ASIC and SCT must remain separate

The relationship between the Superannuation Complaints Tribunal (SCT) and the Australian Securities and Investments Commission (ASIC) must remain separate and must be seen to be separate, the Australian Institute of Superannuation Trustees (AIST) said.

In a submission to Treasury in response to the ‘Proposed Industry Funding Model for the Australian Securities and Investments Commission Consultation Paper’, the AIST urged for clarification on the relationship between ASIC and the SCT, making it clear that ASIC was a service provider to the SCT.

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“AIST does not and would not support the funding of the Superannuation Complaints Tribunal (SCT) to be collected by or on behalf of ASIC,” the submission said.

“In addition, we consider that the present process, where there is no real transparency, must be changed to ensure that the industry is perfectly in the clear as to how much the SCT costs to operate.”

The AIST proposed three steps for this process:

1. The SCT should make a submission with an annual plan to the Government outlining how much funding it requires;
2. The submission should specify how the SCT intends to spend the funds; and
3. The submission should be signed off by Treasury.

“Ideally, we would prefer that the SCT submissions for funding went through the processes in the cost recovery guideline, and a cost recovery impact statement should be completed at the Tribunal,” AIST said.

While it supported SCT funding through the APRA levy, AIST stressed it must be answerable to Parliament and the industry, and base its funding decisions on these factors.

The AIST also said the proposed methodology for deciding on levy mechanisms did not consider that two identical funds in terms of size could have different risk profiles and necessitate different supervisory considerations.

“In particular, we note that this model does not differentiate between two funds that are greater than $10 billion in funds under management, whether greater than this by a small margin (e.g. $11 billion) to a very large fund (e.g. $70 billion),” it said.