The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have published an information package to support the financial services industry in implementing the Financial Accountability Regime (FAR).

The information package comprises:

• the Joint Administration Agreement between APRA and ASIC setting out the framework within which the regulators will work together to administer the FAR; and
• a joint information paper providing guidance for ADIs on transitioning from the BEAR to the FAR, supported by the ADI accountability statement guidance and template.

In administering the FAR, ASIC’s role is to focus on impacts to market integrity and consumer protection in the financial system and payments system; APRA’s role is to focus on impacts to the prudential soundness of regulated entities as well as the financial stability of the overall system.

The FAR replaces the BEAR, which came into effect on 1 July 2018 and was solely administered by APRA. In addition to authorised deposit-taking institutions (ADIs), the FAR will apply to insurance companies, superannuation trustees and licensed non-operating holding companies (NOHCs).

Additionally, the FAR introduces conduct-focused prescribed responsibilities, and will be jointly administered by APRA and ASIC.

The FAR will come into force for the banking industry on 15 March 2024 and for the superannuation and insurance industries on 15 March 2025.

BEAR deferred remuneration obligations continue to apply to ADIs until 15 September 2024 when the FAR deferred remuneration obligations will commence.

APRA has registered an updated CPS 511 setting out the new remuneration disclosure requirements .

APRA and ASIC intend to shortly publish the Regulator Rules and Transitional Rules for ADIs and the Key Functions Descriptions. Background.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.