The Investment Governance Framework Policy articulates many aspects on how the executive investment team monitors and reports on its fund managers. The Trustee has a Board approved Incident and Breach Policy. When incidents and breaches occur, there are all recorded in our Incident Breach Register and there is a process for investigation and rectification. This is overseen by our Quality and Risk team. There is reporting to the relevant Committee/s and Board.
Our custodian National Asset Servicing, as part of our service level agreement with them undertakes mandate compliance monitoring based on the investment guidelines (authorized investments and restrictions) as outlined with our investment management agreements for each listed mandate we have in place with fund managers. We also log incidents internally within the incident and breach register which is then investigated and managed by the internal compliance/risk team.
Furthermore, as part of our annual compliance obligations for material outsourcing requirements, we request from our fund managers, master custodian, transition managers and investment advisor the following items/questions as part of our compliance and evaluation sign-off. This is also reviewed by internal compliance and reported to the Governance, Risk and Appointments Committee annually:
•You confirm that where derivative instruments have been used, your firm has acted in accordance with your derivative risk statement (DRS) which has previously been provided to Vision Super.
•If, following the repeal of APRA Circular II.D.7- Derivatives, your firm has decided to cease to use a DRS, please provide details of the risk management strategies that your firm has in place to manage the use of derivatives.
•You confirm that your firm’s risk management strategies address the risk tolerances adopted by your firm, the management of appropriate lines of authority and responsibility for transacting derivatives (including trading limits), and considers worst case scenarios, sensitivity analysis, and the reporting of that analysis.
•You confirm that your firm has ensured that any breaches of the Agreement have been escalated and reported to Vision Super immediately.
•You confirm that your firm has in place, and maintains at all times, an effective business continuity and disaster recovery policy and procedure.
•You confirm that your firm had a Business Continuity and Disaster Recovery Plan for the year ending 30 June 2019 and conducted testing at least once between 1 July 2018 and 30 June 2019.
•Please include a high-level summary of the results of the last business continuity and disaster recovery tests undertaken.
•You confirm that your firm has adequate computer systems in place which provide for back-up of data and software, and that back-up tapes are stored off-site and maintained for the requisite period of time (i.e. in line with the relevant legislation).
•You confirm that your firm has, at all times, documented policies and procedures in place for the detection and prevention of fraud (including any instances of suspicious transactions or activities), which includes a process whereby Vision Super is notified of any instances of fraud/suspicious activity which may affect Vision Super’s portfolio.
•You confirm that your firm promptly reports all instances of fraud, as well as any suspicious transactions, to Vision Super.
•Since the last review, have any changes or events occurred which have had (or will have) an impact on the Risk Management Framework at your firm? If so, please provide details and any associated documents to that effect.
•You confirm that your firm has kept Vision Super’s portfolio under view, and that you could freely communicate with no obstacles, at regular intervals, with Vision Super regarding the investment and management of the portfolio.
•You confirm that your firm has kept proper books of account in relation to Vision Super’s portfolio which records transactions, and provides information in relation to Vision Super’s portfolio, which assists Vision Super, its custodian and its auditors in the preparation of reports required under the relevant legislation.
•You confirm that your firm has not taken any charge, lien or other encumbrance over, or in relation to, the assets of Vision Super’s portfolio other than expenses and outlays of expenses made within the terms of the Agreement.
•You confirm that your firm has provided proper instructions to its custodian in relation to transactions concerning Vision Super’s portfolio.
•You confirm that your firm has used all reasonable endeavors to ensure that the assets within Vision Super’s portfolio are invested in accordance with Vision Super’s authorized instructions.
Disclosure and Reporting:
•You confirm that your firm has prepared, and delivered to Vision Super and its custodian, all reports in accordance with the Agreement in a proper and timely manner, which are free of material defects, errors or omissions.
•You confirm that your firm has exercised all due diligence and vigilance in carrying out its functions, powers, and duties under the Agreement.
•You confirm that your firm has provided a summary of any investment instructions agreed between Vision Super and your firm for the management of Vision Super’s portfolio, as well as any changes which may have occurred during the reporting period.
•You confirm that your firm has accounted to Vision Super for any monetary benefits, fees or commissions received, or any related body corporate of your firm, in relation to the investment of Vision Super’s portfolio (other than benefits permitted in your firms policy on soft dollar arrangements and fees and commissions permitted) in accordance with the Agreement.
Other questioning relates to the following areas:
•i.e. ◦You confirm that your firm is not the subject of any investigation by any governmental or regulatory authority or self-regulating organization. In the case where it is alleged that your firm has breached any of its regulatory obligations or engaged in misconduct, please provide appropriate notices and relevant details.
◦You confirm that there are no current or anticipated criminal or material civil proceedings in any Australian court or tribunal which directly involves your firm.
◦You confirm that that your firm is a body corporate and not a disqualified person under the Superannuation Industry (Supervision) Act 1993.