APRA has published a letter to platform trustees, setting out APRA’s key findings and required actions following its thematic review of platforms.
Trustees who offer platforms facilitate choice and flexibility by offering a diverse range of investment options to both superannuation members and other investors.
APRA, as the prudential regulator, is responsible for ensuring Platform Trustees adhere to the requirements in the prudential standards, relating to the onboarding, ongoing due diligence and monitoring of investment options, as well as promoting good member outcomes.
APRA has stated that trustees cannot outsource accountability.
It says:
“Whilst there can be numerous parties involved in the distribution of products via platforms to members, Platform Trustees remain accountable for determining whether an investment option is suitable for inclusion on the investment menu and ensuring that the overall platform menu offering supports good outcomes for members. “
APRA’s review included Platform Trustees collectively responsible for almost 95% of superannuation platform assets.
The APRA letter points out its expectations for the industry are as follows:
On-boarding: Platform Trustees should improve on-boarding practices, including in relation to trustee investment governance frameworks and policies, manner of reliance on external research and ratings, and identification and management of potential and actual conflicts of interest.
Ongoing monitoring: Platform Trustees should improve their monitoring of investment options, including in relation to trustee investment governance frameworks and policies, triggers, reporting and oversight.
Remedial action and member transfers: Platform Trustees should improve oversight where outcomes for members are not being delivered, with clearly defined processes to ensure timely and effective remedial action.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
