ASIC confirms it is investigating investment switching by super fund execs

The manner in which superannuation fund trustees and executives moved money around in investment switching in the volatile early weeks of the COVID-19 pandemic is being actively examined by the Australian Securities and Investments Commission (ASIC).

The regulator has confirmed that it is examining information provided to the House of Representatives Standing Committee on Economics focused on how much investment switching took place in the period which is generally regarded as having extended from March through to the end of April.

Superannuation funds have confirmed that, in some instances, fund executives and trustees switched hundreds of thousands of dollars but most are insisting that no rules were breached.

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Answering a question on notice from the Parliamentary Joint Committee on Corporations and Financial Services, ASIC spelled out its approach stating that before it actually exercised its compulsory information gathering powers it was examining publicly available information, including written answers provided by superannuation funds.

“We have been examining publicly available information, including the written answers provided by superannuation funds to the House of Representatives Economics Committee concerning switching activity by trustees and senior executives following unlisted asset revaluations, and the funds’ conflict management policies,” ASIC said.

“The information provided by funds to the Committee is helping inform ASIC’s further investigations.”

ASIC said it had also obtained intelligence from the Australian Prudential Regulation Authority (APRA) under information sharing arrangements.

“Our work is at a preliminary, information gathering stage and it is therefore not possible for us to comment on the likely timeline of our work. Generally, for a case relating to a breach of trustee duties, it would take nine months, from the date a formal enforcement investigation begins, to commence an action for civil or criminal proceedings,” ASIC said.

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