APRA offers super licensing guidelines
TheAustralian Prudential Regulation Authority(APRA) is ramping up efforts to ensure superannuation trustees comply with the new superannuation licensing regime due to come into effect on July 1 with the release of guidelines on trustee and fund licensing and registration.
Under the new licensing regime, existing trustees will have two years to become licenced and register eligible superannuation funds whole new trustees must be licenced and superannuation funds registered from the start of July to be able to accept contributions.
The reforms have been made as changes to the Superannuation Industry (Supervision) Act 1993 and trustees must comply with a range of prudential measures covering resources and risk management as well as meeting standards of fitness and propriety.
Other changes also set to come into effect from July include measures which allow member benefits to be transferred from funds that either fail the licensing requirements or which choose not to comply.
The guidelines released by APRA is a range of explanatory materials on applying for the licence and registrations with the regulator to hold a series of workshops on the licencing issue for trustees around the country from August.
APRA deputy chair Ross Jones says the regulator urges trustees to review their status and seek guidance from APRA early in the transition period and follows earlier comments from the regulator that it would take a prescriptive approach if trustees failed to comply.
APRA diversified institutions general manager S.G. Venkatramani told a Sydney conference two weeks ago APRA was particularly concerned with respect to the issue of losses through inappropriate related party conduct or fee arrangements.
He says the interaction of fiduciary responsibilities on the one hand and the profit motive on the other is not always easy to reconcile and that APRA accepts that a large number of ‘for profit’ funds have succeeded in looking after their members’ best interests.
“However the evidence of poorly disclosed fee structures, successive layers of related party service providers and significant differential in performance figures raises concerns about members’ interests being assigned a somewhat lower importance than the law mandates,” Venkatramani says.
He says APRA expects to work with its fellow regulators and the industry to agree minimum requirements and in addition, seek best practice.
AUTHOR
Jason Spits
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