FSI backs ATO as regulator of SMSFs
Despite continual calls for APRA to take the reins as regulator of the SMSF sector, the Financial System Inquiry final report has backed the current regulatory arrangements.
Since submissions to the FSI opened, there have been ongoing calls for the appropriateness of the ATO as regulator of the SMSF sector to be evaluated.
Most recently, the Actuaries Institute said there is a need to confirm that the level of prudential oversight for the SMSF sector is appropriate to manage the potential for systemic risk, and that the regulation of the sector should be examined given its significant size.
However, the FSI has confirmed it does not support the proposition that APRA should take over as regulator of SMSFs.
“The defining characteristic of the SMSF sector is that trustee members are directly responsible for each fund and must take responsibility for their own decisions,” the report stated.
Chair of the government’s 2010 review of superannuation, Jeremy Cooper, has also publicly backed the ATO as the most appropriate regulator of the sector.
“The philosophy is that you take responsibility for building up your retirement savings and you take that responsibility yourself,” Mr Cooper said.
“They’re primarily tax rules that you’ve got to comply with in order to have that privilege, and it’s really the tax office that ought to administer that.”