Australia's prudential regulator finds gaps in super fund valuation, liquidity practices

(Reuters) - Australia's prudential regulator said on Tuesday its review found deficiencies in valuation governance and liquidity risk management among superannuation trustees, urging immediate remediation to meet Prudential Standard SPS 530 Investment Governance (SPS 530).

The Australian Prudential Regulation Authority (APRA) found that while trustee capability and approach have generally improved since the last unlisted asset review in 2021, a proportion of trustees still showed material gaps in key areas.

Key weaknesses in unlisted asset valuation governance included board oversight, conflict of interest management, revaluation triggers, valuation controls and fair value reporting, APRA's review added.

"APRA will not hesitate to take further action where necessary to enforce the provisions of SPS 530 and related regulations, including the responsibilities of relevant accountable persons under the upcoming Financial Accountability Regime," APRA Deputy Chair Margaret Cole said.

The SPS 530 standard requires licensees to establish measurable investment objectives, conduct thorough due diligence, regularly assess investment performance and implement annual stress testing.

(Reporting by Roshan Thomas in Bengaluru; Editing by Shreya Biswas)

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