Last week the prudential regulator has given directions to companies for failing to meet their compliance obligations.
However, the prudential regulator said that they recognise the progress that the entity has made the towards meeting the conditions.
IOOF and its subsidiaries have taken steps to implement and Office of the Superannuation Trustee but have failed to meet the time frame of the end of the March.
Following completion of a show cause process, APRA has issued directions to IIML and AET to comply with the dedicated business function condition by a new deadline of 30 June 2019. Failure to comply with a direction is an offence under section 131DD of the SIS Act and may attract a financial penalty.
Section 131DD SIS powers is concerned with non-compliance direction and reads:
Failure to comply with a direction given to an RSE licensee--failure by the RSE licensee
(1) A person commits an offence if:
(a) the person is an RSE licensee or a member of a group of individual trustees that is an RSE licensee; and
(b) a direction is given to the RSE licensee under this Division; and
(c) the RSE licensee does, or fails to do, something; and
(d) doing, or failing to do, the thing results in a contravention of the direction.
According to the release that went out this week this is the first time that the Australian Prudential Regulation Authority (APRA) is using their broader powers under the Superannuation Industry Supervisions ACT (SIS ACT) that came the came through last month from parliament.
The SIS Powers
The new powers which were recommended by Commissioner Kenneth Hayne in the Final Report from the Roya Commission into Banking Superannuation and the Financial Sector, allows the regulator to take prudential action against trustees and their directors for breaching their obligations
APRA Deputy Chair Helen Rowell chair said during release in in early April that previously the regulator could only direct a superannuation trustee after a contravention of the law.
Rowell said at the time:
The new civil penalties that may be imposed on trustees and directors for breaches of their section 52 and 52A duties will attract both civil and criminal consequences. This, combined with the broader directions power, gives APRA much greater leverage to influence trustee behaviour from the outset and to push trustees to meet their obligations to members under the law.