Fund Regulatory Update

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ACSI ESG governance standards updated

The Australian Council of Superannuation Investors (ACSI) has released updated Governance Guidelines on ESG issues and relevant expectations. The Guidelines are updated every two years and take effect from January, to provide companies with clarity regarding investor expectations on ESG issues. ACSI members are 34 institutional investors and asset managers. The 10th edition of the Governance Guidelines includes several updates, including:

  • First Nations peoples - highlights material financial risks as a result of poor engagement and cultural heritage practices, provides good practice

  • Climate - position is now integrated into guidelines

  • Sexual harassment - outlines expectations of companies to be proactive in preventing and responding to sexual harassment

  • Modern slavery - more detailed guidance

  • Diversity - reinforces the importance of diversity, including on the board of directors, and includes a section on discrimination and racism and a safe working environment

  • Virtual technology use at AGMs - support for the hybrid model for AGMs, guidelines for ensuring shareholder participation in meetings

ASIC cancels AFSL of Premier Wealth Management

The directors of Premier Wealth Management, Gerald Cummings and Craig Allen, have both been banned from providing financial advice, with the Australian financial services licence for their advisory firm cancelled. ASIC found the pair had engaged in misleading or deceptive conduct. The firm is being held responsible for failing to ensure its advisers were adequately trained and competent.

Cummings failed to give statements of advice after significant changes to client circumstances and basis for advice. Cummings also allegedly engaged in misleading or deceptive conduct regarding reviewing checklists of client files and had not implemented a system to refund clients who had been overcharged fees.

Allen is believed to have been involved in Cummings’ non-compliance regarding not providing statements of advice. Allen audited his own files and is alleged to have engaged in misleading and deceptive conduct regarding client checklists, and did not use an adequate system for refunding client overpayments.

ASIC sues OnePath after fees for no service

The Australian Securities and Investments Commission (ASIC) has commenced civil penalties against OnePath for allegedly charging $4 million in fees to over 18,000 superannuation fund members for advice it didn’t provide.

AMP enters enforceable undertaking with APRA

AMP’s superannuation trustees have entered into an enforceable undertaking (EU) with the Australian Prudential Regulation Authority (APRA) regarding past matters with remediation expected to cost $40-$45 million. AMP is to identify and address the cause of the breaches, rectify areas of concern, and remediate affected members. Enhancements must continue to be made to governance controls, risk management and processes for acting in members’ best interests.