APRA issues IOOF super entities with ‘show cause’ notice

IOOF has confirmed to the Australian Securities Exchange (ASX) that it has received a “show cause” notice from the Australian Prudential Regulation Authority (APRA) with respect to the conditions placed on its license in December, last year and the status of its superannuation businesses.

In an announcement released to the ASX it said that license conditions had been imposed on its three APRA-regulated entity subsidiaries and the show cause notice related to the findings of an independent reviewer appointed by IOOF to help the company meet those conditions.

The company said that the APRA-regulated subsidiaries had received a show cause notice from APRA which reflected the Independent Reviewer’s report and also indicated that the regulator had formed the preliminary view that the entities had breached their license conditions relating to the Office of the Superannuation Trustee.

It said that APRFA had further informed the entities that it was considering issuing directions to comply with a completion data for the implementation and maintenance of the Office of the Superannuation Trustee of no later than the end of June, this year.

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The company said APRA had provided IOOF with an opportunity to respond to APRA’s preliminary view and the regulated entity boards had resolved not to dispute the notice.

“IOOF will respond to APRA and continue to take positive and constructive steps to implement and maintain the OST within the operations of the Group and is confident of meeting the required deadlines,” it said.

The ASX announcement said the independent reviewer had identified 76 actionable items to be addressed by the company and that 72 of those items had been completed or substantially completed with the remainder being still in progress.

It said that as at 31 march, the independent reviewer had observed that IOOF “demonstrating genuine commitment to governance uplift within the organisation and fostering a cultural environment that was consistent with this uplift”.

“Positive steps towards the implementation of an Office of the Superannuation Trustee have been taken and the foundations of this dedicated business function established,” it said.

It said the head of the OST had effectively engaged with appropriate governance functions across IOOF and the reviewer expected this to occur in an effective manner for the OST.