Our overview of the ever-increasing regulatory reporting burden for AU Investment Funds

AlphaCert’s Independent Consultant, Stephen Huppert walks us through an overview of the regulatory challenges faced by Australian Funds. 

Australian fund managers and superannuation funds are subject to ever-increasing financial and regulatory reporting requirements. With each new extension from regulators, these entities invest valuable time and resources to guarantee compliance with the latest requirements, which is far from a simple task.

Superannuation funds have extensive reporting requirements that also impact third-party service providers, including fund managers.Superannuation funds report to several regulators, the primary ones being the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and the Australian Bureau of Statistics (ABS).

APRA is at the forefront of collecting a wide array of data and is well into its multi-year, multi-phase extensive Superannuation Data Transformation (SDT) project. As Phase 2 approaches completion, superannuation funds will be required to enhance their reporting efforts by submitting a greater volume of data with increased frequency and timeliness. These new reporting standards demand a more detailed approach, incorporating additional data fields and updated reporting templates to meet the evolving regulatory landscape. With a focus on Asset Allocation, Liquidity, Investment Exposure Concentrations, and Valuations, the SDT project aims to streamline reporting processes while ensuring accuracy and compliance for superannuation funds navigating through the complex regulatory environment. In addition to the increased reporting requirements, APRA has set forth new standards for data quality. Superannuation funds are now mandated to uphold the accuracy and completeness of the information they disclose. APRA emphasizes the implementation of stringent data validation protocols and procedures to detect and rectify any discrepancies in the reported data.

Furthermore, both APRA and ASIC are urging superannuation funds to bolster their data governance practices and enhance risk management strategies concerning the data included in regulatory filings and public disclosures. To meet these expectations, superannuation funds must allocate additional resources towards the collection, management, and reporting of data in a more efficient and effective manner.

There are various regulatory reporting initiatives beyond the SDT project that superannuation funds need to consider. For example, the requirements for sustainability reporting and disclosure obligations are rapidly evolving, driven partly by global initiatives and frameworks.

The solution is for superannuation funds to leverage technology solutions, such as a robust investment data management (IDM) platform. An IDM platform can help the fund better adapt to these evolving requirements. Such a platform can automate the generation of reports, ensuring consistency and compliance while reducing the manual effort required and minimising the risk of errors.

Trustees must be confident that they comply with all their regulatory reporting requirements and can efficiently adapt as these requirements evolve.

AlphaCert is trusted by fund managers, superannuation funds and sovereign wealth funds to automate their investment data processes and provide the best-decision making tools. Book a demo today.

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