On 30 September 2026, the Australian Prudential Regulation Authority (APRA) issued a consultation paper and draft Prudential Standard SPS 530 Investment Governance for consultation.
Background
The policy reform in the consultation paper is the next phase of APRA’s multi-year work to strengthen investment governance. APRA is proposing 8 changes: 3 reforms that introduce stronger safeguards and 5 changes that largely codify and strengthen existing expectations. The 3 reforms focus on risks most evident in platform and other member-directed investment models. They would require trustees to: (i) set and enforce member-level investment limits to reduce the risk of severe loss from concentrated investments in higher-risk options; (ii) strengthen conflicts management in relation to third parties, including advisers and promoters; and (iii) align trustee resources and capability with the size, complexity and nature of their investment offerings.
The remaining 5 changes would codify and, in some areas, strengthen APRA’s expectations for rigorous investment onboarding, ongoing monitoring, timely remediation, reliable valuations and clear accountability. They would translate expectations previously communicated through supervision and APRA’s 2025 industry letter into clear minimum requirements.
Proposals
The proposals are:
- Require trustees to set and enforce member-level investment limits to reduce the risk of severe member losses from excessive exposure to concentrated higher-risk options.
- Require trustees to identify, assess and appropriately manage or avoid conflicts of interest involving promoters, advisers and other third parties to ensure investment decisions are made in members’ interests and are not inappropriately influenced by third parties.
- Require trustees to align the size and complexity of their investment menu with the capabilities and resources available to oversee it effectively.
- Require trustees to establish and apply acceptance thresholds across minimum performance and risk criteria to ensure investments are only onboarded following rigorous due diligence and objective assessment.
- Require trustees to monitor investments against the same minimum performance and risk criteria set out in Proposal 4 to support timely identification of emerging risks and performance deterioration.
- Require trustees to set minimum thresholds and triggers for taking action to ensure timely intervention when investment performance deteriorates or risks emerge and obtain member consent to remain in underperforming options.
- Require trustees to undertake investment valuations at least quarterly and obtain an external valuation where directed by APRA to support timely and reliable valuations.
- Require trustees to obtain an annual attestation on the adequacy of their investment governance arrangements, and to have regard to that attestation when determining variable remuneration, to strengthen accountability for investment governance outcomes.
Next steps
APRA is seeking feedback on the proposed changes by 3 February 2027.
The standards are expected to be finalised in the first half of 2027.
Subject to consultation, the new framework is expected to commence on 1 January 2028.
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