Document ID: chunk:federal_register_of_legislation:F2022L01492:body:0:p1
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Superannuation (prudential standard) determination No. 2 of 2022

Prudential Standard SPS 530 Investment Governance

Superannuation Industry (Supervision) Act 1993

I, Renée Roberts, delegate of APRA:

    (a)          under subsection 34C(6) of the Superannuation Industry (Supervision) Act 1993 (the Act) REVOKE Superannuation (prudential standard) determination No. 8 of 2012, including Prudential Standard SPS 530 Investment Governance made under that Determination; and

    (b)          under subsection 34C(1) of the Act, DETERMINE Prudential Standard SPS 530 Investment Governance in the form set out in the Schedule, which applies to all RSE licensees.

This instrument commences on 1 January 2023.

Dated:   18 November 2022

Renée Roberts
Executive Director
Policy and Advice Division

Interpretation

      In this Determination:

APRA means the Australian Prudential Regulation Authority.
RSE licensee has the meaning given in section 10(1) of the Act.

Prudential Standard SPS 530

Investment Governance

Objectives and key requirements of this Prudential Standard

The purpose of this Prudential Standard is to ensure that an RSE licensee, consistent with its obligation to act in the best financial interests of beneficiaries, prudently selects, manages and monitors investments on behalf of beneficiaries. An RSE licensee is required to implement a sound investment governance framework which focuses on managing relevant risks and returns.

The Board of an RSE licensee is ultimately responsible for having an investment governance framework for the selection, management and monitoring of investments that is appropriate to the size, business mix and complexity of the RSE licensee's business operations. The investment governance framework must include the investment strategies for the whole of each RSE, and for each investment option, as required by the Superannuation Industry (Supervision) Act 1993.

The key requirements of this Prudential Standard are that an RSE licensee must:

                    formulate specific and measurable investment objectives for each investment option, including return and risk objectives;

                    develop, maintain and implement an effective due diligence process for the selection of investments;

                    determine appropriate measures to monitor and assess the performance of investments on an ongoing basis;

                    review the investment objectives and investment strategies on a periodic basis;

                    develop, maintain and implement a comprehensive investment stress testing program;

                    formulate a liquidity management plan; and

                    develop, maintain and implement an effective valuation governance framework.

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

Application and commencement
    2.             This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees).[1]

    3.             This Prudential Standard commences on 1 January 2023.

Interpretation

    4.             Where this Prudential Standard provides for APRA to exercise a power or discretion, the power or discretion is to be exercised in writing.
Adjustments and exclusions

    5.             APRA may adjust or exclude a specific requirement in