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Regulators form working group to tackle super investment fraud
Federal Treasury and the country's regulators will form a panel to oversee the Government's response to a Parliamentary Joint Committee (PJC) report on the Trio Capital collapse and Richard St. John's report on financial services compensation arrangements.
The Australian Prudential Regulation Authority, the Australian Securities and Investment Commission and the Australian Taxation Office will form a Superannuation Regulators Working Group with Treasury to ensure the implementation of he Government's response, strengthen communication and strengthen the regulatory framework.
The Minister for Finance and Superannuation, Bill Shorten, said the Government agreed with the majority of the findings, including improving the communication of risks to investors and strengthening professional indemnity insurance for retail financial services providers.
Shorten said the Trio report had prompted the Government to refer investment fraud, including in the superannuation industry, to the Heads of Commonwealth Operational Law Enforcement Agencies (HOCOLEA), which includes the Australian Federal Police, the Australian Crime Commission and the Attorney General's Department.
He said the Government accepted there was no recommendation for a last-resort compensation pool for investors, and acknowledged the cost borne by the industry with regard to current regulatory burdens. Shorten said, however, that the issue might be revisited in the future.
"In the meantime, the Government encourages professional bodies to themselves consider possible solutions to the issue of under-compensation, such as the implementation of their own scheme which further protects retail clients in the event of a member's insolvency," Shorten said.
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