The Association of Superannuation Funds of Australia (ASFA) has called for the Australian Securities and Investments Commission (ASIC) to adopt a clearer approach to its consultation, supervision and enforcement of the superannuation sector.
ASFA also called on ASIC to adopt a more collaborative approach, such as the prudential stance adopted by the Australian Prudential Regulation Authority (APRA), instead of the current approach of seeking rectification or enforcement after a regulatory breach has occurred.
ASFA’s comments were made as part of its submission to the Senate Standing Committee on Economics into the performance of ASIC. ASFA also stated that the regulator’s interaction with the superannuation industry was confined to registration, reporting and enforcement.
As a result of this limited engagement and post-event enforcement approach, ASFA claimed that “ASIC’s substantial powers appear to act as a disincentive to establishing collaborative relationships with industry”.
“Given the degree of legislative change for Australian Financial Services and Australian Credit licensees, it would be helpful for licensees to have regular contact with an ASIC team akin to the APRA model for Registrable Superannuation Entities.”
ASFA said the different regulatory approaches between ASIC and APRA reflect that the latter is a prudential regulator – but ASIC would be more effective and efficient by introducing specialised staff instead of allocating them to issues in its current “first cab off the rank” approach.
While calling for greater collaboration with the superannuation industry, ASFA stated that ASIC should be functionally separated from Superannuation Complaints Tribunal (SCT), with the latter established as a body in its own right.
ASFA said the role of the SCT to determine claims or disputes was that of an independent tribunal with a judicial function and not an administrative or regulatory one. It said “a hallmark of tribunals is that they should operate, and importantly be perceived by consumers to be operating, on a truly independent, quasi-judicial basis”.
