We are particularly concerned about several pieces of information which we believe are missing from the Bill and draft regulations:

1. A definition of ‘faith-based product’ which is not circular
2. Details regarding how APRA should address any overly narrow investment strategies, and which may encourage investment decisions which conflict with the sole purpose test

We also noted in our submission for the exposure draft legislation the following^[1]:

Guidelines for APRA in approving proposed indices to be used for benchmarking investment performance, or determining (as proposed in subsection 60P(3)) alternative indices to be used in the event that APRA determines that the proposed index is not appropriate.

There appears to be no avenues of redress available in the event that APRA makes a mistake in assessing the application. 

^{[1] Note that references to subsection 60P(3) of the exposure draft legislation corresponds to subsection 60Q(3) of the Bill.}

We recognise that the Government intends to proceed with this policy as this is one of the Australian Labor Party election commitments.

We recommend the following

1. It is our belief that a more appropriate place to consider the problems of inaccurate benchmarks is the YFYS reform review.  

2. Consistent with the above point, we recommend that this proposed change is paused pending the review.

3. In the event that the legislation proceeds, we recommend that the following take place:

a. The legislation is included in the scope of the YFYS review, and

b. The scope of the legislative change is extended to products built around non-faith-based investment strategies for which APRA’s chosen benchmarks are inappropriate.