The Australian Prudential Regulation Authority (APRA) is consulting on a proposal to extend ADI product responsibility beyond already nominated senior executives and directors under the Banking Executive Accountability Regime (BEAR).

APRA’s letter to ADIs proposes requiring ADIs to identify and register an accountable person (that could be a person already registered as an accountable person) to hold end-to-end product responsibility for each product the ADI offers to its customers, including retail, business and institutional customers.

APRA’s proposal is in response to Recommendation 1.17 of the final report of the Royal Commission which recommended that APRA determine for the purposes of subsection 37BA(2)(b) of the Banking Act 1959 (the Act), an end-to-end product responsibility for each ADI subject to the Banking Executive Accountability Regime (BEAR) with the aim of improving customer experience and outcomes.

APRA does not consider it appropriate that the Chief Executive Officer of an ADI holds the end-to-end accountability for all of its products, except for smaller less complex ADIs.

APRA’s proposal includes four key considerations namely, the scope of accountability, coverage of products, mechanism, and joint accountability.

Although APRA’s proposal is not directly relevant to an Australian branch of a foreign ADI, APRA expects all foreign ADIs to consider how they could apply end-to-end product responsibility to their Australian operations and how the accountability statements of their accountable persons would reflect such responsibility.

APRA aims to release a draft schedule for consultation in October 2019 with the requirements expected to be finalised in December 2019. An implementation date of 1 July 2020 is proposed.