Avoiding FAR duplication with ASIC and APRA

The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) will have defined roles with responsibilities, supported by processes and procedures, under the Financial Accountability Regime (FAR).

APRA’s executive director, Sean Carmody, answering the question from Senate Economics Legislation Committee chair, Senator Paul Scarr, regarding the division of responsibilities between the two institutions, told the committee that the responsibilities of regulators would not be duplicated under the new Financial Accountability Regime (FAR).

“We are very conscious that there is certain information industry has to provide as part of being compliant with FAR and clearly we don’t want to have a regime [that] is going to have a duplicate reporting to multiple agencies,” he said.

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“We are making it very clear that there is a single portal for provisioning this information which is going to be a recently-implemented system called APRA Connect which was implemented last year  for a collection of a wide range of data, not just the FAR.

“We’ve got processes behind that system that automatically have that information disseminated through to ASIC as well and are both receiving the same information of the essentially at the same time.”

At the same time, he said that both regulators would need to have proper communications and co-ordination, in particular around the overlapping areas.

“Prudential matters would still sit with APRA and conduct-related matters would still sit with ASIC but there would always be matters that would blur between the two,”

Answering the question on a duplication of overlapping obligations, ASIC’s senior executive leader, strategy group, Greg Kirk, said there were two types of breaches which included a breach of a requirement to have internal accountability arrangements and the underlying conduct rules.

However, he stressed, the regimes would be looking at different things.

“So, the existing conduct laws administered already around the conduct involved whereas the FAR regime is to have clarity about the accountability and the background for full conduct so people know who is responsible.

“They have measures in place including the renumeration to manage it within the organisation.

“And again it does not necessarily mean that there has been a breach of FAR but it means they will be quick to identify who in the organisation is responsible for that activity and who we need to speak to about it.”

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