The new requirements require funds to disclose information about the identity, value and weightings of their investments to be transparent with members who can see where their retirement savings are being invested.
“This information will make it easier for members to compare products and identify the most suitable fund for them,” Treasurer Josh Frydenberg said in a statement.
“Reviews of the superannuation system have found that superannuation portfolio disclosure is unduly opaque, does not meet global best practice and that requiring the disclosure of portfolio holdings would provide greater transparency and allow members to understand where their superannuation is invested.”
Funds must submit the first report of their holdings by 31 March 2022 followed by submissions every six months after that date.
Peak superannuation industry body, the Association of Superannuation Funds of Australia (ASFA), applauded the news, saying it will achieve transparency for clients and recognise potential effects of investment outcomes.
“The regulations released today enhance transparency to consumers while recognising the importance of investment considerations around disclosure, to ensure that Australian super funds continue to be able to deliver great investment returns for their members,” ASFA, chief executive Dr Martin Fahy, said.
Mr Frydenberg noted that during the consultation phase, which commenced back in August, it was “apparent” that super funds have large exposures to derivatives.
“Given Australia’s superannuation funds have now become a systemically important part of our financial system, it is timely to ensure policymakers and regulators have a sound understanding of the extent and nature of the use of derivatives, and any implications for the operation of our financial system that could arise from these exposures,” he said.
To address this, Mr Frydenberg has tasked the Council of Financial Regulators (CFR) to prepare a report on the matter.
Dr Fahy said he is pleased government has recognised that derivatives and the holding valuation of unlisted assets should be disclosed that he believes will help ensure that local funds can continue to compete on an “even footing” in global institutional investment markets.
