The Banking Executive Accountability Regime (“BEAR”) has applied to large authorised deposit-taking institutions (“ADIs”) in Australia since July 2018 and small and medium ADIs since July 2019. In January 2020, following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Treasury issued a Proposal Paper which set out the intention to implement recommendations 3.9, 4.12, 6.6, 6.7 and 6.8 to extend BEAR to all APRA-regulated entities and provide joint administration to ASIC as the conduct regulator through the introduction of the Financial Accountability Regime (“FAR").
The purpose of FAR is to implement a strengthened responsibility and accountability framework for directors and the most senior and influential executives in financial services organisations. The regime is intended to complement and reinforce the existing regulatory framework, rather than replace it or create a substantial new set of obligations and mandatory requirements.
Almost 18 months on, Treasury has released the Exposure Draft Legislation (“ED”) (together with the Draft Explanatory Materials, Information Paper on Joint Administration, and Policy Proposal Paper on Prescribed Responsibilities and Positions). We have set out the key elements of the regime below.