The Australian Prudential Regulation Authority (APRA) today released a consultation package on governance arrangements for APRA-regulated superannuation trustees (RSE licensees).
This package proposes amendments to APRA’s governance prudential framework in light of the Government’s proposed legislative amendments to require boards of RSE licensees to have at least one third independent directors, including an independent chair.
The package follows APRA’s letter of 26 June 2015, Governance requirements for RSE licensees: proposed amendments, which sought comment on APRA’s preliminary proposals to supplement the Government’s proposed legislative amendments.
Submissions in response to APRA’s June letter raised concerns about the lack of certainty in relation to the definition of independence, given substantial elements of the definition were, at the time, proposed to be defined in APRA’s prudential standards.
The Government announced in August that more detail on the definition of ‘independent’ will be reflected in the legislation, rather than in APRA’s prudential standards. The package released today reflects this updated Government position and the responses to APRA’s June letter. It proposes:
- amendments to Prudential Standard SPS 510 Governance and to Prudential Practice Guide SPG 510 Governance; and
- new draft Prudential Standard SPS 512 Governance Transition and Prudential Practice Guide SPG 512 Governance Transition.
APRA Member Helen Rowell said ‘The proposed changes support sound governance practices by RSE licensees. APRA’s proposed updates to its prudential framework will support RSE licensee boards as they move to this new governance environment.’
APRA invites submissions on the draft prudential standards and prudential practice guides by 23 October 2015. The consultation package can be found on the APRA website at: http://www.apra.gov.au/Super/Pages/Governance-arrangements-August-2015.aspx.
Subject to consideration of submissions received from this consultation, and the passage of the proposed legislative amendments, APRA intends to release the final prudential standards and prudential practice guides later in 2015.
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, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $4.9 trillion in assets for Australian depositors, policyholders and superannuation fund members.
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