- On 7 June 2013 the Treasury released the Lost and Unclaimed Superannuation Money Discussion Paper which "sets out current initiatives taken to reunite members with their lost superannuation accounts and seeks views on opportunities to enhance the existing suite of strategies and new strategies to both reduce the number of lost and unnecessary accounts and prevent the proliferation of these accounts into the future." Submissions are due by 28 June 2013.
- APRA has released two FAQs on the requirement for RSEs to meet the new operational standard on ORFR.
FAQ 61: Do I need to comply with the existing conditions on my RSE licence relating to capital once the prudential standard on ORFR takes effect on 1 July 2013?
RSE licensees that hold their ORFR target amount as at 1 July 2013 will not be required to comply with the capital conditions on their licences after 1 July 2013. If RSE licensees are relying on the transitional arrangements to build up their ORFR target amount, APRA confirms that those transitional arrangements end once their nominated ORFR target amount has been met for the first time.
FAQ 62: Can RSE licensee reduce its ORFR target amount to take into account another APRA financial requirement (relating to operational risk) imposed on an investment vehicle into which an RSE invests?
Yes, an RSE licensee may determine that investing in another entity reduces the RSE licensee's ORFR target amount. This may occur where the RSE licensee establishes that the other entity's APRA financial requirement will directly address certain operational risks that would otherwise be addressed by the RSE licensee's ORFR target amount in respect of the investing RSE. In order for an RSE licensee to decide such a reduction is appropriate, APRA would expect an RSE licensee to be able to demonstrate that it has:
- undertaken appropriate analysis of the coverage and availability of the other entity's APRA financial requirement for the purpose of any operational risks that would otherwise be covered by the RSE licensee's ORFR target amount in respect of the investing RSE;
- a thorough understanding of the other entity's risk management framework such that it is satisfied that the framework appropriately addresses the operational risks that would otherwise be addressed by the RSE licensee's ORFR target amount in respect of the investing RSE; and
- determined, via assessment, that the other entity adequately manages its operational risks.
However, APRA considers that typically, an RSE licensee would only be able to demonstrate the above when the other entity is within an RSE licensee's business operations, or closely related to the RSE licensee.
Refer to http://www.apra.gov.au/Super/Pages/Prudential-Standards-Frequently-Asked-Questions.aspx for the full text of these FAQs.