Topics
- Compliance and Regulation
APRA’s imposition of additional licence conditions on United Super Pty Ltd and BUSS (Queensland) Pty Ltd. echo past catalysts that transformed Australia’s Financial Services governance, signaling regulatory changes ahead.
Introduction
Three moments have been pivotal for the uplift of risk and compliance practices in the Australian Financial Services Industry.
Implications
This followed widespread media coverage of criminal allegations against the Construction, Forestry and Maritime Employees Union (CFMEU) and its officials, including in relation to fraud, corruption, and links with criminal gangs. These two Superannuation Trustees are both partially owned by the CFMEU and have CFMEU officials taking up a material number of seats on their Boards (3 of 14 and 4 of 8 respectively).
The Trustees have agreed to commission independent reviews against their obligations under Prudential Standard SPS 520 Fit and Proper and their compliance with the duty to act in the best financial interests of beneficiaries of the funds.
This follows debate over the conflicts inherent in industry super funds having Directors nominated by union or employer groups, and the extent to which political donations from these funds are in the best interests of their members.
APRA has indicated that it intends to make the results of these reviews public. This mirrors its approach to the 2018 Prudential Inquiry into the CBA, where it published the results of the inquiry and required all major banks and insurers to perform a self-assessment against the findings. As such, it seems likely that Superannuation Trustees will be directed to conduct similar reviews.
Areas for Trustee Review
Areas of scope for such reviews will relate to the findings of the Uniter Super and BUSSQ reviews, however they are likely to include:
Prudent Trustees should be reviewing the above, identifying uplift plans, and ensuring that any variance from good practice is defensible in the circumstances of that organisation.
A Turning Point for Superannuation Risk and Compliance
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