On 4 February 2019, the Morrison Government announced it would implement recommendations 3.9, 4.12, 6.6, 6.7 and 6.8 of the Financial Services Royal Commission to extend the Banking Executive Accountability Regime (BEAR) to all APRA-regulated entities e.g. banks, insurance and superannuation firms and provide joint administration to ASIC as the conduct regulator.
On 22 January 2020, The Treasury released the Government’s proposed model. The consultation time for the extended BEAR – now to be called the “Financial Accountability Regime” (FAR) (not the “Financial Executive Accountability Regime” or FEAR as some had hypothesized) – is very short.
On 14 February 2020, the consultation period will close. Affected entities need to consider whether they wish to make a submission now. The draft legislation will be introduced to Parliament by the end of 2020. After the consultation period ends, affected entities then need to start preparing for the implementation of FAR. This will include an analysis of governance frameworks to determine the likely accountable person population and their key responsibilities. Banks will need to revisit their BEAR frameworks. In our experience, undertaking this regulatory change project can prove to be unexpectedly time-consuming.
The changes proposed by the Government with the FAR regime are significant and include:
In this briefing, we summarise the key points of the Government’s proposal, provide initial analysis and practical guidance to assist affected entities.
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Matt Bode, Partner