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JANA and the Association of Superannuation Funds of Australia (ASFA) have released a draft Guidance Note on Investment Management Operational Due Diligence for consultation with ASFA’s membership to help the superannuation sector meet new regulatory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The draft Guidance Note has been shaped through engagement with a broad working group of asset owners, managers and consultants and is intended to support consistent practices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Proposed key updates in the draft Guidance Note: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of Operational Consulting at JANA said, “We’re proud to be working with ASFA and industry stakeholders to develop this draft Guidance Note.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 Policy@superannuation.asn.au.

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Mary Delahunty

The Association of Superannuation Funds of Australia (ASFA) and JANA Investment Advisers (JANA) have announced they will lead an industry cross-collaboration to replace and uplift previous industry guidance around investment management operational due diligence.

The new ASFA guidance note will provide vital support for superannuation funds as they prepare for APRA’s new standard, CPS230 Operational Risk Management, effective July 2025. This guidance may also be applicable to asset owners across other APRA-regulated industries.

Existing industry guidance on investment management operational due diligence has been a valued resource over many years, serving as a benchmark standard for APRA-regulated funds and their investment managers. Maintaining its relevance requires dedicated support in an evolving regulatory environment – in particular, the introduction of CPS230 represents a significant uplift to the regulatory requirements for operational risk management.

Recognising this, JANA has partnered with ASFA, collaborating with experts from both organisations and broader contributors to refresh and update the existing guidance for current regulatory requirements and evolving sector needs. Through elevating the guidance to reflect CPS230’s introduction, APRA-regulated funds will gain enhanced capabilities for overseeing an investment manager’s operational risk, preparing for disruptions, and handling third-party outsourcing, offering a uniform approach across the sector.

“ASFA is proud to steward the ASFA Investment Manager Operational Risk Guidance Note, in collaboration with JANA and other industry leaders, to maintain its essential role in operational risk management,” said Mary Delahunty, CEO of ASFA. “Our efforts are committed to aligning this framework with CPS230 to meet the evolving needs of Australian investors.”

“CPS230 marks a pivotal step in operational resilience across the industry,” said Jo Leaper, Head of Operational Consulting at JANA. “This enhanced guidance framework will support consistent risk management and raises industry standards across both APRA-regulated and non-regulated entities.”

Building a unified industry approach

Success in advancing the ASFA Investment Manager Operational Risk Guidance Note depends on the collective efforts from stakeholders across the industry. The ASFA and JANA collaboration embodies this commitment to excellence, ensuring the guidance note will be a vital resource for industry best practices.

“Our efforts are driven by the shared goal of strengthening and elevating operational standards across the sector,” added Georgina Dudley, Chief Executive Officer, JANA Investment Advisers. “Partnering with ASFA underscores the power of collaboration, as operational risk management relies on the combined efforts of regulators, consultants, managers, and investors working in unison to achieve excellence.”

ASFA and JANA will provide an update on timing for release of the guidance note mid-Q1 next year.

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