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29-457: Since 1 January 2014, unless an employee has chosen another investment option, employers must pay all compulsory SG contributions into approved MySuper accounts, i.e., into super products that have received a MySuper authority. From that date, super funds must also credit employer contributions to a MySuper account, unless if the member has directed the trustee to do otherwise. Given that over 75% of employees stay with their employers’ default fund, it

58-412: A MySuper product include: MySuper products are required to have a single investment option. Many funds, such as HESTA and Cbus , have announced that they will simply use their existing default investment option as their MySuper offering – typically Balanced or Growth. An estimated 80% of not-for-profit funds will reportedly retain their existing products for MySuper. This enables a simple transition to

87-417: A MySuper product, it is possible for the standard insurance cover to be replaced by a default insurance strategy tailored to meet the specific requirements of the employees of a particular employer. After 1 January 2014, members who do not make an investment choice, or who actively choose a fund's default option, must be invested in a compliant MySuper product. In 2019, Russell Mason of Deloitte argued that

116-452: A broad range of service sector activities, especially as concerns financial management and consumer finance . The finance industry in its most common sense concerns commercial banks that provide market liquidity , risk instruments , and brokerage for large public companies and multinational corporations at a macroeconomic scale that impacts domestic politics and foreign relations . The extragovernmental power and scale of

145-485: A business, helps businesses raise money from other firms in the form of bonds (debt) or share capital (equity). The primary operations of commercial banks include: The United States is the largest commercial banking services location. New York City and London are the largest centers of investment banking services. NYC is dominated by U.S. domestic business, while in London international business and commerce make up

174-430: A different investment mix based on their age and other permitted factors including balance, gender, time to retirement (or combination thereof), and can be particularly relevant as part of a transition to retirement. Sunsuper was the first fund to receive approval for their lifecycle strategy. However, a number of lifecycle strategies have since been released from companies including Aon, Suncorp, BT and First State. Fees

203-552: A member can be charged in MySuper products are limited to: In addition, trustees may charge fees for certain member‑specific costs initiated by the member or a court; for example, account splitting following a family law decision. All fees charged for MySuper products must be able to be included under these standard descriptions. This will make it simpler for members to understand what they pay and to compare fees against other MySuper products. MySuper products are required to offer

232-470: A particular MySuper product. They must be given a minimum of 90 days' notice before a default transfer to a MySuper account is made. The intention of the MySuper system is for market participants to create a range of easily comparable, relatively simple products, which in turn will focus competition on net costs and returns. The Australian Prudential Regulation Authority (APRA) fosters competition by publishing fee tables and other statistics. The features of

261-530: A significant portion of investment banking activity. FX or Foreign exchange services are provided by many banks and specialists foreign exchange brokers around the world. Foreign exchange services include: London handled 36.7% of global currency transactions in 2009 – an average daily turnover of US$ 1.85 trillion – with more US dollars traded in London than New York, and more Euros traded than in every other city in Europe combined. New York City

290-440: A standard, default level of life and total and permanent disability (TPD) insurance. Members of MySuper products are able to opt-out of the insurance, or increase or decrease their insurance cover (if offered by the trustee) without having to leave the MySuper product. There may be particular factors at a workplace level that influence the appropriate level and structure of insurance for employees at that workplace. Therefore, within

319-580: A variety of reasons. Some smaller financial centres, such as Bermuda , Luxembourg , and the Cayman Islands , lack sufficient size for a domestic financial services sector and have developed a role providing services to non-residents as offshore financial centres . The increasing competitiveness of financial services has meant that some countries, such as Japan, which were once self-sufficient, have increasingly imported financial services. The leading financial exporter, in terms of exports less imports,

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348-600: Is the largest center of investment services, followed by London. The United States, followed by Japan and the United Kingdom are the largest insurance markets in the world. A financial export is a financial service provided by a domestic firm (regardless of ownership) to a foreign firm or individual. While financial services such as banking, insurance, and investment management are often seen as domestic services, an increasing proportion of financial services are now being handled abroad, in other financial centres , for

377-408: Is traditionally among those to receive government support in times of widespread economic crisis. Such bailouts, however, enjoy less public support than those for other industries. A commercial bank is what is commonly referred to as simply a bank. The term " commercial " is used to distinguish it from an investment bank , a type of financial services entity which instead of lending money directly to

406-534: The United States partly as a result of the Gramm–Leach–Bliley Act of the late 1990s, which enabled different types of companies operating in the U.S. financial services industry at that time to merge. Companies usually have two distinct approaches to this new type of business. One approach would be a bank that simply buys an insurance company or an investment bank , keeps the original brands of

435-411: The superannuation industry . It ensures that these institutions keep their financial promises; that is, that they will remain financially sound and able to meet their obligations to depositors, fund members and policy holders. APRA currently supervises institutions holding A$ 8.6 trillion in assets for Australian depositors, policyholders and superannuation fund members. APRA is largely funded by levies on

