There is a false myth surrounding self-managed superannuation funds (SMSFs) in that they remain unregulated simply because they do not fall under the umbrella of the Australian Prudential Regulation Authority (APRA).
That was the argument from the SMSF Association, which argued that the unregulated or "lack of regulation" myth continued to linger despite the sector receiving a clean bill of health from the findings of both the Cooper and Murray inquiries.
SMSF Association head of policy, Jordan George, said both inquiries found there were no systemic issues jeopardising the stability of the sector, barring David Murray's recommendation to ban limited recourse borrowing arrangements (LRBAs) in the Financial System Inquiry (FSI).
"As SMSF trustees and their specialist advisers well know, the SMSF sector is rigorously regulated by two key Government agencies: the Australian Taxation Office (ATO), which administers the relevant superannuation laws for SMSFs, and the Australian Securities and Investments Commission (ASIC), which regulates financial services to protect consumers and registers SMSF auditors," he said.
The ATO's role included checking that funds were compliant with superannuation laws, ensure the fund's main purpose was to fund retirement, taking enforcement action when laws were breached, and ensuring auditors performed their duties according to set standards. George said it was a very effective regulator.
"The evidence for this is the high compliance rate among SMSFs, with 98 per cent of funds annually meeting their obligations under the superannuation laws."
ASIC's role included ensuring all SMSF auditors were registered, and held tertiary accounting qualifications or equivalent, met a fit and proper test, and held professional indemnity insurance.