Following critical questioning of APRA’s Helen Rowell at Round 5 of the Financial Services Royal Commission over APRA’s enforcement policies APRA’s submission says:

“In APRA’s view, having the power to take litigation or other action is important to achieve the necessary changes and responses from entities without necessarily having to take that action in all cases. That is, the ‘threat’ of potential action facilitates the achievement of appropriate outcomes, which is APRA’s focus. …

The issue of ‘fees for no service’ impacts on the regulatory spheres of both ASIC and APRA. The ultimate causes of action for the misconduct identified may be different as between ASIC and APRA, but they will have the same factual substratum. APRA and ASIC share information and coordinate their activities in relation to the issue of fees for no service. APRA does not agree that it is incumbent on it to act earlier or separately from ASIC in such matters, when ASIC action may be achieving the common regulatory objective of appropriate remediation to affected members and/or where there may be other actions in train.”

APRA Information Paper

APRA has also published an Information Paper setting out the current regulatory framework for Registrable Superannuation Entity (RSE) licensees and APRA and ASIC’s respective roles within that framework. It also outlines steps APRA and ASIC take to work effectively under the twin peaks model as it applies in superannuation.

The key distinctions in responsibilities between regulators are that:
• APRA is primarily responsible for ensuring RSE licensees prudently manage their business operations in a manner consistent with their member best interest obligations and the delivery of quality member outcomes; and
• ASIC is primarily responsible for ensuring RSE licensees meet their conduct obligations in their dealings with consumers, including disclosure and advice to members and ensuring members have access to complaints processes.

APRA and ASIC are both focused on promoting practices and behaviour by RSE licensees that support the delivery of appropriate outcomes for members, and hence there are necessarily areas and issues that will be of common interest to both agencies.

However, APRA primarily focuses on the overall operations and processes of RSE licensees and how these may impact the funds within the RSE licensees’ business operations and the overall outcomes for members of those funds. ASIC, on the other hand, is primarily focused on protecting the interests of consumers in relation to their engagement with superannuation RSEs and RSE licensees, with a particular emphasis on disclosure.

The paper outlines the regulators’ respective responsibilities in relation to:

• RSE licensing;
• Fund operation and administration;
• Rules governing RSE licensees and funds;
• RSE licensee board structure, duties and remuneration;
• Products and fees;
• Disclosure about superannuation products;
• Advice provided to members;
• Financial reporting for RSE licensees and funds;
• Complaints and dispute resolution by RSE licensees;
• Enforcement against RSE licensees and directors.