Prudential regulation “flies in the face” of SMSFs: SPAA
Prudential regulation would be a poor fit for the individualist nature of self-managed super funds (SMSFs), the SMSF Professionals’ Association of Australia (SPAA) believes.
In a submission to the Financial System Inquiry (FSI), SPAA said the current approach to regulation, in which the Australian Taxation Office (ATO) has oversight, is “working well” and should not be changed in line with other superannuation products.
“SPAA does not support the prudential regulation of SMSFs because it is unsuitable for the nature of SMSFs where trustees are required to manage their own retirement savings,” SPAA senior manager, technical and policy, Jordan George, said.
“Prudential regulation is appropriate where money is being managed on behalf of another person that has little ability to influence the trustee responsible for managing their retirement savings.”
George said prudential regulation “flies in the face of” what SMSFs represent.
The submission followed calls for SMSFs to be regulated like other financial products.
SPAA noted Treasury similarly supported the ATO remaining as the sole compliance regulator of SMSFs.
“The SPAA FSI submission also acknowledged that the ATO’s SMSF regulatory activities have been effective to the extent that the vast majority of SMSF trustees are complying with the taxation and superannuation laws,” George said.
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