The Australian Prudential Regulation Authority (APRA) has been asked to explain how it is handling mergers which involve under-performing funds.
The regulator has been put on notice by Tasmanian Greens Senator Peter Whish-Wilson to explain its approach to mergers involving under-performing funds, including any examples which might have already occurred.
Whish-Wilson’s questioning took place during Senate estimates with APRA’s response expected to be gazetted next week.
Whish-Wilson asked: “Has APRA encountered examples where a lesser performing fund is seeking a merger partner, but is unable to find a willing successor fund?”
“Have APRA been approached by potential successor funds seeking advice or relief in order to receive underperforming assets in a merger with a lesser-performing fund?”.
He then asked what guidance APRA would offer to successor funds and lesser-performing funds which were considering a merger.
“Has APRA considered contingency measures to protect the value of (members) assets in underperforming funds that are unlikely to find a willing merger?” Whish-Wilson asked.