APRA has released an information paper to assist authorised deposit-taking institutions in meeting their obligations under the Banking Executive Accountability Regime.
The APRA released guidelines is aimed at assisting all other ADIs prepare to implement the BEAR and helping the largest ADIs refine and embed the regime.
The BEAR will apply to all ADIs from July 2019 after previously just applying to the largest banks.
The regime that established heightened standards of accountability among ADIs and their most senior executives and directors is established under legislation and enforced by APRA.
The guidelines clarify APRA’s expectation of how an ADI can effectively implement the regime on matters including identifying accountable people, establishing remuneration policies for accountable persons and notifying APRA of any changes or breaches.
APRA chairperson Wayne Byres said the BEAR presented an opportunity for directors and senior executives of ADIs to strengthen their accountability.
“Many problems that have arisen in the financial system over recent years have had, at their heart, organisational complexity and diffused responsibility. By effectively implementing the BEAR, ADIs will genuinely enhance their governance and risk management through much clearer understanding and agreement on individual accountabilities,” Mr Byres said.
The paper also includes questions and answers of the most common issues raised by ADIs.
In a subsequent paper, APRA will address enforcement-related issues, including disqualification and civil penalties under BEAR.
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