'Tensions' identified between FAR and other requirements

The chief executives of several superannuation funds sat down with ASIC and APRA for a roundtable to discuss key issues related to the Financial Accountability Regime (FAR).

As part of the discussions, the super fund chiefs emphasised the importance of sustainable behavioural and cultural changes in enhancing risk culture and resilience, noting "inherent tensions" between the FAR and other regulatory requirements.

"The CEOs called for regulatory simplification to address the challenges of working under multiple regimes. CEOs also highlighted the difficulties in capturing components of the business not regulated by FAR," notes from the roundtable said.

The regulators said it was important for trustees to identify related entities and understand their connections to effectively manage risks and fulfill RSE licensing obligations.

"Trustees should look to strengthen frameworks for FAR. CEOs and directors must engage in clear and challenging conversations, focusing on reasonable steps and defined role mandates to ensure accountability," the regulators said.

Despite concerns, the regulators said they were positive about the industry's preparedness for the FAR, particularly noting that funds had been proactive in identifying accountable persons ahead of the regime taking effect.

"The regulators emphasised the importance of FAR in strengthening accountability and governance, adding that the regime has fostered a better understanding of gaps and pain points across the industry," notes from the roundtable said.

"The CEOs recognised the importance of clear accountabilities and governance structures, discussed the critical role of governance in trustee groups, and the need for clear position descriptions, charters, succession and contingency planning.

"Where complexities and overlapping accountabilities were identified, restructuring has helped to ensure there is the right level of distribution and balance within the executive team."