Draft rules for governing the proposed Financial Accountability Regime (FAR) scheme, a Hayne royal commission recommendation, have been released for consultation.

The Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC), the scheme’s joint administrators, say they are seeking to support “early engagement” as the FAR Bill awaits passage in Parliament. 

The consultation relates to proposed Regulator and Transitional rules when FAR replaces the Banking Executive Accountability Regime (BEAR), the regulators say. The scheme is an expansion of BEAR and will apply to all APRA-regulated entities including insurance when the legislation receives Royal Assent. 

APRA and ASIC say the draft rules are based on the FAR Bill, which was introduced in Parliament on March 8. 

“The rules will be reviewed if amendments to the Bill occur before it is enacted, and those changes impact on the rules,” the regulators say. 

The draft Regulator rules prescribe information for inclusion in the register of accountable persons and to complement these rules, the draft Transitional rules prescribe information to be provided by authorised deposit-taking institutions (ADIs) to the regulators when transitioning to the FAR scheme. 

APRA and ASIC will consult on the list of specific key functions for insurance and superannuation entities in due course but they say the industries “may wish to consider the concept of key functions and review the Regulator rules, particularly as the list of data items for inclusion in the register are relevant to all accountable entities”. 

Law firm Gilbert + Tobin says the consultation materials propose new disclosure rules which will likely intensify the spotlight on directors and senior executives in the banking industry. 

The Regulator rules prescribe information that will be included in a register of accountable persons under FAR that could be disclosed publicly and the ADI key functions descriptions document describes the key things that ADIs will typically consider when developing their accountability statements and which must be included in the register of accountable persons. 

Proposed register information includes details of an accountable person’s date of birth, direct phone number and direct email address; an accountable person’s employment status; and any suspension of the accountable person due to the person’s failure to comply with FAR. 

“Significantly, information on the register may be made available for public inspection on the internet by the regulators,” Gilbert + Tobin says. 

“It is currently unclear whether the regulators propose to make some or all of information on the register publicly available.” 

The FAR Bill’s confirms that the register may be made public at the discretion of the regulators and that this allows the regulators to balance the need for confidentiality of sensitive information about financial services business with the need for public accountability and transparency, says Gilbert + Tobin. 

Closing date for submissions is August 17. 

Click here for the consultation papers.