The Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have jointly welcomed the proposed legislative reforms increasing the role of ASIC in superannuation.
In response to recommendations from the Financial Services Royal Commission (FSRC), on 31 January the Treasurer released exposure draft legislation for consultation. The draft legislation introduces important reforms that will support ASIC and APRA to carry out their roles as co-regulators in superannuation. The proposed reforms include expanding ASIC's role as conduct regulator while retaining APRA's important role as the prudential and member-outcomes regulator in superannuation.
The changes to ASIC's role will be accompanied by an enhancement in the close co-operation and collaboration between the two regulators, which was strengthened by a Memorandum of Understanding updated last year (Refer 19-327MR). Legislative reform to further increase this co-operation and collaboration is also proposed.
ASIC Commissioner Danielle Press said: "ASIC and APRA have a shared commitment to improving the fitness of the superannuation system for Australians, and we strongly support these reforms. The reforms will strengthen ASIC's ability to effectively regulate superannuation trustee conduct and focus on consumer protection in our regulation of superannuation.
"All trustees have an interest in a robust regulatory system, without gaps in member protection. We want to assure trustees that ASIC and APRA will work together to ensure the new regime is effective and to reduce duplication of regulatory effort," Ms Press said.
APRA Deputy Chair Helen Rowell said: "APRA welcomes ASIC having an expanded role in regulating a sector that is growing ever more integral to financial outcomes for Australians, and the broader economy. As the conduct regulator of the financial sector, ASIC has a critical role to play in tackling misconduct in superannuation, while APRA will continue to strengthen its focus on member-outcomes and prudential soundness."
ASIC and APRA have issued a joint letter to superannuation trustees about how regulatory oversight will operate assuming the reforms become law. The letter explains how they will work together to more effectively promote better outcomes for members, acknowledging that in doing so consideration needs to be given to reducing regulatory burden.
- FSRC Recommendation 6.4 – ASIC as conduct regulator – Without limiting any powers APRA currently has under the SIS Act, ASIC should be given the power to enforce all provisions in the SIS Act that are, or will become, civil penalty provisions or otherwise give rise to a cause of action against an RSE licensee or director for conduct that may harm a consumer. There should be co-regulation by APRA and ASIC of these provisions.
- FSRC Recommendations 3.8, 6.3 and 6.5 are also related to this recommendation.