APRA urges quarterly valuations on super funds
Amid concerns about how frequently superannuation funds revalue their unlisted assets, the Australian Prudential Regulation Authority (APRA) has told them it expect funds to undertake valuations on at least a quarterly basis.
In guidance issued this week it said that where a superannuation fund chose to undertake valuations less frequently, it expected the fund to “demonstrate how it has determined the valuation frequency is appropriate”.
The regulator also made clear that it expects superannuation funds that take investment management in-house, it expects that it resources and staffs the function in similar fashion to external investment management.
On the question of the valuation of investments, the APRA guidance said that superannuation fund licensees would consider triggers that would warrant more frequent valuations including market volatility and the external operating environment, including changes in Government policy settings.
“APRA expects an RSE licensee would ensure that all valuations are received within a timeframe that supports active oversight and timely implementation of valuation changes. For example, an RSE licensee would seek to ensure that valuations are received in line with, and ahead of, common performance measurement periods, such as end of calendar quarters,” it said.
“APRA expects an RSE licensee would determine the circumstances in which valuations would be reported to the Board and management.”
On the question of in-house investment management, the APRA guidance states: “Where an RSE licensee operates some, or all, of its investment functions internally, APRA expects an RSE licensee would be able to demonstrate that it has systems, resources and processes that support the appropriate management of risk commensurate with services provided by highly-skilled external service providers”.
Sounds like APRA is waving a soggy lettuce leaf at union funds that manipulate their performance figures through dodgy valuations of unlisted assets.
Yep a little talk from APRA but zero action.
Dear APRA, Industry Super Funds reasons for not doing quarterly valuations:
1) Industry Funds don’t feel the need to value Unlisted Assets quarterly as we are Industry Super and rules don’t apply to us.
2) Industry Funds performance will be lower if we actually used real and up to date valuations for Unlisted Assets and that will not look good for marketing performance returns.
Thanks for the memo to think about quarterly valuations but it’s just not going to favour us.
Regards
Industry Super Australia
APRA response:
Sure Industry Super, true the rules don’t apply to ISA Funds and we certainly don’t want to affect that ISA performance marketing.
Carry on with bogus inflated out of date annual or less valuations.
Regulatory Capture Corruption at its worst ASIC & APRA doing anything and everything to keep the ISA lies alive.
Hard to believe Union funds would do something dodgy like that-cough cough!
APRA hold no standards to industry super funds about “balance portfolios”
APRA tells hostplus you can call it balance if you want, invest 98% in growth, don’t worry about unlisted assets mate value you them when you want. If the media says anything we will claim we know nothing about this even though is in the financial review every second week, Just tell them we will look into it and never follow up.
APRA to hostplus, you got my tickets to the footy we talked about? sole purpose test “mate don’t worry about it”
The issues regarding unlisted assets have been understood and mentioned regularly over many years.
Why has it taken all this time to have it investigated?
Why doesn’t APRA simply make it compulsory for quarterly valuations ?
Oh that’s right it doesn’t want to force Industry Super to do anything they don’t want too.
Too big to fail… God forbid if members actually knew how badly those unlisted assets were performing!
My key takeaways –
ISA graduated head of the ‘Investment 101’ class of the Bernie Madoff school for corrupt financiers.
APRA where there taking ISA’s soggy Sao biscuits to class for them.
‘were’