APRA clarifies rules on super fund ‘promoters’

Superannuation funds have won their argument with the Australian Prudential Regulation Authority (APRA) for a narrower interpretation of service providers who are also deemed to be “promoters”.

The regulator has determined that “promoters” are third parties rather than associated entities.

The definition of “promoters” is important in the context of the data superannuation funds are required to provide to APRA and which can then be published and provided to annual meetings of members.

The regulator said that a “promoter” means a service provider “where there is a promoter agreement in place between the RSE licensee and the service provider in respect of the RSE or the product of the RSE”.

It said that a promoter agreement “Means an agreement in relation to the engagement of the RSE licensee by a third party ‘the promoter’ to offer an RSE or offer a product on behalf of a promoter and in relation to marketing or distribution of the RSE or product”.

The changes reflect APRA’s view, expressed earlier this year, that “the current definition of ‘promoter’ is broader than APRA intends and captures service providers beyond APRA’s intent as outlined in the publication proposals”.

In October, last year, APRDA said it proposed to “publish total expenses with the name of the payee where the payee is a promoter”.

Explaining its proposed approach, APRA said that due to the special nature of the promoter relationship, it considered there was additional public interest relating to payments to promoters, including indicating that the relationship with the payee is a promoter relationship”.