The members of the VicSuper superannuation fund alleged that the fund had made false and misleading representations about its entitlement to charge plan service fees and members' obligations to pay the fees. Hence, the fund failed to provide financial services honestly and fairly. Which authority should be the primary regulator for investigating this allegation?

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The question asks which authority should be the primary regulator for investigating alleged false and misleading representations by a superannuation fund about plan service fees and members’ obligations.
Option a: RBA (Reserve Bank of Australia) is primarily responsible for monetary policy, payments systems, and overall financial system stability. It is not the regulator tasked with policing financial services conduct or investigating misleading representations by financial product providers. Therefore this choice does not fit the role of regulating financial services conduct.
Option b: The federal Parliament holds legislative power and can create laws, but it is not the frontline regulator conducting investigations into financial services conduct. Law-making and regulatory enforcement are separate functions, with enforcement carried out by a specified regulator such as ASIC. Hence this is not the primary regulator for investigations.
Option c: APRA (Australian Prudential Regulation Authority) oversees prudential standards for banks, credit unions, insurers, and superannuation funds from a prudential safety perspective. While APRA has a supervisory role over superannuation entities, its focus is on ensuring financial soundness and stability, not on enforcing consumer protection or market integrity rules related to misrepresentation of fees. Therefore, APRA is not the primary regulator for investigating misleading representations in this context.
Option d: ASIC (Australian Securities and Investments Commission) is the regulator responsible for enforcing laws relating to financial services and financial markets in Australia. ASIC has overarching authority to investigate and take action against false or misleading representations by financial service providers, including superannuation funds offering financial products, under relevant consumer protection and market integrity provisions. This makes ASIC the correct primary regulator for such an allegation.
In summary, the regulatory framework assigns primary investigative and enforcement duties concerning misleading financial services representations to ASIC, with APRA handling prudential aspects of superannuation but not primary investigation of misrepresentation claims. The other options describe authorities whose roles do not center on investigating financial services conduct in this context.

MCD2170 Foundations of Finance - Trimester 1 - 2025

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