POWERED BY MOMENTUM MEDIA
ASIC review finds compliance gaps by super trustees
A review by the Australian Securities and Investments Commission (ASIC) of 12 superannuation trustees found all but one failed to ensure their practices or disclosure aligned with their obligations in dealing with member funds.
The regulator has called on super trustees to ensure they meet legal obligations for dealing with incoming money from consumers if a new or increased interest in a super product cannot be issued by the next business day.
“As financial product providers, trustees are required to safeguard incoming monies for products in prescribed ways,” said ASIC commissioner, Danielle Press.
“This is to protect a consumer’s money until the product is issued to them or they receive an increase in an existing product.
“While no significant individual member impact was identified in our review, we were very concerned to find the trustees hadn’t given enough consideration to these important obligations, in some cases for decades, potentially putting members’ money at risk.”
Following the review, all trustees with deficiencies took action of some kind, including paying remediation, notifying ASIC of a reportable situation, implementing changes to deal with application monies to become compliant, or improving disclosures.
“We expect trustees and other product issuers to take these obligations seriously. Trustees should thoroughly review their arrangements for dealing with members’ money before a product is issued as well as those of their service providers,” Press said.
Among the four main issues identified were trustees using an account that did not meet the requirements for some or all of their superannuation products; not retaining a member’s money on trust in a compliant bank account until the time an interest in a product was issued or increased; inadequate disclosures to consumers; and failing to identify money subject to requirement of section 1017E of the Corporations Act.
“Where we identify poor progress by trustees in changing their processes within a reasonable time, ASIC will consider appropriate regulatory action,” Press said.
The regulator had raised these concerns with the trustees and communicated with major auditing firms and industry bodies on how to assist with identifying and addressing compliance issues.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
