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Consultation: FAR Bill 2022

Wednesday 14 September 2022


Stakeholders will have until 7 October to have their say  on the draft legislation of the Financial Accountability Regime (FAR).

Financial Accountability Regime Bill was reintroduced to parliament as the Financial Accountability Regime Bill 2022 on 8 September and was moved to second reading on the day.

Assistant Treasurer and Minister for Financial Services Stephen Patrick Jones said in his second reading speech, “The bill underscores the government's commitment to finalise the action necessary to fully address the recommendations of the Hayne banking royal commission and implement measures that compel the financial services industry to act in the public's interest.”

The bill was initially introduced to parliament last October but  then lapsed into dissolution with the change of government  in April of this year.

At the time, the of the previous version of the draft bill’s second read the former Minister for Education and Youth Alan Tudge said about FAR, “The regime imposes four core sets of obligations. Firstly, accountable entities and accountable persons must conduct their business in a proper manner, which includes acting with honesty and integrity, and with due skill, care and diligence; dealing with Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) in an open, constructive and cooperative way, preventing adverse impact on the accountable entities' prudential standing and preventing breaches of certain specified financial services laws by the accountable entity.”

The accountability regime will apply to banks six months after the royal assent, and it will apply to the insurance and superannuation 18 months after the royal assent.

The Treasury has identified  three areas of interest in the draft legislation:

  • particular responsibilities and positions which cause a person to be subject to the FAR in the banking, insurance, and superannuation sectors
  • the enhanced notification threshold, which is the total asset size above which an entity is required to comply with additional notification obligations and
  • the way that a written record can be authenticated in a proceeding as prima facie evidence of the statement it records.
Minister Stephen Jones added, “Financial services executives make decisions that impact upon the lives of ordinary Australians, who have no choice other than to engage with the system that they operate. As a result, the community reasonably expects high standards of accountability and integrity of financial services directors and executives.”
 
 
You can find the consultation on the draft legislation here.