Parliament has passed the legislation to implement the Financial Accountability Regime, completing the final major recommendation made by the Banking Royal Commission.
Minister for Financial Services, Stephen Jones, says the FAR replaces and extends the Banking Executive Accountability Regime “…by imposing tough new accountability obligations on banks, insurers, and superannuation funds. The FAR ensures that these institutions clearly identify individuals who will be held accountable for the actions of the organisation.”
He notes that an executive who breaches these obligations can be penalised with a loss of income, disqualification from working in the sector, and individual civil penalties for assisting in the organisation’s contravention of its obligations.
…The FAR will apply to the banking industry six months after Royal Assent and to the insurance and superannuation industries 18 months after Royal Assent…
The FAR will apply to the banking industry six months after Royal Assent and to the insurance and superannuation industries 18 months after Royal Assent.
Jones says this follows the Government’s passage of legislation to establish a Compensation Scheme of Last Resort, which will deliver compensation of up to $150,000 to victims of financial misconduct that have an unpaid determination from the Australian Financial Complaints Authority.
“The ten largest eligible financial institutions will be required to provide compensation of around $230 million to victims for heritage claims as part of this scheme,” he states.
