Financial Accountability Regime legislation re-introduced to Parliament
The Federal Government has re-introduced the Financial Accountability Regime Bill (FAR) to Parliament. The key aspects of the FAR have remained unchanged under the New Bill.
The FAR will apply to “accountable entities” (RSE licensees as well as banks and insurance companies), and to “accountable persons” (APs). Within RSEs, accountable persons include trustee directors and senior executives in the accountable entity or in a body corporate of connected entity. Connected entities are defined the Corporations Act and include entities with a “material and substantial” effect on an accountable entity or its business or activities.
Core obligations of FAR:
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The Accountability Obligations encourage APs to act with honesty, integrity, and due care, skill and diligence, as well as dealing with ASIC and APRA in an open, constructive and cooperative way.
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Key Personnel Obligations seek to ensure that responsibilities covering all aspects of the operations of the accountable entity and its significant related entities are appropriately allocated to APs. APs must be registered in advance of appointment with the Regulator and not disqualified.
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The Deferred Remuneration Obligations require that at least 40% of an AP’s variable remuneration is deferred for at least the “minimum deferral period” (generally a period of 4 years).
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The Notification Obligations consist of “core” and “enhanced” notification obligations.
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Core notification obligations require accountable entities to notify the Regulator within 30 days if certain events occur; and
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Enhanced notification obligations, in contrast, apply to accountable entities with FUM greater than $10 billion.
The FAR will be administered by APRA and ASIC jointly.
The start date for the RSEs will be 18 months after the date when the is approved by both houses of Parliament.
For more information please contact Holly Lindsay hlindsay@aist.asn.au or Kate Brown kbrown@aist.asn.au.