This new regime, slated to replace the current Banking Executive Accountability Regime (BEAR), introduces an enhanced framework for accountability and responsibility for entities regulated by APRA in the insurance, banking, and superannuation sectors, affecting their board members and top executives.
The goal behind FAR is to bolster governance and risk management practices within these institutions.
The detailed package unveiled by APRA and ASIC includes:
The release of the financial rules and further guidance comes on the heels of a joint consultation by APRA and ASIC on the draft versions of the regulator and transitional rules, along with the ADI key functions guidance.
Following the consultation, the regulators shared a joint letter highlighting the main concerns and their responses, particularly focusing on the gathering of data for the FAR register and the handling of key functions.
These rules and guidelines build upon the initial FAR information package distributed by APRA and ASIC in October.
The FAR is set to be enforced starting March 15, 2024, for the banking sector, with the superannuation and insurance sectors to follow on March 15, 2025.
The next steps involve APRA and ASIC consulting on the specific key functions for the insurance and superannuation entities, indicating a continuous effort to streamline the implementation of FAR across different sectors of the Australian financial industry.