The financial regulator has given its stamp of approval for IOOF to buy ANZ Bank’s superannuation business, clearing the final major hurdle for the financial advice group.
The Australian Prudential Regulation Authority (APRA) said IOOF had taken steps to improve governance and ensure members’ interests were looked after.
The decision means IOOF will acquire ANZ’s OnePath pensions and investments business for $825 million, further reducing the banking giant’s exposure to wealth management.
Before Monday’s decision from APRA, market analysts had thought the deal was likely to go ahead, but not certain, after the regulator last year imposed extra licence conditions on IOOF.
APRA had also taken legal action against IOOF and sought to have some of its directors disqualified, but it lost this landmark case in September.
On Monday, APRA said it had no reason to think that the change in ownership could cause the trustees of the funds to breach their obligations under the Superannuation Industry (Supervision) Act. The Act includes a duty for funds to act in the best interests of their clients.
APRA noted that since it imposed extra licence conditions on IOOF last year, the wealth manager had appointed a majority of independent directors to the boards that oversee its super funds, among other changes.
“APRA’s decision recognises IOOF’s progress in strengthening governance structures and management of conflicts within its existing RSE licensees, in response to additional licence conditions imposed by APRA in December 2018,” APRA said.
IOOF said in October, when it announced a reduction in the price it would pay for the pensions businesses, that the deal would “meaningfully increase” the size of its core business. ANZ said at the time that it expected the deal to be completed in early 2020, subject to APRA’s approval.
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