The Government should create a facility to enable a superannuation trustee to check whether an individual who is under consideration for an accountable person role is deregistered, the Australian Institute of Superannuation Trustee (AIST) believes.
In its submission to the Financial Accountability Regime (FAR) Bill 2021, AIST proposed the facility be made available using the regulator’s registry of accountable persons, and based on a similar approach to the corporate regulator’s banned and disqualified search tool.
“Such a system would reduce unnecessary effort and cost for entities covered by FAR. It would also minimise the regulator rejecting an accountable person candidate that had already been deregistered,” it said.
“Linkages with prudential authorities in countries like the UK, US and Canada may also be possible which would widen the effectiveness of such checks.”
The submission also noted the scope of the ministerial powers be clarified and narrowed and the rules should be reduced with the aim of creating greater clarity and certainty of FAR’s application to the super sector and prescribed roles within the sector.
“At the very minimum, details about the minister rules should be made available for consultation for a period of time that allows proper analysis and feedback,” the submission said.
“The profit-to-member superannuation sector represents more than $1.5 trillion in investment and AIST believes that it is not unreasonable that it be afforded a more predictable framework for accountability.”
The advocacy group also called for more clarity on how the FAR was expected to apply to the profit-to-member sector given the corporate structure was different to authorised deposit taking institutions (ADIs) and responsible superannuation entities in the retail sector.
“The ‘worked example’ provided on page 20 of the explanatory memorandum seeks to light on how FAR is expected to apply to the profit to member sector and AIST appreciates that this example has been included on how FAR will apply to significant related entities,” it said,
“While this is a step forward, it remains unclear how the materiality thresholds will work in practice for our sector.
“It would be helpful if additional commentary and clarity could be provided, without this, confusion will remain and there is a potential that entities intended to be captured under the regime will be unintentionally excluded and vice versa.”