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Superannuation (prudential standard) determination No. 3 of 2024

Prudential Standard SPS 510 Governance

Superannuation Industry (Supervision) Act 1993

I, Clare Gibney, a delegate of APRA:
    (a) under subsection 34C(6) of the Superannuation Industry (Supervision) Act 1993 REVOKE Superannuation (prudential standard) determination No. 2 of 2023, including Prudential Standard SPS 510 Governance made under that determination; and
    (b) under subsection 34C(1) of the Act, DETERMINE Prudential Standard SPS 510 Governance in the form set out in the Schedule, which applies to all RSE licensees.
This instrument commences on 30 June 2024.

Dated:  3 June 2024

Clare Gibney
Executive Director
Policy and Advice Division

Interpretation

In this instrument:

APRA means the Australian Prudential Regulation Authority.

RSE licensee has the meaning given in section 10(1) of the Act.

Prudential Standard SPS 510 Governance
Objectives and key requirements of this Prudential Standard

This Prudential Standard sets out minimum foundations for good governance of an RSE licensee. Its objective is to ensure that an RSE licensee's business operations are managed soundly and prudently by a competent Board, which can make reasonable and impartial business judgements in the best financial interests of beneficiaries and which duly considers the impact of its decisions on beneficiaries.

The ultimate responsibility for the sound and prudent management of an RSE licensee's business operations rests with its Board of directors.

It is essential that an RSE licensee has a sound governance framework and conducts its affairs with a high degree of integrity. A culture that promotes good governance benefits all stakeholders of an RSE licensee and helps to maintain public confidence in the entity.

The governance of an RSE licensee builds on these foundations in ways that take account of the size, business mix and complexity of the RSE licensee's business operations.

The key requirements of this Prudential Standard are that:

                    the Board must have a governance framework which includes, at a minimum, the Board's charter (or equivalent document) and policies and processes that achieve appropriate skills, structure and composition of the Board;

                    the Board must have a written policy which sets out requirements relating to the nomination, appointment and removal of directors that support appropriate Board composition and renewal on an ongoing basis;

                    a Board Audit Committee must be established; and

                    an RSE licensee must have a dedicated internal audit function.

Authority
     1. This Prudential Standard is made under section 34C of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

Application
2.             This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees) under the SIS Act.[1]
3.             All RSE licensees must comply with this Prudential Standard in its entirety, unless otherwise expressly indicated.
4.             For the purposes of this Prudential Standard, a reference