Commissioner Hayne has urged the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), to co-regulate when it comes to superannuation.
He agreed with APRA’s former submission on co-regulation, and recommended that APRA, as the prudential regulator for super, be responsible for establishing and enforcing prudential standards and practices while ASIC oversee the relationship between RSE licensee, which hold Australian financial services licences, and individual consumers.
Hayne noted the current division sees ASIC’s role under the Superannuation Industry (Supervision) Act limited to matters of disclosure, and it falls to APRA to administer the balance of the Act.
What’s more appropriate, according to the Commissioner, is that ASIC’s role be enlarged so that APRA’s remit in respect of the SIS Act be shared with ASIC “in a way that aligns with their traditional roles and strength.”
Hayne said that providing ASIC the power to protect the interests of members would provide some consistency across the two legislative regimes that apply to RSE licensees.
“An RSE licensee holds an AFSL and in holding that licence is subject to the obligations under section 912A of the Corporations Act,” he said. “Those obligations have some general similarity with obligations imposed under section 52 (and section 52A) of the SIS Act.”
“They are also similar to the obligations imposed on RSE licensees who are authorised to offer a MySuper product under section 29VN(a) (and section 29VO) of the SIS Act. It is evident that the same conduct may give rise to breaches of all of these provisions.”
He also said that while APRA’s skills were geared to prudential regulation, enforcement was a fundamental aspect of ASIC’s work, so it would face the similar issues it currently faces in enforcing other legislation.
“For example, the covenants of RSE licensees and their directors under the SIS Act are akin to the duties that ASIC already enforces in respect of responsible entities of managed investment schemes and their officers under the Corporations Act.”
