6 April 2018

Consultation on Banking Executive Accountability Regime


The Turnbull Government is progressing action to hold banks and senior executives to account, today releasing more information on how legislation will be implemented.

The Banking Executive Accountability Regime (BEAR), legislated by the Turnbull Government in February, imposes higher standards of behaviour on banks and their senior executives and directors.

Where these obligations are not met, APRA will be empowered to issue substantial fines or disqualify the individuals responsible. It is part of a broader suite of financial services reforms delivering on our commitment to put consumers first.

For large authorised deposit-taking institutions (ADIs), the BEAR will commence on 1 July 2018. This is important to ensure that accountability gaps in the sector are addressed as soon as possible. 

For small and medium ADIs, the regime will commence on 1 July 2019, allowing them more time to comply. Small and medium ADIs do not have the same operational resources as large ADIs, so it is appropriate to provide these entities more time to adapt to the new regime.

Other elements that will apply differently, depending on ADI’s size, include the deferral of variable remuneration and the maximum civil penalties.

Today, the Government will begin seeking feedback on how to define small, medium and large ADIs.

This consultation seeks stakeholder views on the draft legislative instrument. As indicated in the explanatory memorandum to the BEAR legislation, the draft legislative instrument provides that:

  • a small ADI would have less than or equal to $10 billion on a three year average of total resident assets;
  • a medium ADI would have between $10 billion and $100 billion on a three year average of total resident assets; and
  • a large ADI would be any ADI with greater than or equal to $100 billion on a three year average of total resident assets.

The draft legislative instrument is available on the Treasury website. Submissions are due by 20 April 2018 and can be sent to bear@treasury.gov.au. The Government encourages all interested parties to make a submission.