The Albanese government has announced a new regulatory initiatives grid for the Australian financial sector.
It aims to ensure the standard business of regulation is carried out in a more coordinated way, Treasurer Jim Chalmers explained, to make it “simpler and easier to do business in Australia”.
It will span initiatives from a number of agencies and regulators, such as the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA), the Australian Competition and Consumer Commission (ACCC), the Reserve Bank of Australia (RBA), and the Australian Taxation Office (ATO).
“By engaging with industry, we believe we get better outcomes and that’s what this is all about – promoting transparency, collaboration, and engagement with the private sector is an important part of our economy,” the Treasurer said in a statement.
“A regulatory grid will help financial services businesses engage with the government and regulators more effectively and allow regulators to avoid duplication, build shared strategic priorities, and focus on how to best implement reforms.”
Additionally, it would reduce compliance burden and costs, Chalmers added, by allowing entities to allocate their resources more efficiently when implementing regulation.
Modelled on the existing grid in place in the United Kingdom, it will be a rolling 24-month forward program, updated twice a year, of regulatory initiatives that will materially affect the financial sector. This will include banking, credit, insurance, superannuation, investment, payments, and capital market entities.
It will be established and administered by Treasury and include proposed legislation, rules, and regulation and standard making, consultation processes, and data collection processes.
Chalmers confirmed Treasury will continue to engage with financial sector stakeholders in the development of the grid.
The Australian Banking Association (ABA) has welcomed the federal government’s “regulatory roadmap” with the implementation of the grid, noting there has been “almost 1,200 pages of new laws and regulations” placed on the sector since 2020.
“We’ve seen a similar initiative in the UK deliver productivity gains and more innovation, and now the same will be able to be achieved here in Australia,” said ABA chief executive Anna Bligh.
“Being able to better navigate regulatory reform will allow banks to reduce compliance costs and invest more in areas such as innovation and new technology.
“The introduction of this grid will also be good for competition within the industry, with mid-tier banks having better visibility of regulatory change, enabling them to better plan and allocate resources more effectively.”
Starting this week, the banking sector is also set to comply with the Financial Accountability Regime (FAR), which saw the required ministerial rules signed by Minister for Financial Services, Stephen Jones, on 5 March 2024.
It will apply to banks from 15 March 2024 and to insurance and superannuation entities from 15 March 2025.
A key recommendation of the 2019 Hayne royal commission, the FAR aims to improve accountability for institutions and their senior executives across the banking, insurance and super sectors and expands on the former Banking Executive Accountability Regime (the BEAR), which only applied to the banking sector.
It is to be jointly administered by ASIC and APRA.
