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Disclosure rules will hurt members: AustralianSuper

The country’s largest superannuation fund, AustralianSuper, has objected to draft regulations that require funds to fully disclose the value of all of their investment portfolio holdings, saying it will hurt members.

AustralianSuper, which manages more than $230 billion of behalf of 2.5 million members, says the new rules would require it to release sensitive commercial information that could impact the fund’s performance.

AustralianSuper’s chief investment officer Mark Delaney is concerned that the new investment disclosure regime could hurt the financial interests of the fund’s 2.5 million members

AustralianSuper’s chief investment officer Mark Delaney is concerned that the new investment disclosure regime could hurt the financial interests of the fund’s 2.5 million membersCredit:Janie Barrett

“The regulations will increase costs for members and decrease returns, which is at odds with the government’s stated desire to increase performance and reduce costs in Australia’s super system,” says Mark Delaney, AustralianSuper’s chief investment officer.

“The only people to be advantaged by these [proposed] regulations are rival fund managers who are not subject to the same disclosure obligations and will use the information to their own financial gain… ,” Delaney says in the fund’s submission to Treasury on the draft disclosure regulations.

The start date for when funds must disclose holdings on their websites has been repeatedly delayed. It was part of “Stronger Super” laws and originally expected to begin in 2016. However, it is now scheduled to start at the end of this year.

Under the draft regulations, super funds have to provide dollar amounts of how much they have in each investment, as well as a percentage that the investment makes up of their overall portfolio. That includes unlisted assets, such as the toll roads and pipelines, property and investments in private equity firms.

Unlisted assets, particularly infrastructure, have long played a major part in the good returns of many not-for-profit funds, such as AustralianSuper.

The fund already discloses most of its portfolio holdings on its website. However, it gives valuation ranges for its directly held property and infrastructure investments with a time lag, rather than exact values, to prevent the release of commercially sensitive information.

In its Treasury submission, the fund says being required to provide precise values for unlisted assets would disadvantage it – if it wants to sell those assets.

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