ASFA and JANA publish draft Guidance Note to strengthen Investment Management Operational Due Diligence ahead of CPS 230
Mary Delahunty
JANA and the Association of Superannuation Funds of Australia (ASFA) have released a draft Guidance Note on Investment Management Operational Due Diligence for consultation with ASFA’s membership to help the superannuation sector meet new regulatory obligations.
The proposed updates aim to strengthen operational resilience and ensure investment managers are demonstrating the effective management of risks as they support the long-term objectives of superannuation funds.
In November 2024, ASFA and JANA announced their partnership to lead an industry-wide effort to enhance and replace the existing guidance on investment management operational due diligence in preparation for APRA’s new prudential standard CPS 230 Operational Risk Management Standard, which comes into effect on 1 July 2025.
The draft Guidance Note has been shaped through engagement with a broad working group of asset owners, managers and consultants and is intended to support consistent practices across the industry.
Proposed key updates in the draft Guidance Note:
- Regulatory alignment: Updates to align with CPS 230 and also CPS 234 Information Security, reinforcing a strong, enterprise-wide risk management culture.
- Investment manager operational due diligence review process: Encouraging investment managers to engage independent specialists for operational due diligence reviews, helping to lift industry standards, support consistency in assessments, and promote greater transparency.
- Enhanced guidance: Providing detailed guidance for independent reviewers and asset owners who self-service.
- Expanded review criteria: A more comprehensive set of criteria covering governance, personnel, IT security, ESG factors, business continuity, and data governance to align with CPS 230.
- Updated format: The new format is designed to enable review of enterprise and investment strategy alongside CPS 230 requirements.
- Regular reviews and updates: Recommendations for continuous improvement and alignment with evolving industry standards.
- Emphasis on transparency and independence: Encouragement of independent and specialised assessments to strengthen due diligence effectiveness.
Jo Leaper, Head of Operational Consulting at JANA said, “We’re proud to be working with ASFA and industry stakeholders to develop this draft Guidance Note. This partnership underscores JANA’s commitment to driving industry-wide improvements in investment management operational due diligence. CPS 230 marks a significant shift in operational resilience, and this draft framework is designed to support consistent and practical risk management practices across both APRA-regulated and non-regulated entities.”
Mary Delahunty, CEO of ASFA added, “Strengthening operational due diligence is critical for the stability and integrity of our industry. This updated guidance provides a clear roadmap for superannuation funds and investment managers to meet the evolving regulatory landscape and enhance their risk management frameworks to the benefit of everyday Australians.”
As the industry prepares for the implementation of CPS 230, JANA and ASFA remain committed to supporting superannuation funds and investment managers in adopting best practices in operational due diligence. This collaboration reflects a broader effort to enhance risk management, governance, and resilience across Australia’s financial sector.
The draft Guidance Note is open for feedback from ASFA members until Thursday 24 July, via [email protected].
