APRA and ASIC unveil final guidelines for Financial Accountability Regime

APRA and the ASIC have released a comprehensive suite of materials to assist insurers and superannuation trustees in preparing for the Financial Accountability Regime (FAR). 

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released a comprehensive suite of materials to assist insurers and superannuation trustees in preparing for the Financial Accountability Regime (FAR). Already in effect for the banking industry, FAR will extend its reach to the insurance and superannuation sectors starting March 15, 2025.

The FAR framework aims to enhance the risk governance cultures of APRA-regulated entities, focusing on the responsibilities of directors and senior executives. This newly released package provides critical updates and tools to help these entities comply with FAR's requirements.

Key elements of the FAR guidance package

Amendment to Regulator rules: One of the pivotal updates is the amendment to the Regulator rules. This amendment prescribes detailed information on key functions that need to be included in the FAR register of accountable persons for the insurance and superannuation industries.

Joint regulator communication: A joint letter from ASIC and APRA summarises critical issues raised during the public consultation phase and outlines the regulators' responses. This communication clarifies the concept and application of key functions, ensuring that entities understand their obligations under FAR.

Updated guidance materials: The guidance package includes several updated documents designed to aid entities in navigating the FAR framework:

• Information paper: This updated document assists entities and accountable persons in understanding and complying with their FAR obligations, reflecting the final list of key functions and their descriptions.
• Accountability statement guide and template: These tools are tailored to help entities prepare the required accountability statements in line with FAR's obligations.
• Reporting form instructions: These instructions are aimed at assisting insurance and superannuation entities in providing the necessary information to APRA and ASIC efficiently.

Consultation and industry engagement

The release follows a thorough joint public consultation on the draft amendments and key functions descriptions. The regulators have incorporated feedback from industry stakeholders, making necessary adjustments to the final rules and descriptions. The response to the consultation and non-confidential submissions can be accessed on the FAR consultation page.

For more detailed information and access to the guidance materials, stakeholders can visit the Financial Accountability Regime sections on the APRA website.