The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released proposed rules for consultation which will support the implementation of the Financial Accountability Regime (FAR).
The FAR is due to apply to authorised deposit-taking institutions (ADIs) six months after the Financial Accountability Regime Bill 2023, which was introduced into parliament in March, receives royal assent, and to insurance and superannuation entities a year later.
According to APRA and ASIC, the new regime “aims to improve accountability standards in APRA-regulated entities, drive reform in operating culture and reinforce the standards of conduct expected by the Australian community”.
“The FAR will impose a strengthened responsibility and accountability framework for APRA-regulated entities in the banking, insurance, and superannuation industries and their directors and most senior and influential executives,” the regulators said in a joint statement on Thursday.
“In doing so, it is designed to improve the risk and governance cultures of those financial institutions.”
Among the package of documents up for consultation are draft regulator rules, which prescribe information for inclusion in the register of accountable persons which will be established as part of the FAR, including supporting detail regarding ADI key functions.
These rules are complemented by draft transitional rules, which prescribe information to be provided by ADIs when transitioning from the Banking Executive Accountability Regime (BEAR), which originally came into effect on 1 July 2018 and will be replaced by the FAR.
“The regulators will consult on the list of specific key functions for insurance and superannuation entities in due course. However, these entities may wish to review the regulator rules as their key functions are likely to be similar to the list included for ADIs,” APRA and ASIC said.
“The list of data items for inclusion in the FAR Register, which are set out in the regulator rules, are relevant to all accountable entities.”
Since the Financial Accountability Regime Bill 2023 remains under consideration by Parliament, the regulators noted that their draft regulator and transitional rules would be reviewed if any amendments occur and these changes impact the rules.
The consultation will remain open to submissions until 17 August with APRA and ASIC that further industry engagement will follow once the bill passes and receives royal assent.
