IOOF Holdings Limited (ASX: IFL) has been a great aid to Australians to secure their financial future to grow into one of the largest groups in the financial services industry. It caters to its clients and advisors with financial advice, portfolio management and administration and investment management, broadening its network area across the country.
Today, 26 April 2019, the company updated the exchange on the licence conditions that were imposed by the Australian Prudential Regulation Authority (APRA) in December, last year where a summary of the same was presented. These conditions are centred around to IOOF’s three APRA Regulated Entity subsidiaries (AREs) and cover initiatives which are either in development or have been completed.
To cater to this progress, 76 actionable items were identified by a dedicated independent reviewer (the Independent Reviewer) engaged by IOOF. These were cases pertaining to the 31 March 2019 period. Out of the 76, 72 items have been duly completed or are a verge of the completion stage. The other 4, however, remain in the “in progress” stage and are of a single initiative- implementing a committed business function (Office of the Superannuation Trustee, or “OST”). IOOF’s approach to the OST has been to design a function in a considered manner, with member outcomes central to its design and maintenance.
As of 31 March 2019, the Independent reviewer claimed to have observed 3 facts, discussed under-
Firstly, governance upliftment along with enhanced cultural environment is the prime commitment of IOOF within the organisation and to be carried consistency. Secondly, the implementation and execution of OST have been taken optimistically to carve the foundation of the business. For the same, the head of the OST has been engaging with the ARE Boards and senior management and others to operationalise the function. There is hence a depiction that they are committed to providing the OST with the necessary funding to ensure a well-functioning and sustainable OST. Last, but definitely not the least, the head of the OST has effectively engaged with appropriate governance functions across IOOF, and the reviewer expects this to occur in an effective and efficient manner going forward for the OST.
It has also been noticed and pointed out by the Independent Reviewer that against various initiatives, the OST has not yet been implemented from March 31 but remains in a progressive “in progress” stage.
A “show cause notice” has been received from APRA to reflect the detailing of the reviewer’s report, indicating that APRA has formed the preliminary view that the AREs have breached their license condition relating to the OST. APRA has further informed the AREs (who have resolved not to dispute this notice) that it is considering issuing directions to comply, with a stern completion date for the implementation and maintenance of the OST latest by the end of June 2019. IOOF, in return, is set to carry forward optimistic and constructive measures for the implementation and maintenance of OST within the operations of the Group and seem confident to meet the deadlines provided to them. In reference to this, Chairman, Allan Griffiths admits to work towards every requisite and make notable progress positively.
The shares of IFL closed the trade at $6.460 on ASX (as on 26 April 2019), down by 2.564 percent as compared to its previous day’s close.
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