The AMP Limited ASX: AMP) share price has come under pressure again on Friday after Australian Prudential Regulation Authority (APRA) issued directions and additional licence conditions to AMP Super.
At the time of writing the embattled financial services company's shares are down 4% to $2.15.
What did APRA announce?
This morning APRA announced that it has imposed directions and additional licence conditions to address a range of concerns regarding AMP Super's compliance with the Superannuation Industry (Supervision) Act 1993.
This action has arisen from issues identified during APRA's ongoing prudential supervision of AMP Super, along with matters that emerged during the Royal Commission.
The release explains that the new directions and conditions are designed to deliver enhanced member outcomes by requiring AMP Super to make significant changes to its business practices.
Areas that APRA identified for improvement include conflicts of interest management, governance and risk management practices, breach remediation processes, addressing poor risk culture, and strengthening accountability mechanisms.
In addition to this, the directions require AMP Super to renew and strengthen its board and to engage an external expert to report on remediation and compliance with the new directions and conditions.
AMP response.
The company was quick to respond to APRA's announcement.
It said: "AMP will fully implement the directions and additional conditions. We have been working constructively with APRA on this matter and have already taken action on a number of the issues raised."
Adding: "In May 2019, the AMP Limited Board moved to expand the superannuation trustee boards, broadening the range of skills and experience. This, together with a new trustee operating model, is designed to strengthen the independence of the trustees and ensure they continue to work in the best interests of members."
It also pointed out that it has significantly reduced fees on its flagship MySuper products, benefiting approximately 600,000 existing members as well as new members, and has reduced fees for its MyNorth investment platform, benefitting superannuation members and investors.
Elsewhere in the financial sector on Friday, the shares of Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), and the rest of the big four have tumbled lower. This could be in response to a reasonably negative broker note out of the Macquarie equities desk this morning labelling many of the banks as sells.
