How trustees interact with ASIC matters

Oksana Patron

8 September 2022

Super funds have been “strongly encouraged” to engage in open and transparent dialogue with the Australian Securities and Investment Commission (ASIC) as the regulator’s appetite to take enforcement action “where funds fall foul of the law” has not diminished, ASIC’s commissioner, Danielle Press, told the Conference of Major Superannuation Funds (CMSF) in Brisbane.

Although super funds have a lot to grapple with, with new obligations and responsibilities, trustees would need to be able to continue to demonstrate that their decisions were consistent with the best financial interests of their members.

“As the conduct regulator, we remain focused on the behaviour of superannuation trustees to improve consumer outcomes. We will continue to look at how trustees are dealing with consumers – is it fair? Does it meet the needs of members? Does it promote confidence in the system,” Press said.

“Earlier I said that our principal expectation of super funds remained the same. The other constant – now and over the next five years and beyond – is our willingness to take enforcement action where funds fall foul of the law.”

However, when deciding to take action, ASIC would take into account a number of factors such as the nature of circumstances of the suspected misconduct.

“We also consider how a trustee interacted with us in relation to the suspected misconduct. This brings me to my final point, how trustees interact with ASIC matters,” ASIC’s commissioner added.

“I strongly encourage trustees to engage in open and transparent dialogue with ASIC – if there are serious concerns and a civil penalty action against the trustee, this may be taken into consideration by Courts.”

Speaking on key superannuation focus areas, Press said super funds should take a consumer-centric approach to product design and distribution, in-line with the new obligations, with further investments in the right systems, processes and technologies as well as uplifting their data analytics and governance arrangements.

“It’s not just about complying with the law.”

Following this, Press said there were three key areas to focus on over the next five years which included the opportunity of harnessing the data in the super system to better understand the financial future, the way the funds responded to consumer harms and funds’ and their obligations as “significant market participants” with regards to market integrity.