APRA asked to explain mergers with under-performing funds

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.

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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.

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