The Australian corporate watchdog has advised the country’s A$4.5 trillion (approximately $ 3.16 trillion) pension fund business to increase its investments in systems and technology to better suit the future and avoid being burdened by the stock market operator ASX.
Australian Securities and Investments Commission (ASIC) Commissioner Simone Constant reported that the pension fund industry, which is widely recognised as superannuation in the country, is expected to be valued at A$6 trillion by 2030.
By noting the size, she stated that it would make it larger than the banking system of Australia, and it is a growing part of the national financial system.
Constant added that some pension funds required more investment to expand their management, skills, and activities as more workers retire and claim their pensions.
Constant said in a speech to the Conexus Forum, “Look at the ASX for a cautionary tale on what happens when your investment and aspiration doesn’t match your role in the system.”
She noted that “The ASX is one of the most critical limbs of Australia’s financial services, but it has failed to deliver on its promise to its customers because it has looked backward, not forward, whilst seeing its issues separately rather than listening to customers and bringing them together, for best practice.”
ASIC imposed a further capital fee of A$150 million on ASX in November, due to an investigation initiated in June following years of tensions after a failed software upgrade and recurring trade-processing glitches.
Therefore, the ASIC has raised concerns about the capacity of ASX to deliver safe and robust critical market infrastructure. The ASX declined to comment to Reuters.
The Australian pension fund sector has already been warned to hurry the arrangements ahead of what is estimated to be 2.5 million individuals who will retire within the coming decade.
