The Financial Services Minister, Stephen Jones, confirmed that the FAR had passed Parliament back in September, completing the final major recommendation made by the royal commission.
The regime replaces and extends the Banking Executive Accountability Regime (BEAR) by imposing new accountability, key personnel, deferred remuneration, and notification obligations on directors and senior executives.
While the FAR was set to apply to the banking industry six months after royal assent, the regulators on Monday issued a joint statement announcing they’ve had to push back enforcement of the regime due to a delay in the minister’s office.
The Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA), tasked with administering the FAR, have stated that although the FAR was scheduled to start for the banking industry on 15 March, the ministerial rules are still being finalised. This means the regulators cannot issue their set of rules to guide banks in executing the FAR.
Consequently, the regulators are giving banks extra time to prepare.
“Given that the Minister Rules are in the process of being finalised, APRA and ASIC recognise that the industry may require additional time, beyond the commencement date, to finalise compliance with the new FAR requirements in relation to submitting applications for registration of new accountable persons; and complying with core or enhanced notification obligations,” the regulators said in a joint statement.
“Notwithstanding this, given the guidance currently available, we expect entities to submit their registration applications and to make relevant notifications to us as promptly as possible, and by no later than 30 June 2024.”
ASIC and APRA confirmed that following the release of the Minister Rules, they will release the Regulator Rules, Transitional Rules and reporting form instructions, and provide further details in relation to APRA Connect FAR form availability and FAR entity profile submissions.
In a statement provided to InvestorDaily, a spokesperson for the Assistant Treasurer, Stephen Jones, said the ministerial rules would be finalised by 15 March. The spokesperson hinted that the delay is because they are still processing submissions received during the government’s consultation in 2022.
“The government is committed to genuine consultation so that regulation is proportionate. Feedback was received on the draft Minister Rules and Regulator Rules, and the government and regulators are actioning that input, with both sets of rules to be finalised before 15 March,” the spokesperson said.
“Independently of the rules, from 15 March banks will be required to comply with important accountability obligations to act with honesty and integrity, with due skill, care and diligence.”
The spokesperson added that “the Financial Accountability Regime will improve the governance culture within the financial sector and the government is committed to its implementation”.