By guest contributor Rafiyat Husnain, Analyst, Atchison Consultants
“The central principle surrounding regulation arrangements are, and must remain, in the best interests of members.” Commissioner Hayne, February 2019.
The final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry contains a vast list of 76 recommendations across three volumes. The findings include the impact these recommendations will have upon the superannuation industry, especially for trustees, superannuation funds and investment managers. While the report recognises the importance of tightening the regulation and supervision of the superannuation industry, key legislation has been in existence for a long time. Clarity of the roles of ASIC and APRA as regulators is presented in the report.
A new oversight authority is proposed, independent of the government, which will assess the effectiveness of ASIC and APRA in discharging their functions and meeting their statutory obligations. Without limiting APRA’s existing powers under the SIS Act, it is proposed that ASIC will be given the power to enforce all provisions in the SIS Act that give rise to a cause of action against an RSE licensee or director for harmful conduct against consumers.
Clarity has been provided in the superannuation industry. APRA is the prudential regulator and responsible for system and fund performance while ASIC will be responsible for conduct and disclosure. These regulators should be enforcing penalty provisions or other provisions relating to harmful conduct against consumers.