Fund Regulatory Update

APRA releases super trustee discussion paper on financial strength

The Australian Prudential Regulation Authority (APRA) has issued a discussion paper looking for plans superannuation trustees have to maintain financial resilience and protect members’ financial interests. APRA is seeking feedback on the use of operational risk financial requirement (ORFR), reserving practices and protections afforded to trustees with insurance. APRA wants to know how these factors may need to be adjusted to fit possible circumstances in the future.

Feedback on the issues covered in the discussion paper is welcome from all industry stakeholders. Submissions close on 11 March 2022. The discussion paper is available on the APRA website at: Strengthening Financial Resilience in Superannuation.

EISS Super must merge before end of financial year

APRA has placed additional licence conditions on EISS Super, instructing the fund to merge with a bigger and better-performing fund before 30 June 2022. After an investigation, APRA has taken steps to protect fund members after ‘persistant underperformance’ and EISS’s MySuper product failing the first annual performance test in August 2021.

AFCA review tabled

The Review of the Australian Financial Complaints Authority (AFCA) has been tabled in Parliament, with the findings AFCA is operating effectively and meeting its obligations. The review makes 14 recommendations with 13 for AFCA, mostly relating to transparency and decision-making processes. One recommendation goes to the government, to remove legislative requirements for authorised credit representatives to be a member of AFCA, to remove unnecessary regulatory requirements that have no benefit to consumers.

The final report of the AFCA Review, and the Government’s response are available on Treasury’s website.

AMP Super under EU from APRA

APRA has accepted an enforceable undertaking (EU) from AMP Superannuation Limited and N.M. Superannuation Proprietary Limited (AMP Super) to improve governance and risk management deficiencies. The EU comes after a long investigation into past conduct that led to potential breaches by AMP Super, discussed at the Banking Royal Commission. The CEU is available on the APRA website.