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Following the introduction of the Financial Accountability Regime (FAR) legislation to the House of Representatives on 28 October 20211, FAR is still on track to commence on 1 July 2022 for ADIs and NOHCs and 1 July 2023 for all other APRA regulated entities2.
As entities work towards their respective commencement dates, they may be at different stages of their journey:
- For ADIs transitioning from the Banking Executive Accountability Regime (BEAR) to FAR, we have set out below the key activities that will assist in an effective and successful transition.
- For other APRA regulated entities just starting out on their FAR journey or that have previously commenced their FAR journey based on BEAR, the July 2021 FAR Exposure Draft legislation and/or Treasury’s January 2020 Proposal Paper3, please check out our webpage on preparing for FAR (here) and our blogs on the key requirements of FAR (here), and the key changes from BEAR to FAR (here).
Key activities for ADIs transitioning from BEAR to FAR:
During transition, ADIs should consider how efficiencies can be created for their entities that may come under the regime at a later date (e.g. their insurance arms or ASIC-regulated entities).
If you have not already commenced your transition, we recommend starting now in order to overcome any nuances that weren’t contemplated under BEAR, and to be operating in BAU by 1 July 2022.
If you have any questions or comments, or require assistance, please contact us.
1) The Financial Accountability Regime Bill 2021 was introduced to the House of Representatives for its first reading on 28 October 2021. The Bill differed from the FAR Exposure Draft legislation released by Treasury in July 2021. The Bill still needs to go through a second and third reading before going to the Senate and being passed. We understand the Bill is on track for passing by 2 December 2021 (the final Senate sitting of 2021). We will provide commentary on any substantial changes between the Exposure Draft to the final Bill as warranted.
2) All other APRA regulated entities including general insurers, authorised NOHCs of a general insurer, a life company, a registered NOHC of a life company, a private health insurer or an RSE licensee.
3) Treasury’s January 2020 FAR Proposal Paper is accessible here and July 2021 FAR Exposure Draft legislation is accessible here.
4) A ‘significant related entity’ of an ADI includes those subsidiaries that have a material and substantial effect on the accountable entity or the business or activities of the accountable entity, is constitutionally covered body and is not an accountable entity itself (as opposed to capturing all subsidiaries under BEAR).
Rosalyn is a partner in Deloitte's Melbourne office in the Governance, Regulation and Conduct practice. She specialises in supporting firms to design and assess frameworks to treat customers fairly, including the development of conduct, product governance, sales practices and complaints handling frameworks. Rosalyn co-leads our Accountability practice and leads Deloitte’s Design and Distribution and product governance offering.
Erin is a Senior Manager in Deloitte’s Melbourne office in the Governance, Regulation and Conduct practice. She specialises in supporting clients across the financial services sector in designing, implementing and reviewing frameworks, policies and procedures focused on preventative conduct and promoting good customer outcomes. Erin’s key areas of practice are accountability regimes and regulatory change.
Ashlee is a Senior Analyst in Deloitte’s Governance, Regulation and Conduct team. Ashlee has experience supporting clients to implement and review their frameworks, policies and procedures related to promoting good customer outcomes and compliance with relevant regulatory requirements.