ASIC prepares to be primary super conduct regulator

ASIC commissioner Sean Hughes has made it clear the regulator is already positioning itself to be the primary conduct regulator in superannuation.

Speaking at a Risk Management Association Australia event yesterday, Hughes said ASIC's role in regulating the conduct of super funds was one of the most significant changes for ASIC to be recommended by the Royal Commission.

While ASIC awaits legislative reform to cement its role in super, Hughes said ASIC is already positioning itself to take on this enhanced duty.

"We will be driving better behaviour by trustees to ensure that they act in the best interests of members, by undertaking the necessary supervision and surveillance of superannuation trustees, with more frequent on-site visits," Hughes clarified.

"We will also pursue action against misconduct by trustees where appropriate, including where we see a culture that is promoting misconduct or turning a blind-eye to misbehaviour."

This will involve monitoring the implementation of the Protecting Your Super reforms.

Meanwhile, in its second update on its actions in response to the Royal Commission recommendations ASIC made it clear it is making progress on Hayne's other recommendations too.

The regulator said it has dedicated resources to Royal Commission related referrals and matters within the Office of Enforcement.

It specifically mentioned court action ASIC has taken against Select AFSL, Dover and NAB as a result of the Royal Commission.

ASIC chair James Shipton said: "As we have seen in recent weeks, a number of those referrals and case studies are before the courts, and we have more under investigation. As we have also seen, the new regulatory powers provided to ASIC are enabling early intervention on what we believe are matters of potential significant harm to consumers."

The update also includes details of ASIC's close and continuous monitoring program which has seen ASIC staff on-site at the major banks and AMP for 164 out of 222 working days meeting with staff at all levels.

The regulator intends for these reviews to enable early identification of issues and views it as a harm minimisation exercise.

"Our new supervisory initiatives - Close and Continuous Monitoring and the Corporate Governance Taskforce - also continue to gain momentum.  Finally, we are dedicating significant additional resources to support the Government's Implementation Roadmap," Shipton said.

ASIC's Corporate Governance Taskforce is currently completing a targeted assessment of the corporate governance practices of 21 of the ASX100 companies. That report is expected by the end of the year.

Shipton added that the update should be seen as demonstrating ASIC's commitment to enforcement.

"This update, outlining as it does the progress in pursuit of ASIC's renewed enforcement mandate, should indicate the sense of urgency and significance that the ASIC Commissioners and staff are bringing to the task," he said.

"It also demonstrates that we will continue to use all of the regulatory tools at our disposal to deliver a fair, safe and efficient financial system for all Australians."

Read more: Royal CommissionNABCorporate Governance TaskforceSean HughesASIC CommissionersJames ShiptonOffice of EnforcementRisk Management Association AustraliaSelect AFSL
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