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Home / How super works / Super news / New powers announced for APRA and ASIC

New powers announced for APRA and ASIC

April 6, 2019 by SuperGuide Leave a Comment

Reading time: 1 minute

It’s good news for Australians consumers, although long overdue. Legislation has just passed that increase the powers of the Australian financial industry’s two biggest regulators – the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).

APRA

APRA has been granted enhanced powers to deal with underperforming super funds as a legislative response to recommendations made in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. It can now take civil action against super fund trustees or directors for breaching their obligations to their fund members, including their duty to act in members’ best interests.

The legislation strengthens the obligation for trustees and directors to address fund underperformance as early as possible in order to improve member outcomes. Civil and criminal penalties have been introduced as potential consequences for the trustees and directors of underperforming funds. In addition, underperforming funds may be forced to merge with other super funds or exit the industry.

Previously, APRA could only take action against a super fund trustee or director if they had contravened super legislation or if there was an urgent threat to fund members’ best interests.

The new legislation requires super fund trustees and directors to conduct an annual assessment of member outcomes against a series of APRA-provided benchmarks. In addition, APRA now has enhanced powers to analyse super fund expense data to ensure that members’ funds are being spent in their best interests and according to the sole purpose test.

Note: The sole purpose test is legal requirement that requires super funds to be maintained for the sole purpose of providing retirement benefits to their members (or to their dependants if any of their fund members die before retiring).


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ASIC

ASIC has also been granted increased powers as a legislative response to recommendations made by the Financial System Inquiry in 2014. ASIC will now be responsible for:

  • Ensuring that financial services firms design, market and distribute financial and/or credit products that meet consumer needs.
  • Intervening where there is a significant risk to consumers with a financial and/or credit product in order to prevent the consumer suffering financial harm.

The intention of these legislative reforms is to strengthen consumer protection in the financial services industry and to enhance consumer trust in financial products.

The information contained in this article is general in nature.

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IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

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Super contributions
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Accessing super
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Women and super
Super tips and strategies
How-to guides
Super quizzes
Superannuation Q&As
Superannuation glossary
Super funds
Best performing super funds
Super fund rankings
Best performing pension funds
Pension fund rankings
Super fund average returns
Super investing strategies
Comparing super funds
Choosing a super fund
Choosing an investment option
Super fund fees
Insurance and super
Super fund profiles
SMSFs
SMSFs for beginners
SMSF administration
SMSF checklists
SMSF compliance
SMSF investing
SMSF pensions
SMSF strategies
SMSF Q&As
Plan your retirement
Retirement planning for beginners
When should I retire?
How long will I live?
How much super do I need?
Will I get the Age Pension?
How much will I spend in retirement?
Financial advice
Retiring overseas
Preparing for retirement
Retirement planning strategies
Retirement calculators and reckoners
In retirement
Income in retirement
Super lump sums
Super pensions
Age Pension
Working in retirement
Life in retirement
Senior concessions and services
Aged care
Estate planning
Super death benefits
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Important: Disclaimer

All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

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