Australia’s government has introduced legislation to establish the Financial Accountability Regime (FAR), which will extend the Banking Executive Accountability Regime (BEAR) to all Australian Prudential Regulatory Authority (APRA)-regulated entities — including superannuation trustees and related entities — as recommended by the Financial Services Royal Commission. FAR’s objective is to impose a strengthened accountability framework for the directors and most senior and influential executives of APRA-regulated entities and is aligned with the final Prudential Standard CPS 511 on remuneration released in August.
FAR will be jointly administered by APRA and the Australian Securities and Investments Commission, which can disqualify someone from being an accountable person of an accountable entity or direct an accountable entity to reallocate responsibilities of an accountable person to address prudential risks or systemic risks of noncompliance.
FAR is scheduled to apply to the banking sector from the later of 1 Jul 2022 or six months after FAR commences, at which time the BEAR legislation will be repealed. FAR would apply to other sectors, including superannuation, from the later of 1 Jul 2023 or eighteen months after FAR commences.