Document ID: chunk:federal_register_of_legislation:F2012L02230:body:0:p2
Version: federal_register_of_legislation:F2012L02230
Segment Type: other
Provision Reference: 
Character Range: 2738–5837

Act 1993 (SIS Act).

Application
    2.             This Prudential Standard applies to 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.             This Prudential Standard applies for the purposes of section 52(2)(d)(iv) of the SIS Act.

    5.             This Prudential Standard commences on 1 July 2013.

Relevant duties and relevant interests
    6.             For the purposes of this Prudential Standard:

       (a)          a 'relevant duty' refers to any duty owed by the RSE licensee, or a responsible person of the RSE licensee[2], to beneficiaries or to any other person[3]; and

       (b)          a 'relevant interest' of an RSE licensee, an associate of the RSE licensee or a responsible person of the RSE licensee refers to any interest, gift, emolument or benefit, whether pecuniary or non-pecuniary, directly or indirectly held by the RSE licensee, the associate or the responsible person

    that the RSE licensee has determined to be relevant in accordance with paragraph 16.

    7.             For the purposes of this Prudential Standard, a reference to a 'conflict' is a reference to a conflict:

       (a)          between the duties owed by an RSE licensee, or a responsible person of an RSE licensee, to beneficiaries and the duties owed by them to any other person;

       (b)          between the interests of beneficiaries and the duties owed by an RSE licensee, or a responsible person of the RSE licensee, to any other person;

       (c)          between an interest of an RSE licensee, an associate of an RSE licensee or a responsible person or an employee of an RSE licensee, and the RSE licensee's duties to beneficiaries; and

       (d)          between an interest of an RSE licensee, an associate of an RSE licensee or a responsible person or an employee of an RSE licensee and the interests of beneficiaries.

The role of the Board and senior management
    8.             An RSE licensee must have a conflicts management framework, approved by the Board of an RSE licensee (the Board)[4], to ensure that the RSE licensee identifies all potential and actual conflicts in the RSE licensee's business operations and takes all reasonably practicable actions to ensure that they are avoided or prudently managed.

    9.             For the purposes of this Prudential Standard, the conflicts management framework is the totality of systems, structures, policies, processes and controls within an RSE licensee's business operations that identify, assess, mitigate, manage and monitor all conflicts.

    10.         The Board is ultimately responsible for the development and maintenance of the RSE licensee's conflicts management framework.

    11.         The Board must take all reasonable steps to ensure that all responsible persons and other employees of the RSE licensee clearly understand:

       (a)          the need to identify all potential