Implementing BEAR

The Australian Prudential Regulation Authority (APRA) has released an information paper to assist authorised deposit-taking institutions (ADIs) to meet their obligations under the Banking Executive Accountability Regime (BEAR).

BEAR came into force for banks with over $100 billion in assets from 1 July 2018. It will apply to all other ADIs from 1 July 2019. Background.

The information paper clarifies APRA’s expectation of how an ADI can effectively implement the accountability regime on matters including:

• identifying and registering accountable persons;
• creating and submitting an accountability statement for each accountable person, and an accountability map for the ADI;
• establishing a remuneration policy requiring that a portion of accountable persons’ variable remuneration be deferred for a minimum of four years, and reduced commensurate with any failure to meet their obligations; and
• notifying APRA of any accountability-related changes or breaches of accountability obligations.

APRA says it expects an ADI to integrate the accountability regime with its internal governance frameworks to support strong and clear accountability. This includes ensuring that accountabilities are well defined and tested, that accountable persons understand and are able to deliver on their accountabilities and that there is a robust framework for identifying any breaches.

APRA says it will address enforcement-related issues, including the disqualification of accountable persons and civil penalties under the BEAR, in a subsequent paper.

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