Diversa rejects APRA findings, claims licence conditions are unwarranted
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More news: Diversa has rejected the findings prudential regulator APRA has made against it, and claimed the additional licence conditions are unwarranted.
"Diversa does not accept the conclusions that APRA has drawn from the Platform Thematic Review in respect of Diversa’s business, including APRA’s conclusions about Diversa’s investment onboarding processes, investment option monitoring and reporting, and management of conflicts of interest," a spokesperson said in a statement to Capital Brief.
"For these reasons Diversa does not consider that the imposition of the additional licence conditions is necessary or warranted in the circumstances."
Despite disagreeing with APRA's findings, Diversa said it did recognise the regulator's broader concerns about superannuation platforms.
"Accordingly, Diversa is committed to working with APRA to demonstrate Diversa’s robust investment governance and provide assurance to APRA in relation to Diversa’s current processes and practices and to discharge Diversa’s obligations under the additional licence conditions."
APRA slaps additional licence conditions on Diversa
The news: APRA has imposed additional licence conditions on Diversa Trustees Limited, the trustee for 10 superannuation entities with approximately 291,000 member accounts and $15 billion under management, to address prudential concerns.
The prudential regulator said it had identified deficiencies in Diversa's onboarding processes, monitoring and reporting of investment options, and its management of conflicts of interest.
Specifically APRA said it had become concerned with the adequacy of Diversa's operational due diligence and application of its selection criteria when it came to new investment options.
Effective today, the new licence conditions require Diversa to appoint an independent expert to undertake separate reviews of the platforms' investment menus and governance frameworks. Diversa must also develop and implement an uplift plan to remediate identified issues, and review the suitability of its investment menus against its enhanced governance requirements.
The conditions will prevent Diversa from onboarding new high-risk investment options without following an enhanced due diligence program, engaging the oversight of an independent expert and providing an attestation that the investment option is in members' best financial interests.
What they said: “APRA has made clear our expectations around effective investment governance frameworks and practices, including in relation to onboarding and monitoring of investment options, to ensure they are in members’ best financial interests. Trustees play an important role curating the investment options made available to members and their decisions should be underpinned by robust governance," APRA deputy chair Margaret Cole said.
The context: APRA published a public letter on 7 October foreshadowing it was escalating supervision of platform trustees to lift investment governance and member outcomes practices.
It followed an ASIC investigation and enforcement action relating to the collapse of Shield and First Guardian managed investment schemes, which saw Macquarie, which acted as a trustee, pay back $321 million to investors.
The source: APRA
