The other multi-billion-dollar sector run by unions and employers
What started out more than 25 years’ ago as a regulatory carve-out for funds established by unions and employers to cover award redundancy entitlements has grown into a multi- billion-dollar sector and the Australian Securities and Investments Commission (ASIC) is considering changing the rules.
The bottom line for ASIC is that, by its own admission, there has been considerable growth in funds under management of the schemes which, but for the regulatory relief that has applied over two decades, would be treated as managed investment schemes (MISs).
What is more, ASIC says that the funds have grown from simply providing redundancy benefits to now funding long service leave, sick leave, training and insurance benefits – things “not contemplated when we introduced our original relief”.
“We understand that in 2003 fund operators had approximately $500 million under management, and that by 2015 this had increased to $2 billion under management. We are now aware that some funds individually have close to or over $1 billion under management, based on information published in annual reports,” ASIC said.
“Despite the size of the funds under management, currently fund operators do not have to comply with the requirements that are applicable to operators of other managed investment schemes. For example, the statutory financial reporting obligations that apply to registered schemes do not apply,” it said.
“These requirements would otherwise provide ongoing transparency on funds under management and transactions undertaken. Further, the governance requirements that apply to AFS licensees, which set conduct standards and ensure conflicts of interest are managed, do not apply.”
ASIC last consulted on the arrangements last year and noted that it had received “divergent feedback” with existing fund operators arguing for the status quo, while an employer association argued that the regulatory relief should be revoked “and that it was appropriate to require fund operators to comply with the Corporations Act.
ASIC is now seeking feedback from stakeholders on changing the rules, throwing up three options:
Option 1—Allow the relief to expire and require full compliance with the Corporations Act.
Option 2—Grant relief from specific obligations in the Corporations Act.
Option 3—Remake the existing relief with additional conditions.
Modern day mafia Industry Super & these Redundancy funds provides ample opportunity for Union & Bikie bosses to clip the ticket at their own will.$$$$$$$
How the hell does ASIC allow multi billions to be Unregulated ?
Ignorance ?
Kick backs to ASIC ?
Jobs for the boys and associates ?
What an absolute joke from ASIC.
At the same time killing Advisers with mass over regulation.
ASIC is totally Regulatory Capture Corrupted with Unions Funds management.
“The legislative instrument is allowing employee redundancy funds (which hold more than $2 billion in employee entitlements) to remain free from essential regulation, and is allowing some redundancy funds to continue engaging in inappropriate financial practices, as identified by three royal commissions”.
Three royal commissions, billions under management, and still nothing has been done, that tells you everything you need to know.
ASIC staff and commissioners have all told us they are unaffected by their Qantas Chairman’s Lounge passes, free box seats at the footy game of their choosing, and free car parks in every CBD — apparently it’s all okay because they’re disclosed. Its okay nothing to see…