Archived News for Finance Sector Professionals - October, 2011
The Victorian Government has announced an initial package of reforms of the government's strategic overhaul of the Victorian Funds Management Corporation (VFMC) to refocus the VFMC business strategy, and improve governance and oversight, as well as operational reforms to ensure VFMC delivers optimal performance for Victoria.
The State Government commissioned KPMG to undertake the initial review of governance, operations and investment strategies of the VFMC earlier this year, who published a review recommending improvements in the area of governance and risk management and found that greater clarity is needed in the strategic direction of VFMC and questioned, in particular, whether VFMC should compete for and manage private money.
These initial reforms include:
- VFMC will be focused on the effective management of public sector client funds and will not be permitted to manage private sector monies;
- VFMC's objectives will be clarified to focus the organisation as a best practice manager of public sector funds, removing broader industry policy objectives such as being a 'centre of investment excellence' in the private funds management industry;
- A new prudential standard and an independent prudential supervisor will oversee VFMC. The prudential supervisor will monitor and periodically report to government on VFMC's risk management policies and practices;
- VFMC's fee structure will be revised to more closely reflect a cost-based model with annual benchmarking;
- Bonuses will be funded from performance fees paid by clients in the event that VFMC outperforms for the individual client. This will help to ensure a stronger link between remuneration and client-specific performance;
- The government will work with the VFMC board to ensure that criteria for the short term incentive bonus scheme are strongly weighted towards measurable investment outperformance;
- Investment benchmarks will be realigned to ensure focus on individual client portfolio performance rather than aggregate VFMC-wide portfolio performance;
- A new set of performance indicators will include a measurable client satisfaction Key Performance Indicator;
- The VFMC will be required to justify the costs of in-house funds management in comparison to the outsourcing to external managers, allowing for a transparent assessment of the value generated by in-house management;
- The government will continue its ongoing efforts to ensure the VFMC Board is of an appropriate size and has the requisite skills, knowledge and experience required at board level; and
- Amendments to corporate governance practices will be introduced to bring VFMC more closely in line with best practice for listed companies. These amendments include a number of changes in relation to Nomination and Board Charters, Audit, and Disclosures.
The Australian Council of Superannuation Investors has published its Anti-corruption and Bribery Practices in Corporate Australia: A review of the S&P/ASX200 research paper, investigating the risk of bribery in Australia's top 200 listed companies.
ASIC chairman Greg Medcraft has outlined the future agenda of the Commission, saying that he plans for ASIC to move beyond being a compliance organisation into an intitution that promotes education and other initiatives, such as teaching of financial literacy topics in schools.
Bendigo and Adelaide Bank has launched its latest securitisation program that will see the company issue securities with an estimated value of $500 million.
Commsec has published its quarterly State of the States report into the financial health of each of Australia’s states and territories. The report highlights eight key indicators: economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance and dwelling commencements.
Former Reserve Bank board member Professor Warwick McKibbin has called for the Federal Opposition to withdraw its pledge to scrap the Federal Government’s carbon tax, saying they should concentrate on repairing the scheme.
A consortium of climate change investment groups have called for long-term climate change and clean energy policies to allow for significant opportunity growth in clean and renewable energy technology and energy efficiency.
Superannuation group Industry Funds Management (IFM) has launched a national advertising campaign aimed at showcasing the commitment of the superannuation industry towards nation building infrastructure projects.
The Federal Government has announced the terms of reference and appointments to the Business Tax Working Group that is charged with conducting an inquiry into how the tax system can best assist businesses respond to a changing economy.
The Federal Government has announced Jillian Broadbent will chair an exprt review that will advise the government on the design of the $10 billion Clean Energy Finance Corporation, which will be tasked with providing a new source of finance for renewable energy, energy efficiency and low emissions technologies.
New quarterly Insolvency and Trustee Service Australia results have shown a decrease in bankruptcies in the September 2011 quarter, recording a decrease by 9.3 per cent compared to the same time last year.
Reserve Bank board member Jillian Broadbent will lead an expert review panel to advise the federal government on the design of its $10 billion Clean Energy Finance Corporation.
The International Monetary Fund has prasied Australia’s economic position, saying that the country is well positioned to continue to reap the benefits from the ongoing commodity boom, a sound financial policy framework and a stable financial services sector.
The Australian Stock Exchange is calling for comments from stakeholders on a consultation paper it has released on the Listing Rule reporting requirements that apply to mining, and oil and gas companies.
The Australian Trade Commission (Austrade) has released the 2011 Benchmark Report: Australia – A wealth of Opportunities, highlighting Australia’s economic strength and its attraction as a regional financial services centres.