The Australian Prudential Regulation Authority (APRA) has agreed a series of actions with the National Australia Bank Limited (the Bank) following the discovery of unit price errors in statutory funds held by National Australia Superannuation Pty Ltd, MLC Nominees Pty Ltd and National Australia Financial Management Ltd (NAFiM), all of which are subsidiaries of the Bank.

The actions were the result of NAFiMs failure to accurately measure the transaction cost component of the unit price and its subsequent announcement in August 2002 that approximately $60 million had been allocated from its shareholders funds to compensate investors for the error. The expected compensation was further increased to just over $65 million in May 2003 following an independent actuarial assessment by Trowbridge Deloitte.

APRA conducted an intensive investigation into the causes of the pricing errors, which led to an additional increase in compensation to ensure that, on any reasonable basis, all affected investors would be reimbursed. In conjunction with other actions taken by the Australian Securities and Investments Commission (ASIC), the Banks subsidiaries also agreed to implement a series of improvements in compliance and risk management practices to remedy process deficiencies. Central to these will be the commissioning of independent experts to review and recommend any appropriate enhanced unit pricing and corporate governance processes within the superannuation businesses of the companies.

APRA will be working closely with the companies to ensure that existing procedures are in keeping with the standards expected of trustees/directors to superannuation fund members under the Superannuation Industry (Supervision) Act 1993 and the Life Insurance Act 1995.

APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates $1.6 trillion in assets for 20 million Australians.

For further information:	Media and industry inquiries only:
APRA Call Centre	Susan Morey
1300 131 060	APRA - Public Affairs
	02 9210 3384
	0438 124 524