The Australian Prudential Regulation Authority has begun asking super funds for regular updates on their members’ switching activities and whether or not they have had to freeze redemptions from any member investment choice options.
The chief executive of Cbus, David Atkin, said his fund had no need to freeze redemptions but the scheme was happy to comply with APRA’s increased demands for information.
Some funds have reported that APRA is requesting they complete a spreadsheet detailing amounts of money held in each asset class, and to email it to the regulator on a weekly basis from Friday, November 7.
The Association of Superannuation Funds of Australia notified members last week that it was lobbying APRA for further relief from the requirement that trustees must act on redemption requests from member investment choice options within 30 days.
The chief executiveof Queensland-based industry fund BUSS(Q), David O’Sullivan, said his fund had not seen a request for weekly switching updates, but he pointed out that APRA’s approach sometimes differed slightly from region to region.
"We did receive a letter last month from them, asking about our exposure to CDOs [collateralised debt obligations]. A year ago that might have been a good one to get. They weren’t really asking the question in the right way – a manager of ours might have just bought a CDO at 2 cents in the dollar and made a cracker of an investment, which is very different from someone who paid full freight two years ago for a security that turned out to be toxic," O’Sullivan said.
An APRA spokesperson confirmed the regulator was "interested in the experience of funds in relation to member investment choice" and was in regular contact on the issue.