It came as a surprise to many last week when ASIC announced that it had launched a case against $54 billion industry fund Rest for what appears to be pretty egregious conduct. It was a surprise precisely because – aside from political grandstanding and policy firefights spats – the superannuation sector has been maniacal in its efforts to appear squeaky clean.
Rest seemed surprised too. Its first response was to moan about ASIC taking it to court, saying it was “disappointed” the corporate regulator had felt the need to regulate conduct that Rest had self-reported. Go figure. Action against Statewide Super quickly followed, that time for false and misleading representations made about the insurance cover held by members of the fund. Statewide at least took it on the chin, saying that it would co-operate with ASIC and remediate its members.
And now ASIC deputy chair Karen Chester has told media and business that the regulator will double down on this new-found zeal for correcting wrongdoing within superannuation. This development will no doubt be welcomed – one only has to check the fabled comments section of InvestorDaily sister brand ifa to see that many have been waiting a long time for ASIC to shift its gaze away from financial advisers who forgot to cross their t’s/dot their i’s and towards the $3 trillion superannuation sector, which until recently was not even required to disclose its portfolio holdings.
And it seems they’ve got quite the pipeline to get through, with more than 20 enforcement investigations underway and two briefs of evidence in support of criminal charges handed over to the Commonwealth Director of Public Prosecutions (CDPP).
“The super reforms that took effect from 1 January 2021 expanded ASIC’s role as the conduct regulator. ASIC’s enforcement will tilt strongly towards harm-targeted deterrence, especially in the all-important window of the next 12 to 18 months,” Ms Chester said.
“Our approach is premised on the simple equation that harming members, harms the future prosperity of Australian workers, and our most important pool of savings.”
ASIC may find this new focus to be more politically advantageous than its botched post-RC crusade against the big banks. ASIC’s blundering in the wagyu and shiraz case basically got it stripped of responsible lending oversight, while Scott Morrison personally thanked Matt Comyn for the part he played in creating Australia’s economic safety net in a speech on Tuesday – the clearest indication that the big banks are back in favour.
After the James Shipton debacle, and amid growing concern in Canberra that it is an ineffective regulator, ASIC needs a win. The increasingly noisy superannuation sector should deliver plenty.
