The Australian Prudential Regulation Authority (APRA) has defended its right to impose minimum capital requirements on superannuation fund trustees, even though it would not routinely do so.
APRA’s defence of its position has been outlined in the regulator’s response to submissions with respect to a consultation package. In the response, it covered the issue of the adequacy of resources held by superannuation funds, noting that while it “would not routinely impose a specified minimum level of financial resources’ it was open to APRA to do so on a case-by-case basis.
It said that one submission had raised concerns that the guidance suggested APRA had unfettered discretion to increase capital requirements for trustees, and that this was not mandated by legislation or subject to a procedural process of fairness with clear guidelines.
APRA responded that it was empowered by the Superannuation Industry (Supervision) Act to impose additional licensing conditions on a trustee where it believed it had prudent reasons for doing so.
APRA said it had the power to impose specified minimum levels of financial resources to be held by a trustee as a licence condition — albeit this was something that was not routinely done.
“Any decision to specify minimum levels of financial resources would be subject to careful consideration by APRA and any such decision would be subject to appropriate procedural fairness processes,” the regulator said.
