APRA and ASIC have released key materials for consultation to support the implementation of the Financial Accountability Regime by the financial services industry.
A statement from ASIC says 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.”
It says that in doing so “…it is designed to improve the risk and governance cultures of those financial institutions.”
ASIC says the FAR will replace the Banking Executive Accountability Regime which came into effect on 1 July 2018, and is solely administered by APRA.
…the FAR will also apply to insurance companies, superannuation trustees and licensed non-operating holding companies…
“In addition to authorised deposit-taking institutions the FAR will also apply to insurance companies, superannuation trustees and licensed non-operating holding companies. It will be jointly administered by APRA and ASIC.”
The regulator notes the FAR will apply to ADIs six months after the Financial Accountability Bill 2023 receives Royal Assent, and to insurance and superannuation entities 18 months following Royal Assent.
To support early engagement with entities and to enable the timely implementation of the FAR, APRA and ASIC have released a package of documents for consultation including:
- Proposed regulator rules that prescribe information for inclusion in the FAR register of accountable persons, including supporting detail about the ADI key function descriptions
- Proposed transitional rules that prescribe information to be provided by banking entities in relation to their existing accountable persons under the BEAR at the transition point
…the regulators will consult on the list of specific key functions for insurance and superannuation entities in due course…
ASIC says the regulators “…will consult on the list of specific key functions for insurance and superannuation entities in due course.”
However, it says “…these entities may wish to review the regulator rules as their key functions are likely to be similar to the list included for ADIs. 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.”
APRA and ASIC are seeking industry feedback on the proposed regulator rules, including ADI key functions and transitional rules. The closing date for submissions is 17 August 2023.
Further industry engagement will follow after the Bill is passed by Parliament and receives Royal Assent.
Click here to see the documents for consultation.
