Following the Financial Services Royal Commission APRA and ASIC issued a joint letter to superannuation trustees about how regulatory oversight will operate and licensing changes: APRA remains responsible for prudential and member outcomes regulation and ASIC will be the conduct and disclosure regulator.
ASIC will have joint responsibility with APRA for enforceable provisions in the SIS Act which relate to consumer protection.
The coverage of the Australian financial services licensing regime in superannuation will be extended to ensure ASIC has access to appropriate powers and enforcement tools, and can successfully perform its role as superannuation conduct regulator.
All superannuation trustees subject to APRA regulation will need to provide all services involved in operating a superannuation fund in accordance with the general obligations on AFS licensees under the Corporations Act and the consumer protection provisions of the ASIC Act. All trustees, including ‘non-public offer’ trustees, will be held to the same standards.
Breach reporting
The APRA Dual Reporting Framework will continue. Trustees will be able to continue to report breaches to both regulators by submitting one report to APRA, provided the information reported to APRA meets the breach reporting requirements in the Corporations Act.
The timeframes under the SIS Act for trustees to report breaches have been extended from 10 business days to 30 calendar days in order to align with the Corporations Act requirements.
TRUSTEES OF REGISTRABLE SUPERANNUATION ENTITIES (RSE) SHOULD HOLD NO OTHER ROLE OR OFFICE
Superannuation trustees will be prohibited from having duties other than those arising from or in the course of the performance of its duties as a trustee of a superannuation fund.
NO HAWKING OF SUPERANNUATION AND INSURANCE PRODUCTS
The Corporations Act prohibits the hawking of superannuation products as well as the hawking of insurance products.
It also contains a new general prohibition of offers to sell or issue financial products which are made in the course of, or because of, unsolicited contact. The general prohibition will apply to all kinds of financial products, including securities and interests in managed investment schemes, except in certain circumstances.
