The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have announced the publishing of an information package to support the financial services industry in implementing the Financial Accountability Regime (FAR).
In a news release, ASIC said the FAR replaces the Banking Executive Accountability Regime (BEAR), and “fulfils the recommendations made by the Financial Services Royal Commission” that provisions modelled on the BEAR be extended to all APRA-regulated entities. The FAR aims to improve the risk and governance cultures of APRA-regulated financial institutions. It imposes a responsibility and accountability framework for these entities and their directors as well as their most senior executives.
“Just as the BEAR has helped to sharpen risk culture and governance in the banking sector, we expect the FAR to have a similar positive impact in improving standards of accountability across insurance and superannuation,” said Margaret Cole, deputy chair at APRA (pictured). “We are working closely with ASIC to ensure a smooth transition from the BEAR to the FAR, and we encourage industry to engage with both regulators in the lead up to the FAR commencing.”
Sarah Court, deputy chair at ASIC, welcomed the extension of the regime to provide accountability related to conduct failures. “We believe the regime will increase transparency and accountability in financial firms and help embed a culture of accountability for misconduct at an individual level – accountable individuals will need to understand and closely engage with their obligations under the FAR,” Court said.
The information package released includes the following:
The FAR will come into force on March 15, 2024 for the banking industry, and March 15, 2025 for the superannuation and insurance industries.
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