The FAR seeks to improve the risk and governance cultures of APRA-regulated entities in the banking, insurance, and superannuation industries.
The FAR will replace the Banking Executive Accountability Regime (BEAR) which will impose a strengthened responsibility and accountability framework for financial institutions.
BEAR took effect in July 2018 and is solely administered by APRA. The FAR, on the other hand, will be jointly administered by APRA and ASIC.
The FAR will apply to authorised deposit-taking institutions six months after the Financial Accountability Bill 2023 receives royal assent.
Meanwhile, insurance and superannuation entities will have to adopt the FAR 18 months following royal assent.
To support the FAR’s implementation and early engagement with companies, APRA and ASIC released documents for consultation.
These include proposed regulator rules prescribing information for the inclusion in the FAR register of accountable persons, including supporting detail about ADI key function descriptions.
The documents also include the proposed transitional rules prescribing information from banking institutions in relation to their existing accountable persons under the BEAR at the transition point.
According to the regulators, they will consult on the list of specific key functions for insurance and superannuation institutions in due course but noted that such key functions may likely be similar to the list included for ADIs.
The regulator rules include the list of data items for inclusion in the FAR register and are relevant to all accountable institutions.
For now, APRA and ASIC are open to industry feedback on the proposed regulator rules until 17 August.
