Newly released documentation includes regulator rules, transitional rules, descriptions of ADI key functions, and reporting form instructions
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have announced the introduction of final rules and additional guidance for the Financial Accountability Regime (FAR).
The FAR, which replaces the Banking Executive Accountability Regime (BEAR), aims to enhance accountability and responsibility standards for entities within the banking, insurance, and superannuation sectors. The move is part of efforts to foster better risk and governance practices within these financial institutions.
The newly released documentation includes a set of regulator rules, detailing the requirements for entries in the FAR register of accountable persons. It also features transitional rules for authorised deposit-taking institutions (ADIs), guiding them on the information needed for their accountable personnel transitioning from the BEAR to the FAR.
Further, it provides descriptions of key ADI functions to aid banking entities in assigning these roles and instructions for reporting forms, helping banks furnish necessary details to APRA and ASIC.
The rollout is the culmination of a public consultation phase involving discussions on draft versions of the regulator rules, transitional rules, and descriptions of ADI key functions.
APRA and ASIC have further communicated through a joint letter, addressing significant feedback received during the consultation. The letter covers topics such as data collection for the FAR register and the delineation and assignment of key functions.
The finalised rules and guidance build on an information package on the FAR, released by APRA and ASIC in October.
The FAR is scheduled to be implemented for the banking sector on March 15, 2024, with the superannuation and insurance industries to follow on March 15, 2025. The next phase of consultation will focus on the proposed key functions for the insurance and superannuation sectors, as outlined by APRA and ASIC.
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