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Government consults on BEAR regime

Government consults on BEAR regime

The federal government has released further information on how the Banking Executive Accountability Regime will be implemented.

Legislated by the Turnbull government in February, BEAR imposes higher standards of behaviour on banks and their senior executives and directors.

Treasurer Scott Morrison has now announced the release of a new legislative instrument within the Banking Executive Accountability Regime bill, which will be used to determine compliance obligations and the size of penalties imposed on non-compliant banks. 

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The government is also seeking feedback on how to define small, medium and large authorised deposit-taking institutions (ADIs).

According to Mr Morrison, the new 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
  • 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 BEAR bill, which passed in February, was designed to increase standards of behaviour on banks and their senior executives by introducing compliance obligations, enforced by the Australian Prudential Regulation Authority (APRA), that “will apply differently based on the ADI’s size”.

The bill will commence for large ADIs in July 2018 and for small and medium-sized ADIs in July 2019.

Further, the deferral of variable remuneration obligations for bank executives, and the nature of civil penalties imposed on lenders that breach obligations, will also vary depending on the size of the ADI.

Consultation submissions close on 20 April 2018.

[Related: APRA empowered as BEAR bill swiftly becomes law]

 

Government consults on BEAR regime
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