ASIC lifts lid on industry surveillance

The Australian Securities and Investments Commission (ASIC) has identified three super funds as most at risk of non-compliance in the 2011-12 financial year as part of its surveillance activities.

ASIC said it undertook yearly surveillance of the superannuation funds, while the remaining 227 received reactive surveillance.

It has allowed the industry a peak into its surveillance work as part of a commitment to greater transparency and increasing the public's understanding of how ASIC operates.

The surveillance chart showed ASIC reviewed 589 responsible entities (REs), 230 super fund trustees, and 20 major custodians as part of its surveillance operations during the 2011/12 financial year.

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It showed surveillance coverage on the top 25 REs who hold 70 per cent of funds under management (FUM) as well as four REs that it has identified as most at risk of non-compliance received yearly attention.

An additional 20 REs were surveilled yearly as they operated in sectors ASIC had identified as risky or had concerns about. Reactive surveillance was conducted on the remaining 540 REs. 

ASIC said to review the 20 major custodians operating in Australia it would take 2.9 years on average.

The report showed 43 ASIC staff work across the superannuation and investment management space.

ASIC chairman Greg Medcraft said, "ASIC takes a risk-based approach to surveillance, identifying significant and strategically important gatekeepers within the financial system to analyse. Holding gatekeepers to account is an important part of how ASIC achieves its priorities to ensure investors and financial consumers are confident and informed, and markets are fair and efficient".