ASIC confirms use of compulsory powers on failed funds

The Australian Securities and Investments Commission (ASIC) has forced superannuation funds which were deemed to have failed the Australian Prudential Regulation Authority (APRA) performance test to reveal all their subsequent communications to members.

The regulator has confirmed that it exercised its compulsory information gathering powers to force the release of the communications and that the process was ongoing.

Answering questions on notice from the Parliamentary Joint Committee on Corporations and Financial Services, ASIC said that it was actively monitoring performance communications in relation to the 12 trustees (13 MySuper products) who failed the performance test.

“We have received large amounts of communication material these trustees are providing to their members (e.g. emails to members) under compulsory information gathering powers and are currently reviewing this material to see if it is misleading or deceptive within the terms of relevant legal prohibitions in the law,” ASIC said.

The ASIC answer came against the background of senior APRA executives expressing disappointment that few members of the ‘failed’ funds had opted to move to other funds.

This prompted questioning from Victorian Australian Labor Party member, Julian Hill about whether “the relatively codified walk of shame” imposed on the failed funs had turned into a “beauty pageant”.

Amid the communications around failed funds, a number of funds who have passed the APRA performance test have been publicly highlighting their status to workers in affected industry sectors.