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Super funds reject ‘look through’ on unlisted investment reporting

Mike Taylor16 April 2024
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Superannuation funds have urged against a “look through” approach to their unlisted investments.

The funds have urged the Australian Prudential Regulation Authority (APRA) to adopt a methodology around their overall exposure as opposed to “looking through” investment.

The superannuation funds have urged the overall exposure approach as the regulator consults on the second phase of its data transformation project which will have the effect of imposing new reporting requirements on superannuation funds.

The Association of Superannuation Funds of Australia has used a response to the APRA consultation to not only urge against the “look through” approach but to also urge for internally managed unlisted investments to be treated differently to those which are externally managed.

“Unlisted investments usually are valued at the level of the RSE’s overall investment exposure, as opposed to through the various investment vehicles/instruments.” The ASFA response said.

“Exposure to a particular asset could be through a variety of different investment vehicles/instruments (by way of example ordinary equity, preference shares, and shareholder loans notes). The RSE’s exposure to that asset is subject to valuation, and the entire exposure then allocated to the investment options,” it said.

“Given this, with respect to unlisted investments in SRS 553.0, ASFA members have recommended that

  • for internally managed unlisted investments – the overall investment exposure is considered to be the unit of account
  • for externally managed unlisted investments – the unit of account should be at the RSE/investment vehicle level. By way of example, if the holding is through several PE funds/investment vehicles, each fund/investment vehicle would be reported separately.

Elsewhere in response to APRA, ASFA also warned that its member funds had “significant concerns” that APRA may disclose commercially sensitive information around cost information associated with individual service provides.

“Disclosing such commercially sensitive information could undermine the negotiating position of superannuation funds and may lead to reduced competition in the market and result in less advantageous arrangements with higher fees/costs,” the ASFA response said.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Unlisted Asset Values Ponzi
21 days ago

Industry Super begging and no doubt bribing APRA to keep the Unlisted made up valuations secret and hidden.
Regulatory Capture Corrupted APRA will do as Industry Super says and keep the Unlisted Asset Ponzi schemes hidden.

Bob Duruncle
21 days ago

100%

Smells off
21 days ago

Reits need to disclose their unlisted assets how’re super funds any different?

Frank
21 days ago

In my opinion, those who are being asked to reveal their figures to regulators should not have any say in how these figures are calculated and/or are presented.

…. “Disclosing such commercially sensitive information could undermine the negotiating position of superannuation funds and may lead to reduced competition in the market and result in less advantageous arrangements with higher fees/costs,”

I note the inclusion of the words ‘could’ and ‘may’ in this sentence.

XTA
21 days ago

Be good to know which companies are doing these valuations and their connections to industry super as well as how they were picked to value the assets.

Disgusted
21 days ago

Why and when do the regulated dictate terms to the regulator? This is a genuine and uniquely Australian joke! Of course Industry funds should disclose appropriately. If the regulated set terms, not only is the regulator useless and pointless, but we would start with more unfair requirements i.e. funding of CSOLR, ASIC Levy, QoAR Balls Up, Ongoing Red Tape overkill, SoAs which aren’t fit for purpose, PI cover which is costly mandatory and pointless. Only in Australia would this be accepted. Nigeria is less conflicted and transparent.

Last edited 21 days ago by Disgusted