On 17 December 2021, the AICD lodged a submission with the Senate Standing Committee on Economics on the Financial Accountability Regime Bill 2021 (FAR Bill).
The AICD has engaged extensively in the consultation on the development of the Financial Accountability Regime (FAR), providing submissions on the Exposure Draft (available here) and the initial Proposal Paper in February 2020 (available here).
The AICD submission on the FAR Bill made the following points:
- Supported passage of the FAR Bill in its current form.
- Welcomed amendments to the accountable person obligations made to the FAR Bill since consultation on the Exposure Draft. The amendments addressed the AICD’s concerns that the FAR would undermine the important strategic and oversight function of the board and result in a burdensome and unrealistic compliance focus by directors in meeting the accountable person obligations.
- Did not support the introduction of civil penalties on accountable persons within the FAR regime. The FAR Bill as currently drafted is already beyond what was contemplated in the recommendations of the Royal Commission, in the AICD’s view. To introduce direct personal liability would be inconsistent with the Royal Commission and unnecessary given the existing extensive enforcement and penalty powers available to APRA and ASIC.
- Recommended the Committee consider whether minor amendments to the far Bill can be made to clarify how the regulators will exercise powers and jointly administer the regime.
- Encouraged the Committee to communicate an expectation to the Government and regulators that comprehensive practical guidance is needed for FAR entities and accountable entities to meet the FAR obligations in a manner consistent with the objectives of the regime.
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