Bank executive regime could extend to licensees, insurers
Financial planning licensees, insurance and superannuation fund executives could find themselves bound up in the Government’s new Bank Executive Accountability Regime (BEAR) if they are part of a vertically-integrated bank structure.
The Minister for Revenue and Financial Services, Kelly O’Dwyer has released the Government’s discussion paper around the new BEAR regime which makes clear that not only banks but their insurance, superannuation and other subsidiaries could be covered.
The Government’s discussion paper directly asks market participants whether the definition of accountable persons should “apply to individuals in the subsidiaries of a group or subgroup with an ADI [authorised deposit-taking institution] parent, including where the subsidiaries are not regulated by APRA [Australian Prudential Regulation Authority]”.
Dealing with the question of who will be deemed “accountable persons”, the Government’s discussion paper states that the definition of an accountable person “could also include directors and senior executives of the subsidiaries within a group or subgroup with an ADI [bank] parent.
Dealing with the breadth of the BEAR, the discussion paper said: “The net should not be cast so wide that responsibility can be deflected and accountability avoided. The risk is that if everybody is responsible, nobody will be accountable. On the other hand, the definition of accountable persons should not be cast too narrowly so as to exclude individuals with effective responsibility for management and control”.
“The extent to which ADIs would register accountable persons under this element of the definition would vary depending on differences in business models and group structures” the discussion said. “An example of a function that could be assumed to meet this criteria would include the head of a key business area,” it said. “This function would be responsible for the management of a significant proportion of the ADI business or activity, based on its proportion of total gross assets, revenue or profit.”
“This function could include directors or senior executives of subsidiaries within a group or subgroup with an ADI parent,” the discussion paper said.
Recommended for you
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
