Welcome to the latest issue of the KHQ Super Alert. This week, APRA released the choice product heatmap and ASIC released updated guidance on breach reporting.
ASIC – Breach reporting guidance updated
On 27 April 2023, ASIC issued a media release announcing Regulatory Guide 78 Breach reporting by AFS licensees and credit licensees (RG 78) had been updated. The updates are aimed at clarifying ‘aspects of the existing guidance’ and providing ‘new guidance in response to operational issues that have arisen since implementation’.
According to ASIC, the updates include:
- ‘clarifying the circumstances in which licensees may group multiple reportable situations into one report to ASIC’;
- ‘new guidance on the information to include when licensees describe a reportable situation’; and
- ‘new guidance for licensees on ASIC’s expectations when licensees are providing updates related to a reported breach’.
ASIC announced that it is ‘also making minor changes to the prescribed form for lodging reportable situations’ which ‘will be implemented on 5 May 2023’. These changes are intended to ‘clarify how some questions should be answered and point licensees to…RG 78’.
Click here for details.
APRA – Choice product heatmap released
On 26 April 2023, APRA issued a media release announcing the release of the choice product heatmap (Choice Heatmap) and an accompanying insights paper. In the media release, APRA revealed that ‘[t]he Choice Heatmap covers 163 products’ and represents ‘$292 billion worth of members’ benefits’.
According to APRA, the Choice Heatmap shows ‘that [c]hoice products closed to new members are more likely to underperform and have higher fees [than] those that are open’, with two-thirds of these options having ‘poor or significantly poor performance relative to the heatmap benchmarks’.
APRA Deputy Chair Margaret Cole indicated that ‘APRA’s supervision of poorly performing [c]hoice products will intensify, and trustees can expect even greater scrutiny of their product offering. Trustees with products that are underperforming or have unjustifiably high fees – or both – will need to explain why they haven’t already moved their members to products with better performance and better fee structures’.
Click here for details.
This alert was written by Kiara Leslie (Lawyer), Sanela Osmanovic (Senior Associate), and Natalie Cambrell (Director).
Want KHQ Super Alerts delivered straight to your inbox each week? Click here to subscribe.
