation entitled ‘The Next Wave of Regulation’, delivered at an Institution of Certified Management Accountants (ICMA Australia) function on Friday.
She anticipated that the international regulatory effort in the financial services sector would shift away from its emphasis on disclosure over the past decade.
“There has been this philosophy among regulators around the globe that disclosure is sufficient for organisations such as investment managers to be accountable.
“However, increasingly everybody is realising disclosure is just not working, that it cannot be the only tool we are going to have to have in our (regulatory) kitbag.”
There are going to be “a couple of new regulatory focuses” post the GFC, she said, including greater regulatory attempts to “look at institutions and their integrity”.
“I think we are going to have to get a lot more focus on how the boards of directors of institutions are actually going about doing their risk assessment.”
Another regulatory focus will be on the impact of competition on institutions, and an appropriate competition policy in financial services, she said.
“A lot of people are realising that intense competition does drive organisations to push their business model often beyond their limits of stability from a financial sense.”
