The Australian Prudential Regulation Authority (APRA) has released a consultation package on governance arrangements for APRA-regulated superannuation trustees.
This package proposes amendments to APRA’s governance prudential framework in light of the Government’s proposed legislative amendments to require boards of registrable superannuation entities (RSE) licensees to have at least one-third of independent directors, including an independent chair.
The package follows APRA’s letter of 26 June 2015, Governance requirements for RSE licensees: proposed amendments, which sought comment on APRA’s preliminary proposals to supplement the government’s proposed legislative amendments.
Submissions in response to APRA’s June letter raised concerns about the lack of certainty in relation to the definition of independence, given substantial elements of the definition were, at the time, proposed to be defined in APRA’s prudential standards.
The package released reflects this updated government position and the responses to APRA’s June letter. It proposes:
- Amendments to Prudential Standard SPS 510: Governance and to Prudential Practice Guide: SPG 510 Governance.
- A new draft Prudential Standard SPS 512: Governance Transition and Prudential Practice Guide: SPG 512 Governance Transition.
Commenting, APRA member Helen Rowell said: ‘The proposed changes support sound governance practices by RSE licensees. APRA’s proposed updates to its prudential framework will support RSE licensee boards as they move to this new governance environment.’
Once APRA receives submissions on the proposed changes to the governance arrangements, APRA will review those submissions, and subject to the passage of the proposed legislative amendments, expects to release the final prudential standards and practice guides in December 2015 with the standards taking effect on the date they are registered on the Federal Register of Legislative Instruments.
APRA invites submissions on the draft prudential standards and prudential practice guides by 23 October 2015.
For more information, visit the APRA website.
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