The Australian Prudential Regulation Authority (APRA) has chosen to portray its failed action against IOOF Limited and five of its senior officers as a test case which has served to clarify conflicts of interest.
Hours after suffering the legal defeat in the Federal Court on Friday, APRA deputy chair, Helen Rowell, admitted the regulator was disappointed by the decision but said the case had served to examine “a range of legal questions relating to superannuation law and regulation that had not previously been test ed in court”.
“Litigation outcomes are inherently unpredictable, however APRA remains prepared to launch court action – where appropriate – when entities breach the law or fail to act in an open and cooperative manner,” her statement said.
“APRA still believes this was an important case to pursue given the nature, seriousness and number of potential contraventions APRA had identified with IOOF.”
Rowell also noted that additional licence conditions that APRA had imposed on IOOF in December were unaffected by the judgement and remained in force.
“APRA has seen significant improvement in the level of cooperation from IOOF since this case was launched. Additionally, the new licence conditions have enhanced IOOF’s organisational structure and governance, including the role and independence of the trustee board within the IOOF group. This will better support effective identification and management of future conflicts of interest,” her statement said.
The APRA action, launched in the immediate wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is estimated to have cost APRA several million dollars in circumstances where costs were awarded against the regulator.