Jeffrey Lucy
The chairman of the Australian Securities and Investments Commission (ASIC), Jeffrey Lucy, has warned that the regulator will be closely monitoring the timing and content of the superannuation industry’s disclosure to members who transfer out of funds without their consent.
Lucy told an Association of Superannuation Funds of Australia luncheon that the regulator’s monitoring would extend to three areas of member transfer — transfer to an eligible rollover fund, transfer to a successor fund and transfer between an employer-sponsored division and a personal division of a master trust.
“ASIC will specifically look at timing of disclosures made and whether opt-in or opt-out provisions dictate members’ transfers,” he said.
Lucy also said that as mature businesses with skilled and experienced management, ASIC expected the role played by financial institutions in growing the regulatory regime to maturity “should not be perceived as difficult or onerous”, despite commercial pressures and expectations.
“The broad obligations [of commercial expectations and compliance with the law] are not difficult to understand and comprehend … [and are] not as thorny as it may at first appear.”
Disclosure has long been of interest to ASIC and the superannuation industry as a whole, particularly regarding product disclosure statements (PDSs).
While pointing out that ASIC’s role is not to vet PDSs, Lucy said that “ASIC and many in the industry remain concerned about the length of some”.
He pointed to the widespread use of multiple PDSs within the superannuation sector, where it is more prevalent than in other sections of the industry. “Of themselves, [these] make PDSs much longer and potentially more complex than is perhaps necessary,” he said.
He took the opportunity to promote the provision for short form PDSs contained within “FSR Refinements 1”, but pointed out that only one issuer had developed such a PDS.
