Sequoia/InterPrac look to activate ORFR on Shield, First Guardian
Under scrutiny financial planning group, InterPrac has called for the activation of the Operational Risk Financial Requirement used after the collapse of Trio Capital in 2011 to remediate investors in the Shield and First Guardian collapse.
Sequoia chief executive, Gary Crole pointed to the ORFR as an existing mechanism for members of Australian Prudential Regulation Authority superannuation funds to be fully remediated.
Crole said that interprac was already in the process of issue ORFR activation requests for affectec clients.
“The failure of the Shield and First Guardian funds highlights why the financial services industry must protect members whose retirement savings were lost through operational failures,” Crole said. “The ORFR demonstrates the foresight and strength of the Australian superannuation system to compensate members swiftly and fairly without compromising system integrity.”
Crole noted that the ORFR is funded by a small fee deducted from superannuation member contributions on APRA-regulated platforms and serves as a dedicated reserve to compensate investors in cases of operational failures such as fraud, technological breakdowns, or process errors.
“Use of the ORFR to remediate member losses would reinforce trust in Australia’s wealth management and superannuation industries, confirming the value of strong regulation and the mandate for super funds to act in members’ best interests,” he said.
“While it is essential that those who misled trustees, research houses, and licensees are called to account, the Australian superannuation system has evolved to safeguard members and those safeguards must be fully utilised,” Mr Crole said.
InterPrac are in the process of issuing ORFR activation requests to superannuation trustees which placed the Shield and First Guardian investment suites on their platforms.
I think he is confusing the ORFR with the Part 23 provisions in the SIS Act that enable compensation to be paid in the context of fraud in superannuation funds. I don’t think that Gary Crole has enough fingers to point at as part of blaming others for what went wrong here. This is all part of a desperate strategy to avoid or minimise putting his own money on the table.
Of course he is trying to reduce exposure.
But why should innocent Advisers only, get lumped with over a $$$$ BILLION onto CSLR.
Super Funds and MIS need to pay for their own product downfalls.
How about we call it a Collective Charge 🙂