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ASIC tells super funds to 'step it up'

Speaking at the Australasian Investor Relations Association event, Australian Securities and Investments Commission (ASIC) commissioner Simone Constant gave a stern warning to Australian superannuation funds.

Constant said financial reporting of listed companies was falling short of expectations and warned super funds not to run the same risk.

"Some of our recent work shows that in some quarters, some listed entities need to lift their game," she said.

"Last October, ASIC looked at 156 financial reports from companies across the ASX for the previous financial year. Over a third of them were found wanting."

Constant said ASIC would be looking closely at super funds as this is the first financial year in which the financial reports of super funds will come under ASIC's regulation.

"It's an important milestone. Investors fairly want to know if their money is working in the way they intend it - whether they've placed it on the stock market or they've placed it in their super funds," Constant said.

"So, this is an important change that will continue to level the playing field and make accurate information transparent so that all investors - regardless of where their money sits - can know how it's being invested. That's the power of transparency."

Constant said consistency for members was also a strategic and enforcement priority for the regulator.

She said with six million Australians are already at pension drawdown age, and with a large number still to come, super funds need to deliver good service.

"We need super fund trustees to step up right now and step in to making sure they put good outcomes for members at the heart of everything they do," she said.

"Members need confidence in efficient and fair service delivery to support them participating in a full and confident retirement. Too often though, at the moment, trustees are falling short on consistently meeting the fair expectations of their members."

In addition, Constant said insider trading was a major problem in Australia and the regulator is determined to crack down.

"Now, misconduct damaging market integrity, including insider trading and continuous disclosure breaches, for this reason, is an enduring enforcement priority for ASIC," she said.

"Australia has one of the most severe insider trading regimes in the world - and yes, the penalties are harsh, but frankly they are dwarfed by the damage to market integrity that unchecked insider trading can bring."

Read more: ASICASXAustralasian Investor Relations Association