Welcome to the last issue of the KHQ Super Alert for 2024 which contains a few brief developments from the regulators. We have enjoyed bringing you the latest regulatory news every week and we look forward to continuing the newsletter in 2025! We’ll be back with more Super Alerts after Australia Day.
We’d like to take this opportunity to thank our clients for the work you’ve involved us in this year and more broadly to our friends and colleagues in the industry who we enjoy dealing with. Thank you for the feedback we receive on our Super Alerts too – it is much appreciated. We hope that you are all able to enjoy a break of some sort over the festive season.
Treasury – First ‘Regulatory Initiatives Grid’ published
On 19 December 2024, Treasury published the first edition of its ‘Regulatory Initiatives Grid’. As previously announced in our Super Alert of 15 March 2024, the Government proposed that this grid would help financial services businesses engage with regulators more effectively. The grid can be viewed as an interactive dashboard, Word document, PDF report or Excel workbook. It ‘lists announced and publicised regulatory reform priorities and initiatives that will materially affect the financial sector over the next 2 years’.
In an associated media release, the Treasurer, Assistant Treasurer and Assistant Minister for Competition, Charities and Treasury announced that the grid summarises key initiatives from agencies such as ASIC, APRA, the ATO and AUSTRAC. Its purpose is to help ‘businesses navigate upcoming changes to the regulatory environment and help them plan with a greater level of confidence and certainty’. The Government intends to update the grid twice a year.
Click here and here for details.
APRA – Findings from valuation governance and liquidity risk management review
On 17 December 2024, APRA ‘released [its] findings from a review into superannuation trustees’ progress in implementing enhanced valuation governance and liquidity risk management requirements’. The findings are expected to assist ‘trustees in aligning their practices with Prudential Standard SPS 530 Investment Governance’, especially ‘in relation to the use of independent external asset valuations and the effective management of potential conflicts of interest in valuation processes’.
APRA’s review was conducted in December 2023 and it ‘involved trustees with a range of different asset sizes and business models’. The review highlighted that ‘while trustee capability and approach have generally improved since APRA’s last unlisted asset review in 2021, a significant proportion of trustees still displayed material gaps in key areas’ relating to unlisted asset valuation governance and liquidity risk management. For example:
- ‘In relation to unlisted asset valuation governance, particular weaknesses were observed in the areas of board oversight and conflict of interest management, revaluation frequency and triggers, valuation control, and fair value reporting’; and
- ‘In relation to liquidity risk management, particular weaknesses were observed in the areas of liquidity stress trigger frameworks, unlisted asset liquidity risks and liquidity action plans’.
APRA Deputy Chair Margaret Cole clarified that ‘APRA expects trustees to review these findings carefully and formulate appropriate remediation plans where needed…[as] APRA will not hesitate to take further action where necessary’.
Click here for details.
ASIC – Dashboard of regulatory costs and summary of variances released
On 16 December 2024, ASIC ‘published its annual dashboard outlining regulatory costs by sector and subsector for 2023-24 under the ASIC industry funding model’ and ‘the variances between its estimated and actual costs for subsectors’. ASIC explained that estimated costs were published in ASIC’s ‘2023-24 Cost Recovery Implementation Statement (CRIS) in July 2024’ (see our Super Alert of 12 July 2024) and that ‘ASIC’s 2023-24 industry funding levies…were published on 8 November 2024’ (see our Super Alert of 15 November 2024 for further information).
It also clarified that ‘ASIC determines where it directs its regulatory efforts and resources based on our ongoing assessment of the threats and harms across the industries we regulate. As a result, levies can be difficult to predict and can vary over time’.
Click here for details.
APRA – Update to APRA Connect Taxonomy Artefacts webpage
On 16 December 2024, APRA updated its ‘Connect Taxonomy Artefacts webpage with draft superannuation artefacts’, which ‘are provided to help entities prepare data for submission on APRA Connect’. APRA explained that ‘[t]he artefacts include the data dictionary, validations, reporting taxonomy and XSD (to validate files)’ and that they ‘should be used in conjunction with the relevant reporting standard’.
Click here for details.
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