APRA imposes EU on a cooperative AMP Super
AMP Super has been forced into a court enforceable undertaking with the Australian Prudential Regulation Authority (APRA) over what the regulator is describing as governance and risk management deficiencies.
The enforceable undertaking was related to matters which flowed from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
APRA announced late on Tuesday that its decision to accept the enforceable undertaking followed a lengthy investigation into past conduct that APREA believed led to a number of potential breaches by AMP Super of the Superannuation Industry (Supervision) Act.
The regulator said that as well as the matters flowing from the Royal Commission others were self-reported by AMP Super between late 2019 and 2020.
The APRA announcement noted that the Australian Securities and Investments Commission (ASIC) had been conducting its own investigations into AMP Super and both regulators had engaged with each other on their respective investigations and agreed that entering into the enforceable undertaking would address regulatory concerns both agencies had with AMP Super.
The announcement said APRA had already imposed additional licence conditions and directions on AMP Super in June 2019 in response to concerns about its governance and risk management frameworks.
“Although AMP Super has since made improvements to its internal systems, controls and processes, the CEU covers specific matters additional to those addressed by APRA’s 2019 enforcement action,” it said.
“APRA recognises AMP Super’s improvements, but believes these must be further embedded and operationalised. AMP Super has acknowledged APRA’s concerns, and accepted that rectification and remediation of members as outlined in the CEU are appropriate.”
Under the terms of the CEU, AMP Super has committed to:
- identify and address the root causes of the potential breaches and issues with input from an independent expert;
- rectify areas of concern;
- remediate members who have been affected by aspects of the conduct dealt with by the CEU (noting that AMP Super has already remediated members in some cases); and
- continue to enhance its governance controls, risk management and processes for acting in members’ best interests.
APRA Member Margaret Cole said APRA accepted the CEU as the most effective and efficient way to protect AMP Super members by ensuring there is minimal risk of such issues recurring.
“AMP is one of the wealth industry’s largest and best resourced companies, and APRA expects a commensurately high standard of governance and risk management,” she said.
“While we acknowledge the efforts AMP Super has made towards improving its internal systems, the issues addressed by the CEU show there is further work to do. By offering this CEU, AMP Super has committed to fix promptly remaining legacy issues that have existed within its superannuation business and ensure affected members are appropriately remediated,” Cole said.