The prudential regulator has issued a letter to superannuation licensees reinforcing their obligations under the controlling stake requirements.
APRA said after undertaking a review of the implementation by RSE licensees its focus has been on the interaction of the ownership definitions that relate to a "stake" and ensuring a person applies for the required approval when a change of ownership occurs.
"APRA has observed that, since the introduction of the controlling stake requirements, RSE licensees and the relevant persons acquiring the controlling stakes may not have always considered the application of these requirements to their particular circumstances," APRA said.
"For example, APRA is aware that some RSE licensee directors hold shares in an RSE licensee. Where this is the case, it may be that the appointment of a new director or removal of an existing director has triggered the controlling stake requirement."
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The letter issued to licensees also included other examples of the persons that should be the subject of an approval application.
It said ensuring compliance with the controlling stake requirements is important, as a failure to obtain APRA's approval before owning a controlling stake in an RSE licensee is a strict liability offence under of the SIS Act which may attract severe penalties.
"The purpose of this letter is to remind RSE licensees of the requirement to seek approval from APRA, the form the approval request must take and importantly the action APRA requires all RSE licensees take to determine if this letter applies to them," it said.
"An application for approval to hold a controlling stake in an RSE licensee needs to be considered whenever there are changes to the ownership of shares in an RSE licensee."
APRA said an application will always be required for a new RSE licence and may also be required where there are changes to:
- The directors of an RSE licensee, where this involves a change in shareholdings;
- A restructure of a corporate group;
- An acquisition of shares in an RSE licensee or its holding company; or
- A successor fund transfer that results in the issue or transfer of shares to a director, employer organisation or employee organisation.
APRA said licensees will now be immediately required to identify if there have been any changes since 5 July 2019 to the ownership of shares in an RSE licensee in relation to which APRA approval has not been obtained.
Licensees ware also required to obtain appropriate professional advice on the FSSA ownership requirements if necessary and how they apply to the RSE licensee's current ownership structure.
"Particular attention needs to be given to the definition of "associates" in the FSSA as "associates" is widely defined," APRA said.
Licensees need to ensure they review the RSE licensee's constitution, shareholder deed and/or risk management framework to ensure the controlling stake requirements are incorporated and the requirement to seek APRA approval is included as required.
"APRA also strongly encourages applicants to consult early with their Responsible Supervisor or contact APRA Licensing," it said.