Superannuation (prudential standard) determination No. 3 of 2019
Material risksMaterial risks
Start here
Get a plain-English read of Material risks
Turn the raw legal text into a practical explanation grounded in Superannuation (prudential standard) determination No. 3 of 2019.
Material risks
-
An RSE licensee must, at a minimum, ensure that its risk management framework covers all material risks, both financial and non-financial, to the RSE licensee’s business operations, having regard to the size, business mix and complexity of those operations.
-
An RSE licensee must assess the materiality of each risk with reference to its business operations as a whole, each RSE within those operations and the impact of the risk on the obligations of the RSE licensee to its beneficiaries.
-
An RSE licensee’s risk management framework must, at a minimum, cover:
(a) governance risk[6];
(b) investment governance risk[7];
(c) liquidity risk, including the liquidity characteristics of investment options offered or proposed to be offered[8];
(d) operational risk[9];
(e) insurance risk[10];
(f) strategic and tactical risks that arise out of the RSE licensee’s strategic and business plans; and
(g) other risks that may have a material impact on the RSE licensee’s business operations.
13. Where an RSE licensee conducts business that has a purpose other than superannuation[\[11\]](#_ftn11), its risk management framework must cover all material contagion risks that any non\-superannuation business conducted by the RSE licensee might have on the superannuation business.