The prudential standard sets out minimum requirements for RSE licensees in determining the fitness and propriety of individuals to hold positions of responsibility. ?Yes. Now, this is a standard that would be – or is or was drafted by APRA?That’s correct. And is this the standard that would set out the principles in relation to fitness and propriety?Yes. And then if we go to page .0268?Yes. And paragraph 6?Yes. And we see that there’s a requirement that: An RSE licensee have a fit and proper policy. ?Yes. And if a – if an entity didn’t have a fit and proper policy, assuming that occurred, what is it that APRA could do in that event?Well, we would require them to establish a fit and proper policy. And is that a that you have under the Act, to give a direction to them to do so?I believe so. And then if they didn’t do it, what would happen?I – I’m not a lawyer. I understand that we would be able to take some sort of legal enforcement action. And if we then go over to page .0271?Yes. And this is setting out what the criteria are to determine if a responsible person is fit and proper?Yes. And it appears to be, perhaps, reflecting what’s in the SIS Act, expressed at a very general level?That’s correct. And if an entity’s criteria for assessing a fit and proper person was inadequate, then APRA could do something?Yes. We would be able to – again, depending on the level of deficiency, either recommend that they make improvements to their particular policy, or if we felt that it was completely adequate, that would be a stronger requirement for them to do so. And then if we go to page .0273?Yes.
Yes. The trustee asking the right questions is one thing. If the flow of information to the trustee is controlled by other parts of the business, how can the trustee know what question to ask?I – I think it’s a practical reality that a lot of the information that comes to the trustee necessarily comes from their service providers, and in a retail group they would be related party service providers. I don’t think that means that the trustee can’t, therefore, ask for different information or more information, or obtain information from other parties, or require independent review of the information that is provided to them in order to – to form and make better decisions. Indeed, our expectation – excuse me, Commissioner. No, finish?Would be that trustees would take some of those steps to satisfy themselves that they were getting the right information and asking the right questions. How can APRA form any judgment whether the trustee is doing its job properly?Through our supervision activities and our engagement with the – the trustee and other parties within the operations of the trustee itself and their material service providers, and also through our review of the information that the trustee itself is looking at and our assessment as to whether that is adequate and – and sufficient to enable them to fulfil their duties. Yes. Is anything arising, Mr Hodge? MR HODGE: No, Commissioner, although I would just like to follow on with one other question THE COMMISSIONER: Yes. MR Or one other set of questions. Can we bring up paragraph 253 of Ms Rowell’s statement. That’s on page 38?Yes. So in this paragraph you’re expressing the position of APRA which is it strongly supports certain amendments which are going to expand APRAs powers to be able to give directions to trustees?That’s correct. And it will be possible, if the Bill passes, for APRA to direct trustees to make changes to the systems, business practices, or operation?That’s correct. And, indeed, in subparagraph (g): To do, or refrain from doing, anything else in relation to the affairs of the licensee, the funds for which that licensee is the trustee or any subsidiary. ?Yes.