Summary

  • APRA’s draft SPS 530 proposes member-level limits on certain higher-risk superannuation options, within a preliminary regulator ceiling of 20–30% per option or group. The number is open to consultation, not an existing universal rule.
  • Trustees would control new purchases and additional contributions above a limit; the proposal does not generally require forced sales after market movements. Members would still bear investment risk.

A member choosing a retirement investment can see a product name and a recent return more easily than the leverage, liquidity or concentration beneath it. APRA’s proposed response is to move some of that risk assessment from the individual choice screen to the trustee that designs and supervises the investment menu.

On 30 September, the Australian Prudential Regulation Authority released a consultation paper and a draft replacement for Prudential Standard SPS 530, Investment Governance. The draft would require trustees to identify, by exception, options that warrant member-level limits because of their underlying risk. APRA’s preliminary view is that the maximum should fall somewhere between 20% and 30% of a member’s balance in an option or group of options. It has invited evidence on the right calibration; the range is not yet binding.

The trustee would first assess the exposure rather than rely on a product label. APRA points to features such as illiquidity, leverage, limited diversification and counterparty concentration. A trustee could set a lower limit for an especially concentrated or difficult-to-value option. The draft’s examples of lower figures are illustrations, not a schedule that APRA has already adopted. That discretion makes the quality of each trustee’s risk classification central to how much choice members retain.

The proposed control is mainly prospective. If a member reaches the applicable limit, the trustee would prevent further acquisitions or contributions into that option, subject to the draft’s operating rules. A change in market values that leaves an existing holding above its limit would not generally trigger a forced sale. In persistent, material cases, trustees would be expected to inform affected members. This design can slow additional concentration, but it cannot remove exposure already accumulated or guarantee a better outcome.

APRA is consulting on eight changes to the investment-governance standard. Three strengthen safeguards: member-level concentration limits, stronger management of conflicts involving third parties, and trustee resources and capability proportionate to the investment menu. Five others would update or codify expectations for onboarding, monitoring, remediation, valuation and accountability. The common question is whether a trustee can explain why an option is offered, how its risks are measured and what happens when evidence changes.

The proposal follows APRA’s scrutiny of superannuation platforms. The regulator has said platforms represent about 15% of regulated super assets, while trustees offering platforms accounted for 70% of announced superannuation enforcement actions in 2025–26. Those figures describe APRA’s enforcement record and the population it reviewed; they are not a measured failure rate for every platform or trustee. APRA also says the proposed limits would not have prevented the Shield and First Guardian collapses. The reform addresses exposure controls, not a promise to eliminate fraud, poor valuation or investment loss.

The consultation closes on 3 February 2027. APRA expects a final standard in the first half of 2027 and, subject to consultation, commencement on 1 January 2028. The current proposal therefore creates work now for trustees reviewing menus and data, but no member should read the preliminary ceiling as a limit already in force. The governing statute continues to place duties on trustees; the draft would make parts of the regulator’s expectations more specific.

A separate government proposal for compensation, discussed in an APRA release on 19 August, is not part of the SPS 530 consultation.

Sources