ASFA supports super portfolio disclosure regulations

The Association of Superannuation Funds of Australia (ASFA) have supported the Government’s changes to superannuation portfolio holdings disclosure regulations.

Under the regulations, super funds would be required to first report their holdings by 31 March, 2022, with portfolio holdings disclosure to occur every six months thereafter.

The minister for financial services, superannuation and the digital economy, Senator Jane Hume, said the Government would monitor these disclosures and consider further refinements where necessary.

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“While undertaking consultation on this measure, it has become apparent that some superannuation funds have large exposures to derivatives,” Hume said.

“Given Australia’s superannuation funds have now become a systemically important part of our financial system, it is timely to ensure policymakers and regulators have a sound understanding of the extent and nature of the use of derivatives, and any implications for the operation of our financial system that could arise from these exposures.

“The Treasurer has therefore asked the Council of Financial Regulators (CFR) to prepare a report on this matter, drawing upon the information gathering powers of the Australian Prudential Regulation Authority and the input of relevant experts from across the CFR, including the Reserve Bank of Australia.”

ASFA said the changes would achieve greater transparency for consumers whilst recognising the potential effect on investment outcomes.

ASFA chief executive, Martin Fahy, said: "ASFA supports the objective of increased transparency of superannuation for consumers, however, we have long advocated that it was important that this be done in the best interests of fund members.

"The regulations released today enhance transparency to consumers while recognising the importance of investment considerations around disclosure, to ensure that Australian super funds continue to be able to deliver great investment returns for their members."

The association said it was significant that the regulations provided for the disclosure of unlisted assets and some disclosure of derivatives to be aggregated for each type of asset.

"ASFA has advocated that the holding valuation of unlisted assets should be disclosed as a range or bundled with similar assets, and we are pleased to see the Government has recognised this," Fahy said.

“This will help ensure that Australian super funds can continue to compete on an even footing in global institutional investment markets.”

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The government has again weakened, allowing the funds to not disclose valuations processes on unlisted assets, instead talking about derivatives exposure - equally important - but a deal has been done on unlisted assets - I suspect because real valuations today may actually cause a panic sell in some funds - i.e. the risk of exposing these now is too great because it would create greater systemic risk.

Should have been a requirement long ago and so good on the Federal Government for making this happen.

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