The Australian Prudential Regulation Authority (APRA) has released its response to submissions on the implementation of prudential standards for the superannuation industry.
Released today is APRA’s response paper, which details the main issues raised in the 41 submissions received and APRA’s response to those issues, as well as 11 draft prudential standards.
This response package follows release in September 2011 of APRA’s discussion paper, Prudential standards for superannuation, which outlined APRA’s approach to the introduction of prudential standards for the superannuation industry.
In response to submissions received, APRA has made revisions to some aspects of its proposals, most significantly in relation to the operational risk financial requirement and to the scope of the standard in relation to defined benefit funds.
APRA Deputy Chairman Ross Jones said there was a high level of interest shown by industry and other stakeholders in APRA’s proposals.
‘It is encouraging that the submissions were unanimously supportive of APRA’s broad objectives in establishing prudential standards for superannuation and, consequently, raising the minimum requirements for trustees to prudently manage members’ money.
‘The draft prudential standards clearly articulate that the primary responsibility for prudent management of superannuation funds rests with trustees and the boards of directors,’ Mr Jones said.
The draft prudential standards released today include six standards covering matters common to other APRA-regulated industries, where APRA’s approach has been to harmonise its requirements where appropriate. These standards are:
- Prudential Standard SPS 220 Risk Management;
- Prudential Standard SPS 231 Outsourcing;
- Prudential Standard SPS 232 Business Continuity Management;
- Prudential Standard SPS 310 Audit and Related Matters;
- Prudential Standard SPS 510 Governance; and
- Prudential Standard SPS 520 Fit and Proper.
The remaining five prudential standards cover matters that are specific to superannuation. They include reforms that the Government recommended APRA implement as prudential standards, as well as the relocation of some existing requirements and guidance into new standards. These standards are:
- Prudential Standard SPS 114 Operational Risk Financial Requirement;
- Prudential Standard SPS 160 Defined Benefit Matters;
- Prudential Standard SPS 250 Insurance in Superannuation;
- Prudential Standard SPS 521 Conflicts of Interest; and
- Prudential Standard SPS 530 Investment Governance.
APRA’s response paper and the 11 draft prudential standards can be found on the APRA website at: www.apra.gov.au/Super/Pages/Superannuation-reforms-2011-2013.aspx
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding $4 trillion in assets for almost 23 million Australian depositors, policyholders and superannuation fund members.
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