The public holdings disclosure will hurt super fund members' interests, says Australian Private Equity and Venture Capital Association Limited (AVCAL) in its submission to the Treasury on superannuation regulation and governance.
The Australian venture capital (VC) and private equity (PE) representative has submitted a discussion paper that raises a series of concerns around the issue of the public disclosure of commercially sensitive unlisted asset evaluations.
While AVCAL strongly supports transparency and disclosure by superannuation funds, it is vital that any disclosure does not have a detrimental outcome to superannuation members’ interests, the submission says.
Requiring public disclosure of the value of unlisted assets could deter case fund managers from seeking capital from local superannuation funds because the regime would erode the commercial value of investing in unlisted Australian assets.
They also say the changes are costly and time-consuming to implement, and will result in large volumes of information that is difficult for members to process.
Although AVCAL agrees that information about these assets should be given to regulatory agencies, there should be a specific exemption from public disclosure of commercially sensitive information.
It says public disclosure would be counterproductive to superannuation investors who want to support the local economy through PE and VC funds, but cannot access this asset class because the disclosure obligations make them less preferred investors.
Public holdings disclosure may also result in foreign investment managers having an unfair advantage because they do not have to comply with the same stipulations as the domestic managers, according to the submission.
As one solution, AVCAL proposes that there should be a specific exemption from public disclosure of commercially sensitive information in relation to PE and VC superannuation investments.
They also wish to see the start date of July 1, 2014, deferred in order to consider other proposed models and provide super funds and their managers time to prepare and test them.