What happens if my RSE licence is cancelled by APRA?

In Plain English

If APRA (the Australian Prudential Regulation Authority) cancels your RSE (Registrable Superannuation Entity) licence, here's what happens:

  • Reasons for Cancellation: APRA can cancel your licence for several reasons, including if you ask them to, if you become disqualified, if you break the rules (conditions) of your licence, or if you don't follow APRA's directions.
  • Notification: APRA must inform you (or the group you belong to) about the cancellation and the reasons why.
  • Financial Service Licence: If you also have a financial services licence, APRA will talk to ASIC (Australian Securities & Investments Commission) before cancelling your RSE licence if it might affect your ability to provide financial services. APRA will also inform ASIC after the cancellation.
  • Licence Continuation: In some cases, APRA can allow your RSE licence to continue for a specific period or purpose, even after cancellation.
  • Impact: Once cancelled, you can't operate as an RSE licensee unless APRA specifies otherwise.

Detailed Explanation

The Superannuation Industry (Supervision) Act 1993 outlines the circumstances and procedures related to the cancellation of an RSE licence.

Grounds for Cancellation (Section 29G):

APRA has the power to cancel an RSE licence under section 29G(1). According to section 29G(2), this can occur in situations such as:

  • The RSE licensee requests cancellation in the approved form (s 29G(2)(a)).
  • The RSE licensee is a disqualified body corporate (s 29G(2)(b)).
  • The RSE licensee breaches a condition of the licence, or APRA believes a breach is likely (s 29G(2)(c) and (d)).
  • The RSE licensee fails to comply with a direction from APRA under subsections 131D(1) or 131DA(1), or APRA believes they will fail to comply (s 29G(2)(e) and (f)).

Notification of Cancellation (Section 29G(4)):

APRA is required to take reasonable steps to notify the body corporate or group that held the RSE licensee about the cancellation and the reasons for it.

Consultation with ASIC (Section 29GA):

If the RSE licensee also holds a financial services licence, APRA must consult with ASIC before cancelling the RSE licence if the cancellation could affect the licensee's ability to provide financial services as defined under the Corporations Act 2001. APRA must also inform ASIC of the cancellation within one week. Failure to comply with this consultation requirement does not invalidate the cancellation.

RSE Licence Continuation (Section 29GB):

APRA has the discretion to specify that the RSE licence continues in effect for specific purposes, periods, or in relation to specified matters, even after cancellation. This would be outlined in the cancellation notice.

Directions from APRA:

APRA can issue directions to RSE licensees under subsections 131D(1) or 131DA(1) of the Superannuation Industry (Supervision) Act 1993. Failure to comply with these directions, or APRA's belief that the RSE licensee will fail to comply, is grounds for cancellation of the RSE licence as per section 29G(2)(e) and (f).