That is the view of the Association of Superannuation Funds of Australia (ASFA), which used its submission to the Senate Economics References Committee inquiry into the performance of the regulator to question ASIC’s regulatory style and engagement.
ASFA was also critical of the tardy provision of, and late changes to, class order relief, saying it added costs to the super sector.
“ASIC, as a regulator, needs to be clearer on its regulatory approach and style,” ASFA said.
“There is a degree of uncertainty in the industry on the ASIC approach to consultation, supervision and enforcement. This is a particularly important matter in areas where there is an overlap between APRA and ASIC.”
Despite ASIC’s current engagement with the super sector being mostly limited to registration, reporting and enforcement, its “substantial powers appear to act as a disincentive to establishing collaborative relationships with industry”, ASFA said.
“The result is that ASIC seeks rectification/enforcement after a regulatory breach has occurred, as opposed to the prudential stance adopted by APRA.”
ASFA said it would be helpful for regulated entities such as Australian financial services licensees and Australian credit licensees to have regular contact with an ASIC team the way the Australian Prudential Regulation Authority (APRA) does with registrable super entities.
Introducing greater staff specialisation may also prove more effective and more efficient than the current “first cab off the rank” style approach, ASFA stated.
ASFA also said delays in providing class order relief created unnecessary uncertainty for the industry and increased costs to super funds and their members due to “increased resourcing to implement legislative changes where, relatively late in the piece, the timeframe for compliance is extended, or the scope amended”.
However, ASFA was highly complimentary regarding the quality of regulatory guides provided by ASIC, the responsiveness of its staff, as well as the regulator’s MoneySmart website.
ASFA also stated its belief that it is imperative the Superannuation Complaints Tribunal (SCT) be free to operate as a truly independent authority and should be functionally separated from ASIC and established as a body in its own right, with separate funding measures.
