Financial Accountability Regime (FAR)

Manage an end-to-end implementation of your FAR project, based on years of global experience

Summary

The Financial Accountability Regime (FAR) is arguably the most significant change to Australia’s financial services regulatory landscape in a generation.

It requires banks, insurers, and superannuation funds to identify directors and senior executives, detail their specific responsibilities in ‘accountability statements’, and conduct their activities in accordance with broader obligations (e.g. ‘integrity’, ‘skill’ and ‘co-operation’) with ASIC and APRA. There are significant sanctions for both institutions and individuals under FAR, including disqualification. FAR replaces the Banking Executive Accountability Regime (BEAR) and came into effect for authorised deposit-taking institutions (ADIs) and their authorised non-operating holding companies (NOHCs) on 15 March 2024. For insurers and registrable superannuation entities (RSEs), FAR will commence on 15 March 2025. 

The FAR is a regulatory hydra. It is easy to understand in theory, but difficult to implement in practice – new heads keep emerging! Remuneration under CPS 511, operational risk management under CPS 230, information security under CPS 234, steps to mitigate against cyber-attacks, Design & Distribution Obligations – FAR touches them all, and imposes personal liability for failing to take ‘reasonable steps’ to get them right. 

How we can help

Our expertise is specific, nuanced, and timely.

We are not learning on the job. Having worked on over 20 executive accountability regime implementation projects in the United Kingdom, Hong Kong, and Australia, we have developed a detailed understanding of the FAR regime that leverages our extensive prior experience.

A particular area of expertise is assisting clients with complex cross-jurisdictional groups understand how the new legislation will impact operational structures (including in relation to competing threshold requirements applicable to branches and subsidiaries) and reporting lines both within and outside of Australia.

The team is happy to offer presentations and initial consultations to you on how FAR may impact your executives and directors. Get in touch with our key team members below or reach us via our dedicated FAR email group!

 

Resources

• FAR Legislation

• FAR Explanatory Memorandum

• FAR Minister Rules

• FAR Regulator rules

• FAR Transitional Rules

• FAR - Clyde & Co Consultation

• FAR - APRA

• FAR Accountability Statement Guidance and Template