Superannuation Industry (Supervision) Amendment (Your Future, Your Super - Addressing Underperformance in Superannuation) Regulations 2023 (F2023L01063)

Schedule 1   Main amendments

Superannuation Industry (Supervision) Regulations 1994

17   Subregulations 9AB.5(1) to (3)

Repeal the subregulations, substitute:

(1) A Part 6A product's strategic asset allocation in relation to a quarter to a covered asset class for the quarter is:

(a) unless paragraph (b) or (c) applies - the Part 6A product's benchmark asset allocation in relation to the quarter to the covered asset class, as reported to APRA in accordance with the applicable asset allocation standard (expressed as a fraction); or

(b) unless paragraph (c) applies, if the Part 6A product does not have a benchmark asset allocation in relation to the quarter to the covered asset class - zero; or

(c) if the quarter is before the Part 6A product's initial quarter - the product's benchmark asset allocation in relation to the initial quarter to the covered asset class (expressed as a fraction).

(2) For the purposes of subregulation (1), if a benchmark asset allocation to a covered asset class does not identify an asset domicile type for the covered asset class:

(a) treat half of the amount of that benchmark asset allocation as identified with an Australian domicile type;

(b) treat half of the amount of that benchmark asset allocation as identified with an international domicile type; and

(c) where the benchmark asset allocation identifies a currency hedging ratio for the covered asset class (including a currency hedging ratio of zero) - treat all of the amount of that currency hedging ratio as identified with the international domicile type; and

(d) where the benchmark asset allocation does not identify a currency hedging ratio for the covered asset class:

(i) if the Part 6A product does not have a currency exposure in relation to the quarter - treat a currency hedging ratio of zero as identified with the international domicile type; or

(ii) if the Part 6A product has a currency exposure in relation to the quarter (including a currency exposure of zero) - treat a currency hedging ratio of the amount worked out under subregulation (3A) as identified with the international domicile type.

(3) For the purposes of subregulation (1), if a benchmark asset allocation to a covered asset class identifies the international domicile type with the covered asset class and does not identify a currency hedging ratio for the covered asset class:

(a) if the Part 6A product does not have a currency exposure in relation to the quarter - treat a currency hedging ratio of zero as identified with the international domicile type; or

(b) if the Part 6A product has a currency exposure in relation to the quarter (including a currency exposure of zero) - treat a currency hedging ratio of the amount worked out under subregulation (3A) as identified with the international domicile type.

(3A) For the purposes of subparagraph (2)(d)(ii) and paragraph (3)(b), work out the currency hedging ratio as follows:

(a) first, work out the Part 6A product's strategic asset allocation, in relation to the quarter, to each covered asset class identified with the international domicile type;

(b) next, work out the sum of the strategic asset allocations worked out under paragraph (a);

(c) next, divide the currency exposure mentioned in subparagraph (2)(d)(ii) and paragraph (3)(b) by the result of paragraph (b);

(d) next, subtract the result of paragraph (c) from one.

If the result of paragraph (d) is less than zero, treat it as being zero.