Super funds face continuing ASIC muscle flex
The Australian Securities and Investments Commission (ASIC) has signalled just how willing it is to leverage its extended legislative coverage of the superannuation industry with a succession of actions against superannuation funds this year.
ASIC’s extended powers with respect to superannuation commenced on 1 January, 2021, and in that time it has initiated action against some of the nation’s largest superannuation funds including AustralianSuper, Mercer, Active Super, Vanguard and now big corporate fund, Telstra Super.
And the challenge facing superannuation fund trustees and executives is that ASIC not only has more reach with respect to superannuation fund misconduct but also has an oversight role with respect to the Australian Financial Complaints Authority (AFCA) which also has coverage of superannuation.
Superannuation fund executives and trustees have told Financial Newswire that ASIC’s extended jurisdiction has resulted in them investing more heavily in regulatory compliance training and specialist personnel.
Much of ASIC’s focus this year has been with respect to greenwashing, but it initiated civil penalty proceedings in the Federal Court against AustralianSuper over alleged failures to address multiple member accounts, affecting 90,000 members over the past decade.
In doing so, ASIC noted that it was the first case it had brought “in its capacity as a co-regulator with APRA alleging contraventions of section 52 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) that relates to the conduct of trustee’s duties”.
With respect to greenwashing, ASIC has this year initiated action against Active Super, Mercer Super and Vanguard Investments.
Its civil penalty proceedings against Vanguard alleged misleading conduct in relation to claims about ESG exclusionary screens while that against Mercer Superannuation alleged making misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
ASIC yesterday made the point that its action against Telstra Super was the first under the regulatory regime around internal dispute resolution which came into effect from 5 October, 2021.
ASIC alleges that 40% of Telstra Super’s responses to complainants during the relevant period did not comply with its own dispute resolution procedures, which included 106 complainants who were not responded to within the applicable 45-day timeframe.
ASIC alleges that between 22 October 2021 and 13 January 2023, Telstra Super received 337 superannuation complaints but failed to comply with notification requirements when it failed to:
- respond to 106 complainants within 45 days;
- inform 85 complainants about why there was a delay in responding to their complaint; and
- inform 22 complainants about their right to take their compliant to AFCA.