The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released final rules and further guidance to support the financial services industry in implementing the Financial Accountability Regime (FAR).
The FAR, which replaces the Banking Executive Accountability Regime (BEAR), imposes a stronger responsibility and accountability framework for APRA-regulated entities in the banking, insurance and superannuation industries and their directors as well as their most senior executives. In doing so, the FAR aims to improve the risk and governance cultures of those financial institutions.
Today’s package includes:
- the Regulator rules, which prescribe information for inclusion in the FAR register of accountable persons;
- the Transitional rules, which prescribe information to be provided by authorised deposit-taking institutions (ADIs) in relation to their existing accountable persons under the BEAR at the transition point to the FAR;
- descriptions of ADI key functions to assist banking entities in the allocation of key functions; and
- reporting form instructions to assist banking entities in providing the required information to APRA and ASIC.
The release of these materials follows a joint public consultation on the draft Regulator rules, Transitional rules and ADI key functions descriptions.
APRA and ASIC have also issued a joint letter summarising key issues raised during consultation and their response, including the collection of information and data for the FAR register and the concept and application of key functions.
The finalised rules and guidance complement the FAR information package released on 3 October 2023 by APRA and ASIC.
The FAR will come into force for the banking industry on 15 March 2024 and for the superannuation and insurance industries on 15 March 2025. APRA and ASIC will next consult on the proposed key functions for insurance and superannuation entities.
Download the new Financial Accountability Regime information package.
