The Australian Prudential Regulation Authority (APRA) has approved applications by IOOF Holdings Ltd and Australian Wealth Management Limited (a wholly owned subsidiary of IOOF Holdings Ltd) (collectively referred to as IOOF) to hold a controlling stake in OnePath Custodians Pty Limited (OnePath) and Oasis Fund Management Limited (Oasis). OnePath and Oasis are currently owned by Australia and New Zealand Banking Group Limited (ANZ).
APRA was granted the power to approve or refuse an application to own or control a registrable superannuation entity (RSE) licensee under section 29HD of the Superannuation Industry (Supervision) Act 1993 (SIS Act) in April this year.
In accordance with section 29HD, APRA has concluded it has no reason to believe that, because of IOOF’s controlling stake in OnePath or Oasis, the RSE licensees may be unable to satisfy one or more of the trustee’s obligations contained in a covenant set out in the SIS Act.
APRA’s decision recognises IOOF’s progress in strengthening governance structures and management of conflicts within its existing RSE licensees, in response to additional licence conditions imposed by APRA in December 2018.
In particular, APRA notes that IOOF has:
- appointed a majority of independent directors to its RSE licensee boards;
- moved to legally separate its dual regulated entities (on track to be completed by 31 December 2019); and
- implemented a dedicated business function to support IOOF’s APRA-regulated entities.
These structural changes provide IOOF’s RSE licensees, now including OnePath and Oasis, with the necessary framework to operate independently within the IOOF group. They also enhance the RSE licensees’ ability to comply with their fiduciary obligations, including to always act in the best interests of their members.
APRA will maintain close supervisory attention on IOOF to encourage a culture of ongoing improvement in its governance and business operations, consistent with APRA’s industry-wide focus on improving outcomes for superannuation members.
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 $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.