Frequently asked questions

Fit and Proper

  • Superannuation
  • Current
    31 August 2015

Fit and Proper

What are APRA’s expectations on the requirement to assess the fitness and propriety of responsible persons from material outsourced service providers, including whether there can be a reduced assessment process where the service provider is a prudentially regulated entity?

APRA expects RSE licensees to take a reasonable approach to assessing the fitness and propriety of responsible persons that are employed by a service provider; the obligation is on an RSE licensee to satisfy itself that all of the responsible persons relevant to their business operations have been assessed as fit and proper.
The practical extent of a fit and proper assessment for a responsible person employed by a service provider will depend on the comfort that the RSE licensee has about the assessment/recruitment processes the service provider has in place. If the RSE licensee has any doubts about the rigour of the service provider’s processes to ensure that their staff are fit and proper, the RSE licensee would be expected to undertake a more direct assessment. If the external entity undertakes police checks, however, the RSE licensee is entitled to rely on those police checks.

Paragraph 29 of Prudential Standard SPS 520 Fit and Proper (SPS 520) requires an RSE licensee to complete a fit and proper assessment before a person becomes the holder of a responsible person position. What are APRA's expectations regarding this requirement where an RSE is required to appoint the Auditor-General (or equivalent statutory appointment) as RSE auditor?

APRA acknowledges that in the case of statutory appointments, it may not be possible for the RSE licensee to undertake the fit and proper assessment before an individual is appointed as Auditor-General and therefore as a responsible person of the RSE licensee. In such circumstances, APRA expects that an RSE licensee will notify APRA about the personal details of the individual who has been appointed to the position within 14 days (as required by paragraph 45 of SPS 520 and Reporting Standard SRS 520.0 Responsible Persons Information) and will ensure that the fit and proper assessment is completed within 28 days of the person’s appointment.