The Banking Executive Accountability Regime should be extended to superannuation.
This is one of nine recommendations for the superannuation sector Commissioner Kenneth Hayne has pushed for in his final report released overnight.
The BEAR came into effect for large ADIs on 1 July 2018 and becomes applicable for the smaller players one year later.
It requires an 'accountable person' that holds a board or senior executive position to register with APRA and conduct the business with honesty and integrity, and with due skill, care and diligence.
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There is no reason why directors and senior executives of superannuation funds should not be subject to similar statutory obligations imposed on members of the board and banking executives by the BEAR, he said.
Hayne argued that failures of governance must be examined by the regulator. "It is this last step that is necessary if trustees of RSEs are to be held properly accountable for their failures of governance," he said.
Having suggested this, Hayne wants ASIC and APRA to jointly administer the BEAR.
When community expectations are not met, Hayne said appropriate consequences should follow for those accountable.
He sees ASIC undertaking a regulatory role with the power to commence proceedings with respect to accountability obligations, namely consumer protection and market conduct matters.
APRA would be responsible for initiating civil penalty proceedings.
"It would be prudent to enable both ASIC and APRA to seek disqualification of accountable persons if they are satisfied that an accountable person has breached his or her accountability obligations, although I would expect that the power would ordinarily be exercised by APRA."
He's also calling for the BEAR to apply to all APRA-regulated insurers to ensure better accountability of life insurance executives.
APRA commented that many of the recommendations are consistent with submissions it made to the Commission. This includes broadening BEAR to other industries.
Currently, APRA is reviewing its enforcement strategy with the help of an independent expert panel.
It involves assessing when to hold individuals to account, particularly under the BEAR.
The review will produce a final report APRA expects to be completed by the end of March 2019 and published shortly thereafter.