Issue 828, 12 October 2021
In this issue:
- MySuper product heatmap: APRA FAQs
- APRA Superannuation Data Transformation: FAQs and change log
- Breach reporting reforms: ASIC update
MySuper product heatmap: APRA FAQs
APRA has released a set of frequently asked questions (FAQs) in relation to the MySuper product heatmap due to be released in December.
The FAQs confirm that the heatmap will “show the outcomes being delivered to MySuper members in the areas of investment performance and fees and costs” and “provide indicators of trends in a trustee’s operations relevant to the sustainable delivery of member outcomes”.
Importantly, the FAQs make it clear that the data used by APRA to derive the heatmap will be ‘locked down’ on 29 October. Any updated data reported to APRA after 29 October will not be included in the December 2021 version of the heatmap. Rather, it will be reflected in the following version which is planned for release in December 2022.
APRA Superannuation Data Transformation: FAQs and change log
As reported in ASFA Action issue 826, APRA recently granted an extension until 28 October for lodgment of a number of data reporting forms under the Superannuation Data Transformation (SDT) project.
APRA has now published additional frequently asked questions (FAQs) to provide further guidance to registrable superannuation entity (RSE) licensees on the reporting standards for Phase 1 of the SDT project.
APRA has also:
- made an update to FAQ 1.02 to clarify the next reporting period due date for SRS 705.1 Investment Performance and Objectives
- published a change log for the SDT APRA Connect artefacts, reflecting the differences between the draft and final reporting standards. The APRA Connect artefacts and change log are available on the APRA website.
Breach reporting reforms: ASIC update
As reported in recent issues of ASFA Action, new breach reporting obligations came into effect on 1 October for Australian Financial Services licensees — including superannuation trustees. The reforms were part of the Government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (see ASFA Action issues 823, 817 and 788 for background).
ASIC has provided ASFA with an update on its guidance in relation to the reforms, including in relation to the continued operation of the dual APRA-ASIC breach reporting framework. ASIC has noted that:
- superannuation trustees will need to comply with breach reporting regimes under the Superannuation Industry (Supervision) Act 1994 and the Corporations Act 2001. From 1 October, trustees have 30 days to report significant breaches to APRA and reportable situations to ASIC. ASIC recently published revised guidance in Regulatory Guide RG 78 Breach reporting by AFS licensees and credit licensees and Info Sheet 259 Breach reporting by AFS licensees-complying with the notify investigate and remediate obligations to help licensees comply with their obligations.
- reforms that created the new financial service ‘provide a superannuation trustee service’ (introduced from 1 January 2021 as part of the response to the Royal Commission) will likely broaden the scope of situations that may be notifiable to ASIC under the enhanced framework.
- there might be a period of transition as industry finalises implementation of additional compliance measures to meet their enhanced obligations and will take a reasonable approach in the early stages of the reforms. However, ASIC expects that the industry will be using their best efforts to comply with their obligations and will act where it finds trustees are not acting in good faith or where it detects conduct that is causing actual harm.
- the reforms still enable dual reporting so trustees will be able to report to both regulators by submitting one report to APRA. Trustees will be able to utilise the dual reporting framework through APRA’s website from 23 October. In the interim, ASIC-related reports can be lodged through the ASIC Regulatory Portal. If trustees do not have all the information requested by the portal at the time of lodgment, trustees should use their best estimates. Trustees utilising the dual reporting function will need to ensure their reports contain all the information required under the new prescribed form requirements (a cv file containing these will be available on the APRA website and may be uploaded through the APRA portal).
- measures are in place to increase efficiency in recognition of the likely increased reporting volume — for example, allowing lodgment of one report covering multiple reportable situations arising from a single, specific root cause.
- trustees should familiarise themselves with the revised RG 78 and Info Sheet 259 and (if they have not already) should also be considering transitional arrangements, in particular for breaches already on foot when the new regime took effect
ASIC advises that it will shortly update its website with further information for trustees on breach reporting.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.