The Australian Prudential Regulation Authority (APRA) has substantially upgraded its risk assessment capabilities and bolstered the intensity of its supervision over the past two years, according to its 2003 annual report.
In the 2002-03 financial year, APRA’s superannuation enforcement activities nearly doubled to 261 — up from 107 the previous year — and focused on preventative actions such as removing trustee boards from the management of troubled super funds or issuing enforceable undertakings.
Super related actions made up 67 per cent of all actions taken by APRA, compared to 54 per cent the previous year.
The actions included 26 prosecutions, 44 referrals to other agencies or the police, 13 appointments of liquidators or inspectors and 16 disqualifications of auditors or directors during the 2002-03 financial year.
The regulator also referred 21 cases to the Director of Public Prosecutions for late or non-lodgment of the 2001-02 annual super fund returns. But, at the same time, it managed to improve overall compliance from 36 per cent of returns received on time in 2000-01 to a whopping 93 per cent on time for 2002-03.
By the end of June 2003, 825 of the 3000 entities suitable for the Probability and Impact Rating System (PAIRS) rating had been classified. One hundred entities scored an ‘extreme’ or ‘high’ rating in terms of the probablility that they might not be able to honour their financial promises.
APRA chairman John Laker says the regulator expects to complete an initial assessment of all relevant institutions within two years.
