APRA's licence conditions imposed on IOOF require the wealth manager to begin 2019 with the appointment of an independent reviewer who will report to the regulator quarterly.
The independent reviewer's role will be to report on IOOF's progress as it attempts to address governance issues raised publicly by APRA on 7 December 2018. On top of the reviewer's quarterly reporting, both APRA and IOOF have also agreed to meet monthly. The regulator has previously said several of the governance issues were first raised with IOOF in 2015.
Financial Standard understands IOOF met its 31 December 2018 deadline to appoint the independent reviewer and is waiting for APRA's approval.
IOOF has also agreed with APRA to separate its Registrable Superannuation Entity (RSE) and Responsible Entity (RE) licence functions into distinct legal entities by 31 December 2019. The wealth manager will also appoint an independent expert to analyse the possible consolidation of its RSEs.
In an ASX statement released on 21 December 2018, IOOF said it already holds separate board meetings to consider the interests of both its RSE and RE functions.
Another licence condition requires IOOF Holdings to establish a dedicated business function to support its three APRA regulated entity subsidiaries (AREs) including IOOF Investment Management (IIML), Australian Executor Trustees (AET) and IOOF Ltd.
IOOF said these subsidiaries have already moved their boards to a majority of independent directors and an independent chair.
IOOF acting chairman Allan Griffiths said: "We continue to focus on addressing the governance issues raised by APRA in the interests of all stakeholders in an orderly and collaborative manner. We look forward to continue working constructively with APRA to address and complete the remaining initiatives."
The wealth manager made it clear its December 21 agreement with APRA relates only to the licence condition matters raised in APRA's Show Cause Notice.
"Given the overlap between those matters and the other matters currently before the Federal Court, the AREs have not responded in detail to APRA's preliminary views set out in the Show Cause Notice," IOOF said.