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Super regulation lagging, says ASFA

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By Miranda Brownlee
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2 minute read

The regulatory oversight of the superannuation system has failed to keep pace with the rapidly changing face of the industry, argues the Association of Superannuation Funds of Australia (ASFA).

In its response to the Financial System Inquiry Interim Report, ASFA said regulation has struggled to keep up with structural changes in the super industry such as the rise of SMSFs.

“[This has seen] complexity emerge in the regulatory treatment of the pools of money in the various structures and vehicles, which may be inside or outside the core APRA regulation framework”.

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ASFA explained in the response that APRA-regulated funds no longer make up a majority of the superannuation industry.

“The superannuation and retirement industry extends to banking, insurers, managed investments, SMSFs, property, gateways, clearing houses, financial advisers and more,” said ASFA.

“The inability of regulatory policy to keep up with this changing environment has resulted in an inconsistent application of the regulatory burden, more gaps in regulation and greater opportunity for regulatory arbitrage.”

ASFA noted, for instance, there is no single body responsible for monitoring whole of system/industry regulatory issues, “particularly from a consumer view point”.

“When failures have occurred across the system, for example Trio, to date there has not been an analysis of whether a more holistic approach to regular risks would have mitigated the losses to consumers," it said. 

Super regulation lagging, says ASFA

The regulatory oversight of the superannuation system has failed to keep pace with the rapidly changing face of the industry, argues the Association of Superannuation Funds of Australia (ASFA).

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