APRA hits Equity Trustees with additional licence conditions

Mike Taylor

Managing Editor/Publisher, Financial Newswire

18 December 2025

The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on Equity Trustees Superannuation Limited related to investment governance shortcomings.

The APRA announced came shortly after the regulator announced an enforceable undertaking relating to Netwealth while the Australian Securities and Investments Commission acted against Netwealth over First Guardian.

APRA said it had imposed the additional conditions to address prudential concerns relating to its investment governance frameworks and practices, including oversight of platform investment options made available to members.

ETSL acts as trustee for 11 registrable superannuation entities (RSEs) and has approximately 649,000 member accounts and over $37 billion in funds under management.

The additional licence conditions follow APRA’s recent thematic review of the investment governance, strategic planning and member outcomes practices of superannuation trustees that offer platforms (‘Platform Trustees’). Broadly, the review identified deficiencies in ETSL’s onboarding processes and practices, including adequacy of investment selection criteria and due diligence, as well as investment option monitoring and reporting frameworks, and management of conflicts of interest.

Specifically, APRA’s review of ETSL identified concerns regarding:

• onboarding of new investment options to ensure they are assessed consistently, are in the best financial interests of members, and appropriately manage conflicts of interest;
• adequate knowledge, operational and investment due diligence undertaken in relation to new investment options;
• identifying key risks, and ensuring independent analysis of information received from investment managers and external research and rating agencies; and
• the adequacy of investment monitoring and reporting to identify and manage higher risk investment options.

Under the additional licence conditions, effective 18 December 2025, ETSL is required to:

• appoint an independent expert to undertake separate reviews of its platforms’ investment menus and investment governance framework;
• develop and implement an uplift plan to address identified gaps, and provide APRA with assurance or attestation that the remediation actions are complete and effective; and
• undertake a further review of its investment menu against the enhanced investment governance requirements to determine ongoing suitability of each investment option.

ETSL must also refrain from onboarding certain new high-risk investment options to its platform until an independent expert confirms the option has gone through the uplifted onboarding process and an accountable person attests that all reasonable steps were taken to ensure the option is in members’ best financial interests.