ASIC flags probe of super fund private market exposures

Superannuation funds have been placed on notice by the Australian Securities and Investments Commission (ASIC) that it intends closely scrutinising the appropriateness of their exposures to private markets.

The regulator is already conducting surveillances of a number of superannuation funds.

Noting that more than $400 billion of superannuation assets are now invested in private markets, ASIC commissioner, Simone Constance, has told a forum of senior superannuation fund executives and trustees that the regulator will be examining valuations and liquidity.

She flagged that ASIC will be kicking off the process via the publication of a discussion paper in the first half of this year questioning whether the current market settings are appropriate.

Constance said ASIC did not just want superannuation fund trustees and chairs to tell it was they were doing but wanted them to demonstrate as well.

“We are conducting surveillances of the financial reporting and auditing of targeted super funds, with a particular focus on expenses and valuations,” she said. “This is the first time super funds have been subject to scrutiny of this kind.”

“We want to be sure that trustees can back up what they’re saying with evidence. That their members are protected from risky investments. So that their money will be there for them when they retire.”

Constance said that the ASIC approach was part pursuing consistency and transparency across markets.

“This reflects the changing dynamic between public and private markets and emerging impacts – including to superannuation members,” she said.