When did FAR commence?

The Financial Accountability Regime (FAR) commenced for ADIs (banking) on 15 March 2024 under the Financial Accountability Regime Act 2023. Commencement for insurance entities and RSE licensees (superannuation) followed on 15 March 2025. FAR replaced the Banking Executive Accountability Regime (BEAR) and is jointly administered by APRA and ASIC.

Who are the accountable persons under FAR?

Accountable persons are directors and senior executives with substantial influence over the management or control of significant parts of an APRA-regulated entity. Each must have an accountability statement identifying the parts of the entity they are responsible for. They must be registered with APRA and ASIC and must comply with the four accountability obligations under section 21 of the FAR Act including honesty, integrity, due skill and cooperative dealing with regulators.

Financial Accountability Regime (FAR): Commenced 15 March 2024

Financial Accountability Regime Act 2023 commenced 15 March 2024 for banking, with phased start for insurance and superannuation: accountable persons, accountability statements and statement of accountabilities.

FAR statutory framework

The Financial Accountability Regime (FAR) is underpinned by the Financial Accountability Regime Act 2023 (Cth) (FAR Act). This Act replaces the Banking Executive Accountability Regime (BEAR) and expands its scope to include the insurance and superannuation sectors.

The FAR commenced operation for ADIs (banking) on 15 March 2024. Insurers and RSE licensees (superannuation) will be subject to the FAR from 15 March 2025.

The FAR is jointly administered by APRA and ASIC. Consequential amendments to the Banking Act 1959 and other legislation were made through the Treasury Laws Amendment (Financial Accountability Regime) Act 2023.

Accountable persons and statements

The Financial Accountability Regime (FAR) applies to ‘accountable persons’ within APRA-regulated entities. These accountable persons are directors and senior executives who hold substantial influence over the management or control of significant parts of the entity.

Each accountable person is required to have an accountability statement. This statement identifies the specific parts of the entity for which they are responsible. Entities must also maintain an accountability map, which illustrates how accountable persons are structured and outlines the entity’s overall accountability framework.

Accountable persons must register with both APRA and ASIC. Failure to register, or to maintain accurate accountability statements, constitutes a contravention of the FAR Act.

Accountability obligations

Accountable persons are subject to four accountability obligations, as outlined in section 21 of the Financial Accountability Regime (FAR) Act. These obligations require accountable persons to act with honesty and integrity, with due skill, care and diligence; deal with regulators in an open, constructive and cooperative way; take reasonable steps to prevent matters arising that would adversely affect the entity's prudential standing or reputation; and take reasonable steps to ensure the entity complies with its statutory obligations.

Entities also have parallel obligations to support and enforce these accountability obligations. To facilitate this, entities must maintain risk and remuneration policies that reflect the prescribed accountability obligations.

Variable remuneration of accountable persons is subject to specific requirements under section 39 of the FAR Act, including deferral and clawback arrangements. For senior accountable persons of the largest entities, at least 40% of variable remuneration must be deferred for a period of at least 4 years.

Enforcement and consequences

The Financial Accountability Regime (FAR) Act provides for enforcement action against accountable persons for non-compliance. Individuals may face civil penalties, with the maximum being the greater of $1,565,000 or three times the benefit obtained. Body corporates face higher maximum civil penalties, the greater of $15.65 million, three times the benefit, or 10% of annual turnover.

APRA has the power to disqualify accountable persons under section 47 of the FAR Act. Common contraventions that may lead to enforcement action include failure to register accountable persons, providing inaccurate or incomplete accountability statements, and failing to comply with accountability obligations.

ASIC has additional enforcement powers in relation to accountable persons of entities it regulates. These powers are in addition to those held by APRA.