FAR 2025: Why it Pays to Have a Comprehensive Individual Accountability Regime Solution
All around the world, regulators are increasingly reforming and introducing new individual accountability regimes to help strengthen market integrity and ensure financial services employees are fit and proper to carry out their roles. However, firms can often find it challenging to meet the requirements laid out in legislation without the right tools to track and keep an accurate accountability trail for both internal and external purposes.
While market solutions exist to help strengthen the individual accountability of employees and effectively demonstrate a firm’s compliance to regulators, it’s vital that they are tailored to the specifics of each regime to be fit for purpose. If not, it becomes difficult to ascertain whether you have taken the necessary steps to meet your obligations. This is especially true when regulators introduce a new regime – such as the Financial Accountability Regime (FAR) Bill of Australia, which was passed in September 2023. As of March 2025, FAR’s reach has extended to the insurance and superannuation sectors, following its initial implementation in the banking industry in March 2024, where it replaced the Banking Executive Accountability Regime (BEAR).
The introduction of FAR means that entities in the banking, insurance, and superannuation industries have been challenged with adjusting their BEAR-era responsibility and accountability frameworks. For firms looking to tackle this with the help of third-party providers, a key consideration is to look at each vendor’s track record across other global individual accountability regimes.
What Is the Financial Accountability Regime, and Why Was It Introduced?
FAR was designed in response to growing concerns about misconduct in Australia’s financial industry, particularly in the wake of the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry. The Commission’s findings highlighted systemic failings in risk management, corporate culture, and regulatory oversight, prompting calls for stricter accountability measures.
By introducing FAR, the Australian government sought to build a stronger framework to:
- Improve transparency in financial institutions’ decision-making
- Strengthen governance structures to prevent unethical behavior
- Ensure senior executives take reasonable steps to fulfill their responsibilities
- Enhance regulatory enforcement through stricter compliance obligations and penalties for non-compliance
FAR builds upon and replaces the Banking Executive Accountability Regime (BEAR), which was introduced in 2018 and applied solely to banks. BEAR sought to establish personal accountability for banking executives by requiring firms to register their senior managers, define their responsibilities clearly, and enforce stricter consequences for regulatory breaches. However, its limited scope left gaps in oversight across other financial services sectors.
With FAR, these accountability measures now extend beyond banking to include insurance and superannuation providers. The new regime also expands the definition of accountable persons and increases reporting obligations, ensuring a consistent and enforceable approach to individual accountability across the financial industry.
By broadening the scope of individual accountability, FAR aligns Australia’s financial regulatory framework more closely with similar regimes in the UK, Singapore, and Ireland, reinforcing global standards for responsible leadership in financial services.
How Firms in Australia Are Transitioning To The Financial Accountability Regime
Guidance Materials for Accountable Entities
To support financial institutions in meeting their obligations under FAR, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have provided extensive guidance materials. These resources are designed to help accountable entities and their senior executives understand the requirements of FAR and comply with reporting obligations.
Key Guidance Documents
- Joint Administration Agreement between ASIC and APRA: This document outlines the principles governing the joint administration of FAR by APRA and ASIC. It clarifies the roles and responsibilities of both regulators and provides a framework for cooperation in overseeing compliance.
- Financial Accountability Regime: Information for accountable entities: This information paper serves as a key resource for accountable entities, offering guidance on FAR obligations, the joint administration approach of ASIC and APRA, and the regulatory powers available to enforce compliance.
APRA Guidance Materials
- Accountability statement guidance and template: Provides guidance for drafting accountability statements that clearly define the responsibilities of accountable persons within financial institutions.
- APRA Connect reporting forms – instruction guides: Step-by-step instructions for completing and submitting FAR-related reporting requirements via APRA Connect (APRA’s reporting platform).
Further Information and Related Resources
- FAR implementation for insurance and superannuation entities: Outlines the specific requirements and timelines for insurance and superannuation entities preparing for the March 2025 implementation.
- FAR presentations by ASIC and APRA: A collection of presentations covering key aspects of FAR compliance, insights from regulatory reviews, and expectations for accountable entities.
- FAR consultations by ASIC and APRA: Details on past and ongoing consultations that provide firms the opportunity to engage with regulators and seek clarifications on FAR requirements.
- FAR news and announcements: Regular updates from APRA and ASIC regarding changes, deadlines, and enforcement actions related to FAR.
- FAR legislation and rules: Links to the full legislative text and regulatory rules governing FAR compliance.
Regulatory Communications and Notices
- ASIC’s Collection Notice – FAR: Explains how ASIC collects, uses, and handles personal information in relation to FAR compliance and enforcement.
- Joint letters to accountable entities:
The Guiding Light For Individual Accountability Compliance
StarCompliance was the first vendor to provide a suite of compliance software solutions that support and simplify compliance with the UK FCA’s Senior Managers and Certification Regime (SMCR) in 2016 through its Individual Accountability Regime (IAR) solution. Since then, we have gone on to deliver nearly twenty iterations of our product, each containing many enhancements – for each, listening to client feedback to help them become future-ready and more effectively navigate any changes in regulatory demands.
The capabilities of our IAR product were expanded further in 2021 to meet the Monetary Authority of Singapore’s (MAS) Individual Accountability and Conduct (IAC) Guidelines. And most recently, the flexibility of the STAR platform has enabled us to deliver another dedicated solution for Ireland’s Individual Accountability Framework (IAF), which includes the Senior Executive Accountability Regime (SEAR).
When it comes to FAR, we’ve already built all of the capabilities to help firms establish and maintain a framework to comply with confidence, including:
- Registrations
- Accountability Maps
- Accountability Statements
- Reasonable Steps
- Delegation of Responsibilities
- Breaches and Breach Reporting
- Fit and Proper Assessments
The depth and breadth of our offering is second to none, and has been combined with outstanding knowledge from our subject matter experts (SMEs), who are dedicated to helping firms understand their obligations with global accountability regimes. Over the years, we’ve also poured significant investment into our IAR solutions, and we have a fully-packed roadmap of continual improvements and enhancements to offer even more innovation and efficiencies to our clients and the market.
With Star’s accountability and competency solutions, firms are not only able to streamline complete and confident compliance with global individual accountability regimes, but drive enterprise-wide professionalism to help foster a culture of compliance that protects and builds the firm’s reputation.
Contact us to schedule a demo and see how the STAR platform can help you meet regulations in Australia and beyond.
FAR Scope and Requirements Checklist