464-482: The MySuper regime. However, critics of this approach argue that offering a single investment option that doesn't change over an entire working life and into retirement does not reflect customers' changing attitudes to risk as they age nor as their retirement prospects change. For these reasons, the government has allowed lifecycle investment options to be the default choice for a MySuper product. Lifecycle investment options enable trustees to automatically move members into

493-546: The acquired firm, and adds the acquisition to its holding company simply to diversify its earnings . Outside the U.S. (e.g. Japan ), non-financial services companies are permitted within the holding company. In this scenario, each company still looks independent and has its own customers, etc. In the other style, a bank would simply create its own insurance division or brokerage division and attempt to sell those products to its own existing customers, with incentives for combining all things with one company. The financial sector

522-774: The finance industry remains an ongoing controversy in many industrialized Western economies, as seen in the American Occupy Wall Street civil protest movement of 2011. Styles of financial institution include credit union , bank , savings and loan association , trust company , building society , brokerage firm , payment processor , many types of broker , and some government-sponsored enterprise . Financial services include accountancy , investment banking , investment management , and personal asset management . Financial products include insurance , credit cards , mortgage loans , and pension funds . The term "financial services" became more prevalent in

551-426: The financial institutions that it supervises. APRA is governed by an Executive Group, usually consisting of four people. All are statutory appointees. The current chair of APRA is John Lonsdale. Helen Rowell and Margaret Cole are Deputy Chairs. Suzanne Smith and Therese McCarthy Hockey are additional APRA Members. The Insurance and Superannuation Commission (ISC) was formally established on 23 November 1987, following

580-560: The introduction of MySuper products had ultimately been a waste of time, due to the fact that the majority of products were simply converted from existing fund options. Australian Prudential Regulation Authority The Australian Prudential Regulation Authority ( APRA ) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. APRA

609-769: The previous role of the Private Health Insurance Administration Council in July 2015. In 2018, Peter Harris , the chair of the Productivity Commission , was critical of the role of APRA in limiting price competition in banking. Representatives of APRA appeared before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry during 2018. In 2018, APRA created

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638-925: The proclamation of the Insurance and Superannuation Commissioner Act 1987. It was constructed from the Superannuation Division of Treasury, The Office of the General Insurance Commissioner, The Office of Life Insurance Commissioner, and The Office of the Australian Government Actuary. The commission was based at the Australian Automobile Association Building, Canberra and also had offices in Melbourne and Sydney. The Insurance and Superannuation Commission

667-817: The restricted authorised deposit-taking institution (RADI) licensing framework to encourage new entrants and competition to the existing banking system. APRA establishes prudential standards with which regulated institutions must comply. It also creates and maintains Prudential Practice Guides (PPGs) to provide guidance on APRA's view of "sound practice" in particular areas for specific industries, as well as areas common to most APRA-regulated entities ("cross-industry guides"). PPGs frequently discuss statutory requirements from legislation, regulations or APRA's prudential standards, but do not themselves create enforceable requirements. Financial services Financial services are economic services tied to finance provided by financial institutions . Financial services encompass

696-633: The time, the regulators of the Australian financial services industry were based on the institutions and not the regulatory function. APRA's predecessor regulators were the Insurance and Superannuation Commission, the Reserve Bank of Australia and the Australian Financial Institutions Commission (AFIC). The Wallis Inquiry recommended a new structure. The role of the Reserve Bank of Australia (RBA)

725-872: Was absorbed into the Australian Prudential Regulation Authority on 1 July 1998. In June 1996, the Financial System Inquiry (known as the Wallis Inquiry) was established to examine the results of the deregulation of the Australian financial system, to examine the forces driving further change, particularly technological, and recommend changes to the regulatory system to ensure an "efficient, responsive, competitive and flexible financial system to underpin stronger economic performance, consistent with financial stability, prudence, integrity and fairness." At

754-630: Was amended to deal with monetary policy and systemic stability with the Payments System Board considering payments systems regulation. The role of the Australian Prudential Regulation Commission (later to become APRA) was amended to deal with prudential regulation of authorised deposit-taking institutions (ADIs), life and general insurance, and superannuation including Industry superannuation . The Corporations and Financial Services Commission

783-605: Was established on 1 July 1998 in response to the recommendations of the Wallis Inquiry. APRA's authority and scope is determined pursuant to the Australian Prudential Regulation Authority Act, 1998 (Cth). APRA was established on 1 July 1998. It oversees banks, credit unions , building societies , friendly societies , general insurance , health insurance , reinsurance , and life insurance companies, and most members of

812-435: Was expected that the majority of employees would be in a MySuper product from that date. Superannuation funds had until 1 July 2017 to move existing default members into a complying MySuper product. For convenience, many funds simply converted an existing default option to a MySuper account, so that members would be automatically included in a MySuper product. Members can opt out of the MySuper option at any time, or may choose

841-707: Was renamed and its role expanded as the Australian Securities and Investments Commission (ASIC) to deal with market integrity, consumer protection and corporations. APRA was established on 1 July 1998 under the Australian Prudential Regulation Authority Act 1998 . APRA became prominent in the collapse of HIH Insurance in 2001 and for its investigation into the National Australia Bank foreign currency deal scandal in 2004. APRA took over

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