Offshoring of investment management decisions should be treated differently to other offshoring arrangements, the Association of Superannuation Funds of Australia (ASFA) has said in a submission to Treasury.
Responding to the second set of draft prudential standards for superannuation, ASFA said it understood the requirement for trustees to consult with the Australian Prudential Regulation Authority (APRA) with respect to other offshoring arrangements such as administration, but said trustees needed the ability to switch investments quickly.
"Prior consultation with APRA in each and every instance would be unduly onerous for RSA licensees and a significant impediment to them being able to invest effectively and efficiently," it said.
ASFA said it should be adequate that APRA review a super fund's risk management framework with respect to off-shoring investment management agreements prior to its first offshore investment, but not with each and every decision.
The industry organisation also sought clarification on the process around consultations, and also with regard to reporting offshoring arrangements.
ASFA said members had also reported apparent discrepancies with regards to APRA's view of a proposed outsourcing arrangement as a material business activity.
"In one example, advice from ASFA members reveals a difference in approach between APRA's Melbourne, Brisbane and Sydney offices as to whether the selection of a Gateway service provider is considered to be the outsourcing of a material business activity," it said.
It requested APRA clarify what constitutes a material business activity.
The central bank has served up a disappointment for punters on Melbourne Cup Day.
The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones.
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.