The Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) 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, Financial Accountability Regime Act (Information for register) Regulator Rules 2024,
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, Financial Accountability Regime (Consequential Amendments) Transitional Rules 2024,
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 ASIC and APRA.
The release of these materials follows a joint public consultation on the draft Regulator rules, Transitional rules and ADI key functions descriptions.
ASIC and APRA 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 ASIC and APRA.
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. ASIC and APRA will next consult on the proposed key functions for insurance and superannuation entities.