APRA has imposed a new licence condition on a big four bank’s superannuation business after a further investigation into a referral from the Royal Commission.
APRA has imposed a new licence condition on Colonial First State Investments Limited to ensure members’ best interests are "prioritised in its decision-making".
“APRA’s decision follows an investigation into matters referred to it by the financial services Royal Commission in February 2019,” APRA said in a statement. “The Royal Commission had formed the view that CFSIL’s decisions not to bring the migration of certain cohorts of its FirstChoice members into MySuper products forward from just prior to the legal deadline, and to grandfather certain fee arrangements, may not have been in its members’ best interests.”
While APRA hasn’t yet concluded that CFSIL breached the Superannuation Industry (Supervision) Act, its investigation raised concerns about the adequacy of the company’s internal processes. The new licence condition will require CFSIL to record how it considers members’ best interests and priority covenants when making decisions that materially impact their interests. CFSIL did not oppose the application of condition, which is effective immediately.
CFSIL’s grandfathering of certain fee arrangements was one of 12 cases that Commissioner Kenneth Hayne referred to APRA for further investigation in handing down the Royal Commission’s Final Report last year.