ASIC’s court action against a major industry fund is the tip of the iceberg when it comes to funds in the space actively discouraging members from rolling their money over to a competitor, according to evidence given at a parliamentary committee.
Appearing at a recent hearing of the House economics committee, ASIC commissioner Danielle Press said the case against industry fund Rest, which relates to the fund’s alleged actions to discourage members from transferring money to another super fund, was one of a number of similar cases among industry funds.
“As you would appreciate we don’t necessarily take action against every fund that participates in the same behaviour – the deterrent effect is important here and we wouldn't have enough funds to take every action to court,” Ms Press told committee chair Tim Wilson.
“I can’t tell you whether there is an active investigation underway, but we have looked at a number of these and concluded the Rest case was the most appropriate for us to take to court.”
Mr Wilson questioned Ms Press further around whether the corporate regulator was aware that “there are industry funds engaged in behaviour trying to prevent members from using their own money”.
“You’re not taking action because you don’t think they’re as concrete as Rest?” he asked.
“Each time we take an action in court we have to weigh up how extensive the behaviour is and whether there is a deterrent effect,” Ms Press said.
“There are many things we take into account.”
Ms Press said she was aware of “historical conduct” of a similar nature in the industry fund sector.
“I am aware of historical conduct but I’m not aware of any current conduct,” she said.
“I would need to get advice from our chief legal officer on whether we could provide that – we don’t normally comment on cases that are closed.”
Ms Press said in historical cases, the regulator would have “had conversations” with the offending funds and “expressed our desire for that conduct to have changed”.
“In the cases I’m aware of, that conduct has changed,” she said.
“We can take on notice whether we have been made aware of any blockage, but I’m not aware of that.”
ASIC deputy chair Karen Chester confirmed that the regulator did “still have investigations underway that relate to historical matters” regarding super funds.
“Our enforcement team wants to be kept very busy when it comes to super, particularly when it comes to preventing members from consolidating accounts,” Ms Chester said.
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