Financial Accountability Regime (FAR) – Draft legislation proposed for 2020
The Financial Accountability Regime (FAR) will seek to further deliver greater transparency and accountability, and improve risk culture. It will replace the Banking Executive Accountability Regime (BEAR).
FAR will extend the responsibility and accountability framework to all APRA regulated entities. This includes insurers, Registrable Superannuation Entity licensees and Banks (already subject to BEAR) as well as to their directors and senior executives.
While the Government has not yet proposed, a commencement date for FAR, legislation is expected by the end of the year.
FAR rewrites the mandatory for corporate governance, culture and accountability risks and attaches larger penalties not only for entities but also individuals who fail to meet the new standards.
According to Treasurer Josh Frydenberg the proposed changes ‘will ensure that senior executives of these financial entities will be more accountable for the activities of the organisation for which they are responsible and impose strict consequences for those who fail to perform their roles with competence, honesty or integrity’.