Retirement
Retirement savings guarded by toothless lions: Royal commission
Australia’s corporate regulators have come under fire by the royal commission, blasted as reluctant to act, and struggling to act effectively.
Retirement savings guarded by toothless lions: Royal commission
Australia’s corporate regulators have come under fire by the royal commission, blasted as reluctant to act, and struggling to act effectively.
According to the royal commission’s closing submission for the superannuation hearings, Australia’s corporate regulators, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), are hamstrung by a reluctance to act and an ineffective approach.
“Since 2008, APRA has applied to a court to disqualify a person once — a director of Trio Capital, in a matter that was ultimately resolved by an enforceable undertaking,” the royal commission’s counsel assisting said.
“In the last three years, APRA has never ‘specifically’ formed the view that a superannuation fund trustee was not acting in the best interests of members [and] APRA has not commenced any other court proceeding in the superannuation space in the past 10 years.”
As for ASIC, the royal commission submitted that there are questions as to whether it has “struggled to date to act as an effective conduct regulator”.
Counsel assisting pointed to NAB’s prolonged refusal to review whether it had charged fees for no service as suggesting a “lack of respect” for ASIC, and a corresponding lack of authority from ASIC.
Similarly, ASIC’s approach to ANZ and CBA’s misselling of superannuation products was offered up as an example of an approach “that is not conducive to the development of an industry-wide compliance culture”.
Continuing, counsel assisting said ASIC’s regulatory remit is now larger than similar regulators in the UK, the US and Germany.
“That may suggest that it would be preferable that another regulator be tasked with ensuring good consumer outcomes in superannuation by enforcing compliance,” the submission said.
Counsel assisting said the round of hearings and submissions raise questions around what can be done to push regulators to act promptly and whether the regulators’ roles are suitable.
“Given that what we are fundamentally concerned with is conduct that in subtle but ongoing ways negatively affects the retirement outcomes of consumers, are either of the regulators best placed to carry the responsibility to protect consumers should the balance between them be restructured or significantly altered?” it concluded.
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