ASFA and JANA release draft guidance note ahead of CPS 230 start date

The draft guidance note enhances and replaces existing guidance on investment management operational due diligence to prepare for the start of prudential standard CPS 230.

The Association of Superannuation Funds of Australia and JANA have released a draft guidance note for consultation that will aim to help the superannuation sector meet new regulatory obligations.

From 1 July 2025, registrable superannuation entities will need to comply with updated requirements set out in Operational Risk Management Standard CPS 230.

In order to prepare for the new prudential standard, ASFA and JANA announced in November last year that they would lead an industry-wide effort to replace the existing guidance on investment management operational due diligence.

The proposed updates in the draft guidance aim to strengthen operational resilience and ensure investment managers are demonstrating the effective management of risks as they support the long-term objectives of superannuation funds.

JANA and ASFA said the draft guidance note has been shaped through engagement with a broad working group of asset owners, managers, and consultants and is intended to support consistent practices across the industry.

The draft guidance note makes a range of updates to align with CPS 230 and CPS 234 Information Security in order to reinforce a strong, enterprise-wide risk management culture.

It also contains updates encouraging investment managers to engage independent specialists for operational due diligence reviews that aim to lift industry standards, support consistency in assessments, and promote greater transparency.

The draft guidance note also provides detailed guidance for independent reviewers and asset owners who self-service and provides a more comprehensive set of criteria covering governance, personnel, IT security, ESG factors, business continuity, and data governance to align with CPS 230.

It also recommends continuous improvement and alignment with evolving industry standards and encourages independent and specialised assessments to strengthen due diligence effectiveness.

JANA head of operational consulting, Jo Leaper, said that CPS 230 marks a significant shift in operational resilience.

“This draft framework is designed to support consistent and practical risk management practices across both APRA-regulated and non-regulated entities,” said Leaper.

ASFA CEO Mary Delahunty said strengthening operational due diligence is critical for the stability and integrity of our industry.

“This updated guidance provides a clear roadmap for superannuation funds and investment managers to meet the evolving regulatory landscape and enhance their risk management frameworks to the benefit of everyday Australians,” said Delahunty.

The draft guidance note is open for feedback from ASFA members until 24 July.