Superannuation fraud risk management

APRA has released draft Prudential Practice Guide SPG 223 Fraud Risk Management (SPG 223) for consultation.

The PPG provides guidance on APRA’s expectations of the treatment of fraud risk in an RSE licensee’s risk management framework required under Prudential Standard SPS 220 Risk Management (SPS 220).

Under SPS 220, an RSE licensee is responsible for ensuring that its risk management framework covers all material risks to its business operations, both financial and non-financial. An effective risk management framework therefore includes appropriate consideration of fraud risk, which is a subset of operational risk.

Fraud risk refers to the risk of loss from internal fraud or external fraud.

APRA expects that appropriate consideration of fraud risk by an RSE licensee would also include consideration of the risks posed to the RSE licensee’s business operations due to corruption and bribery.

The PPG covers:

  • Development and implementation of the fraud risk management framework
  • Planning and resourcing
  • Fraud prevention
  • Fraud detection
  • Fraud response
  • Monitoring and review
  • Superannuation specific fraud risks: investment risks and outsourcing risks
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