Regulation Impact Statement Updates

Official website for publishing regulatory impact analysis information for regulatory decisions announced by the Australian Government, COAG and COAG Councils.

Banking Executive Accountability Regime

Aust Gov
15th November 2017

Regulation Impact Statement – Department of the Treasury

On 19 October 2017, the Government introduced the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2017 to establish a strengthened responsibility and accountability framework for the most senior and influential executives and directors in Authorised Deposit-taking Institutions (ADIs) and their subsidiaries – the Banking Executive Accountability Regime (BEAR).

Key features of BEAR:

  • ADIs are required to register their accountable persons – the senior executives and directors who influence the conduct and behaviours of staff – with the Australian Prudential Regulation Authority (APRA).
  • Accountability obligations, including standards of behaviour and conduct, are specified for accountable persons.
  • APRA will have the power to take action where the standards are not met.
  • Rules for remuneration policies, including a requirement to defer a proportion of the remuneration of an accountable person for a period of four years.

The Office of Best Practice Regulation (OBPR) assessed the Regulation Impact Statement (RIS) prepared by the Department of the Treasury as compliant with the Government’s RIS requirements, but the process undertaken was not consistent with best practice. The OBPR considered that to only provide one week for affected stakeholders to consider and comment on draft legislation was a significant departure from best practice.

The RIS estimates the average annual regulatory costs of the proposal at $11.5m a year. The OBPR has agreed to this estimate.

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