APRA has confirmed that it will amend the Risk Management Declaration required under paragraph 33 of SPS 220 Risk Management so that it will include the concept of “materiality”, as required under APRA Prudential Standard CPS 220 Risk Management that applies to ADIs, general insurers and life companies.

APRA proposes to amend Attachment A so that it reads:

“For the purposes of paragraph 33 of this Prudential Standard, an RSE licensee’s risk management declaration must cover the following matters, confirming that in all material respects:”

  • the trustee has in place systems for ensuring compliance with all prudential requirements;
  • the systems and resources that are in place for managing and monitoring risks, and the risk management framework, are appropriate to the trustee, having regard to the size, business mix and complexity of the trustee’s business operations;
  • the trustee has assessed the risks of outsourcing any business activity, and is satisfied that the risks and relevant controls relating to these risks are appropriate to the trustee having regard to the size, business mix and complexity of the trustee’s business operations and the operational capabilities of the trustee itself;
  • the risk management and internal control systems in place are operating effectively and are adequate having regard to the risks they are designed to control;
  • the trustee has an RMS that complies with this Prudential Standard, and that the trustee has complied with each measure and control described in the RMS;
  • the trustee is satisfied with the efficacy of the processes and systems surrounding the production of financial information for each superannuation fund within its business operations;
  • the trustee has adequate reporting systems and internal controls supporting the preparation and reporting of accurate financial and statistical information to APRA; and
  • information provided to APRA accurately represents the transactions for the year and financial position at year end in accordance with the provisions of the SIS Act and Financial Sector (Collection of Data) Act 2001.