APRA consults on conflicts of interest guide for super funds

The Australian Prudential Regulation Authority (APRA) has today released for public consultation draft guidance on managing conflicts of interest for APRA-supervised superannuation trustees (known as Registrable Superannuation Entity (RSE) licensees).

A discussion paper and draft Prudential Practice Guide 521 Conflicts of interest (SPG521) have been prepared following earlier consultation with relevant government agencies and superannuation industry associations. APRA now seeks to consult more widely on this draft guide.

APRA Deputy Chairman Ross Jones said that although many of the issues contained in draft SPG521 had been referred to in a series of earlier guidance notes, APRA had decided to consolidate issues relating to conflicts of interest into one guide.

‘The draft guide provides practical guidance on the measures APRA regards as sound practice for an RSE licensee and its directors in respect of conflicts of interest, to satisfy their obligations under the Superannuation Industry (Supervision) Act 1993,’ he said.

‘It provides examples of trustee-specific conflicts and outlines issues for consideration in an RSE licensee’s conflicts of interest policy.’

The draft SPG521 complements guidance provided by the Australian Securities and Investment Commission to Australian Financial Services Licence (AFSL) holders by focussing on the governance of the RSE licensee, including those that do not hold an AFSL.

APRA invites interested parties to comment on the draft guide by30 April 2009.

The guide is available on the APRA website. 

APRA will be releasing further superannuation prudential practice guides shortly as part of a review of existing guidance notes and circulars and the consideration of new issues. Topics to be covered include use of reserves in super funds, risk management, adequacy of resources, and fitness and propriety.