Superannuation Industry (Supervision) Act 1993

PART 16A - APRA ' S POWERS TO ISSUE DIRECTIONS  

Division 1 - General powers to issue directions  

SECTION 131DA   APRA MAY GIVE DIRECTIONS IN RELATION TO THE CONDUCT OF A CONNECTED ENTITY OF AN RSE LICENSEE  

131DA(1)    
APRA may give an RSE licensee a direction of a kind mentioned in subsection (5), or a direction to cause a connected entity of the RSE licensee to do or not to do something of a kind mentioned in subsection (5), if APRA has reason to believe that:

(a) a connected entity of the RSE licensee has contravened a provision of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(iv) the Financial Sector (Collection of Data) Act 2001 ; or

(b) a connected entity of the RSE licensee is likely to contravene a provision mentioned in paragraph (a); or

(c) the direction relates to a connected entity of the RSE licensee and is necessary in the interests of beneficiaries of a registrable superannuation entity of the RSE licensee; or

(d) a connected entity of the RSE licensee is, or is about to become, unable to meet the connected entity ' s liabilities; or

(e) there is, or there might be, a material risk to the security of the assets of a connected entity of the RSE licensee; or

(f) there has been, or there might be, a material deterioration in the financial condition of a connected entity of the RSE licensee; or

(g) a connected entity of the RSE licensee is conducting the entity ' s affairs in an improper or financially unsound way; or

(h) a connected entity of the RSE licensee is conducting the entity ' s affairs in a way that may cause or promote instability in the Australian financial system; or

(i) a connected entity of the RSE licensee is conducting the entity ' s affairs in a way that may cause it to be unable to continue to supply products or services to the RSE licensee, or a registrable superannuation entity of the RSE licensee; or

(j) the direction relates to a connected entity of the RSE licensee and the failure to issue a direction would materially prejudice the interests of beneficiaries of a registrable superannuation entity of the RSE licensee.

131DA(2)    
However, APRA can only make a direction under subsection (1) as a result of a ground referred to in paragraph (1)(d), (e), (f), (g), (h) or (i) if APRA considers that the direction is reasonably necessary to ensure that the RSE licensee ' s duties as trustee of a registrable superannuation entity are properly performed.

131DA(3)    
APRA may give a connected entity of an RSE licensee a direction of a kind mentioned in subsection (5) if:

(a) APRA has given the RSE licensee a direction under subsection (1) because one or more of the grounds referred to in that subsection have been satisfied in respect of the connected entity; or

(b) APRA may give the RSE licensee a direction under subsection (1) because one or more of the grounds referred to in that subsection have been satisfied in respect of the connected entity.

131DA(4)    
APRA cannot give a direction under subsection (3) to a connected entity of a kind specified in regulations (if any) made for the purposes of this subsection.

131DA(5)    
APRA may give a direction to do one or more of the following:

(a) to comply with the whole or a part of:

(i) this Act; or

(ii) the regulations; or

(iii) the prudential standards; or

(iv) the Financial Sector (Collection of Data) Act 2001 ;

(b) if the connected entity is a body corporate:

(i) to remove a responsible officer of the entity from office; or

(ii) to ensure that a responsible officer of the entity does not take part in the management or conduct of the business of the entity (including any business the entity conducts in relation to a registrable superannuation entity of the RSE licensee) except as permitted by APRA; or

(iii) to appoint a person as a responsible officer of the entity for such term as APRA directs;

(c) to order an audit of:

(i) the affairs of the connected entity; or

(ii) the affairs of a registrable superannuation entity of the RSE licensee;

at the expense of the connected entity, by an auditor chosen by APRA;

(d) to:

(i) remove from office an auditor of the connected entity, or of a registrable superannuation entity of the RSE licensee; and

(ii) appoint another auditor to hold office for such term as APRA directs;

(e) to order an actuarial investigation of the affairs of a registrable superannuation entity of the RSE licensee, at the expense of the connected entity and by an actuary chosen by APRA;

(f) to:

(i) remove from office an actuary of a registrable superannuation entity of the RSE licensee; and

(ii) appoint another actuary to hold office for such term as APRA directs;

(g) not to borrow any amount;

(h) not to pay or transfer any amount or asset to any person, or create an obligation (contingent or otherwise) to do so;

(i) not to undertake any financial obligation (contingent or otherwise) on behalf of any other person;

(j) not to discharge any liability of one or more of the following:

(i) the connected entity;

(ii) a registrable superannuation entity of the RSE licensee;

(k) to make changes to the connected entity ' s systems, business practices or operations (including the connected entity ' s systems, business practices or operations in relation to a registrable superannuation entity of the RSE licensee);

(l) to do, or refrain from doing, anything else in relation to the affairs of:

(i) the connected entity; or

(ii) a registrable superannuation entity of the RSE licensee.

131DA(6)    
A direction under paragraph (5)(h) not to pay or transfer any amount or asset does not apply to the payment or transfer of money pursuant to an order of a court or a process of execution.

131DA(7)    
Without limiting the generality of subsection (5), a direction referred to in a paragraph of that subsection may:

(a) deal with some only of the matters referred to in that paragraph; or

(b) deal with a particular class or particular classes of those matters; or

(c) make different provision with respect to different matters or different classes of matters.

131DA(8)    
The direction may deal with the time by which, or period during which, it is to be complied with.