APRA chairman Wayne Byres has taken superannuation trustees to task for adopting a "reactive" approach to conflicts management.
Speaking before the House of Representative Standing Committee on Economics in Canberra on Friday, Mr Byres said super funds still have work to do when it comes to conflicts management.
Super funds have had heightened expectations placed upon them since the introduction of prudential standards in 2013, and APRA has recently conducted a review of the regime.
"While there have been improvements across the industry and some trustees have established quite good practices, others still have more work to do to meet the objectives of the prudential standard," Mr Byres said.
"Unfortunately, we still see instances where actual and potential conflicts are viewed very narrowly: a minimalist, compliance-based approach is taken to the design of conflicts management frameworks, rather than an approach that seeks to meet the spirit and intent of the requirements."
Some trustees also take a "reactive" approach to dealing with conflicts, rather than ensuring "regular and appropriate prior consideration of conflicts and a proactive approach to their effective management", Mr Byres said.
"APRA’s supervisors are engaging with the entities that were covered by the review to ensure that appropriate and timely action is taken on any specific issues that were identified," he said.
The prudential regulator is also issuing a general letter to the industry that will provide the key findings of its review, as well as a range of issues for trustees to consider while enhancing their "conflicts management frameworks".
"APRA will continue to focus on conflicts management as part of its future supervision activities, and will continue to push the industry to meet the enhanced governance and risk-management expectations set out in our standards," Mr Byres said.
The prudential regulator has announced that its “enforcement strategy and infrastructure” will be reviewed by its recently appointed sec...
Financial and insurance services continued to have the highest gender pay gap out of any Australian industry in 2017–2018 at 30.3 per cent...
The corporate regulator has told the Hayne royal commission that it is at a loss over how to successfully prevent misconduct in financial se...