Two weeks ago, the Australian government introduced the Financial Accountability Regime Bill 2022, frequently referred to as the FAR. The bill gives power to the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) to investigate and punish misconduct, and to hold specific individuals accountable for such.
Like many accountability regimes put in place in other markets in recent years, Australia's FAR requires that firms nominate executives as "accountable persons" for particular business areas and corporate functions. Under the new Australian regime, at least 40% of an accountable person's variable remuneration must be deferred for at least four years, with risk of reductions thereto should misconduct occur on their watch. Firms and accountable persons are also required to act upon and report any instances of non-compliance.
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