A number of superannuation funds are facing the prospect of legal action being initiated by the Australian Prudential Regulation Authority (APRA) on the basis of referrals from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
What is more, that action could be initiated as early as next month.
APRA has revealed to a Parliamentary Committee that most of the referrals made to it from the Royal Commission are in the superannuation space but did not specify which funds or firms were involved.
Under questioning before the House of Representatives Standing Committee on Economics, APRA deputy chair, Helen Rowell noted that the regulator had initiated action against IOOF and that it had issued directions and imposed licence conditions on both IOOF and AMP Limited.
However, she said that APRA had a number of other enforcement activities in train.
In particular, the Royal Commission referrals are being closely examined, and we are well progressed in doing that. Most of those are in the superannuation space. I can't give you the precise numbers of those different categories of enforcement type activities, but certainly over the last 12 to 18 months there has been a significant increase.
Later, APRA’s other deputy chairman, John Lonsdale said that the regulator had 12 referrals that it had been put to it by the Royal Commission and that it had sought external legal advice about whether or not a case existed which could be taken to court.
“We're expecting the bulk of those 12 to be assessed in the sense of coming to a view on whether we could go forward with a case around September, certainly before the end of the year, but most of them, I think, by around September. Then, if there is a case, we will move forward with that,” he said.
However, Lonsdale also noted that, in a number of instances, the issues referred by the Royal Commission carried no penalty.