The Australian Prudential Regulation Authority has issued a clarification to superannuation fund trustees on the manner in which it will deal with the custody of real property and other assets held by public offer funds that rely on the appointment of a custodian to meet their capital requirements.
APRA has addressed the matter in its Frequently Asked Questions responses, and said that the holder of a registrable superannuation entity (RSE) licence for a public offer fund needed to rely on the appointment of a custodian to meet their capital requirements, and this included the custodian holding legal title and physical possession of an asset.
However, the regulator said it was aware that in limited circumstances these options might not be available to an RSE licensee.
“APRA will consider on a case-by-case basis alternative arrangements where the RSE licensee can satisfy APRA that there are adequate safeguards in place to ensure transactions relating to assets are in line with the SIS [Superannuation Industry (Supervision) Act 1993] legislation, particularly the prohibition relating to placing a charge over fund assets,” it said.
