More than a year after it was recommended by Commissioner Kenneth Hayne, the government has taken steps to extend the Banking Executive Accountability regime to include super funds and other APRA-regulated entities.
Set to be known as the Financial Accountability Regime, the extended regime will impose accountability and key personnel obligations on financial entities, as well as accountability maps and statement obligations, notification obligations, and deferred remuneration obligations.
In its proposal paper, the government said that while the FAR adopts the "essential structure" of the BEAR, it was important for the industry to note key differences, such as that the regime will be co-administered by the two financial services regulators, ASIC and APRA.
Treasurer Josh Frydenberg said the obligations of FAR would make senior financial services executives more accountable for what happens under their watch.
"These obligations will ensure that senior executives of these financial entities will be more accountable for the activities of the organisation for which they are responsible and, consistent with the BEAR, impose strict consequences for those who fail to perform their roles with competence, honesty or integrity," Frydenberg said.
In his final report, Hayne said there was no reason why directors and senior executives of superannuation funds - set to come under the scope of the FAR - should not be subject to similar statutory obligations imposed on board members and banking executives by the BEAR.
The government said that while it was also committed to extending the regime to solely ASIC regulated entities, it would wait until the FAR was implemented for prudentially regulated entities before launching another round of consultation to determine how solely ASIC regulated entities would be brought into the regime, and the responsibilities that may be prescribed for their accountable persons.
The proposal does not include an implementation timeframe for the FAR, with the government intending to consult on timeframes as part of the consultation on the exposure draft legislation.
Consultation is open until February 14.