Information package released as the Financial Accountability Regime (FAR) begins rollout

ASIC and APRA have released a cross-industry information package about FAR to assist stakeholders.  

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released a new information package – that includes rules and guidance materials regarding how the Financial Accountability Regime (FAR) will operate.   

The rollout and implementation of FAR will impact financial services companies across the board, including banks, insurers, and superannuation trustees. The ongoing rollout of FAR replaces the Banking Executive Accountability Regime (BEAR) and is expected to impose a stronger accountability framework to help improve the risk-governance culture of APRA-regulated entities.   

The release of the cross-industry package includes the following:  

• An information paper to assist entities and their accountable persons in understanding and complying with their obligations under the FAR,  
• An updated accountability statement guide and template to help entities subject to the FAR enhanced notification obligations to prepare accountability statements and  
• Reporting form instructions to assist entities in reporting FAR breaches to APRA and ASIC.  

The FAR came into effect for banking last week, on 15th March 2024. The regime took effect one year later, on 15th March 2024, for the superannuation and insurance industries. The information package also contains information that will be particularly useful for the insurance industry in preparation for the FAR coming into force next year.   

The insurance industry should take note of the following:  

• A joint letter that outlines the steps insurance and superannuation entities should take ahead of the FAR’s commencement on 15th March 2025 and  
• Proposed amendments to the Regulator rules and drafted key function descriptions for insurance and superannuation entities.  

Consultation documents are available for review at the APRA website. Meanwhile, guidance materials related to the information package can be found at the ASIC website.