The Australian Prudential Regulation Authority (APRA) has issued directions and imposed additional registrable superannuation entity licence conditions on NULIS Nominees (Australia) Limited (NULIS) to improve its governance and control environment, and ensure members’ best interests are prioritised in its decision-making.
APRA’s actions follow an investigation into matters referred to it by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019. The Royal Commission formed the view that NULIS’s decisions in relation to the migration of certain cohorts of its members into MySuper products, grandfathering certain fee arrangements, and the charging of fees to members for services that were not provided, may not have been in members’ best interests.
While APRA has not concluded that NULIS breached the Superannuation Industry (Supervision) Act 1993, its investigation raised concerns about the adequacy of NULIS’s internal processes for demonstrating how members’ best interests were considered and prioritised.
The directions and additional licence conditions require NULIS to:
- record how it considers members’ best interests and priority covenants when making decisions that materially affect their interests. This measure will improve NULIS’s practices and ensure APRA is better able to assess whether members’ best interests are being sufficiently considered and prioritised by NULIS in future; and
- address prudential concerns APRA identified in its supervision of NULIS, corroborated in an independent report undertaken by Deloitte. NULIS will be required to undertake timely remediation by implementing improvements in its governance and control environment and appointing an independent expert to report on compliance with its licence conditions.
NULIS has agreed to implement the actions required under the directions and the additional licence conditions in a timely manner.
The matters relating to NULIS represent one of 12 cases that Commissioner Kenneth Hayne referred to APRA for further investigation in handing down the Royal Commission’s Final Report last year.