Revised Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)
General outline and financial impact
Banking Executive Accountability Regime
This Bill amends the Banking Act to establish the BEAR. The BEAR puts in place a strengthened responsibility and accountability framework for the most senior and influential directors and executives of ADIs and their subsidiaries.
To support the BEAR, the Bill gives APRA new and strengthened powers.
Date of effect: 1 July 2018
Proposal announced: The Government announced the BEAR in the 2017-18 Budget as part of the A More Accountable and Competitive Banking System package of reforms.
Financial impact: The 2017-18 Budget included additional funding for APRA of $4.2 million over four years from 2017-18 to implement the BEAR. A further $1 million per year will be provided to APRA to enforce breaches.
The cost of the additional funding to APRA is offset by an increase in the APRA Financial Institutions Supervisory Levies of $8.2 million over four years from 2017-18.
The Budget also included $1.1 million in additional funding to Treasury to oversee the implementation of A More Accountable and Competitive Banking System, of which the BEAR is a part.
Human rights implications: This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3.
Compliance cost impact: The total change in average annual regulatory cost (from business as usual) is $11.5 million.
These costs are expected to arise primarily as upfront costs to understand the new requirements, update systems, policies and procedures, and train staff, with a small ongoing cost owing to the requirements to provide documentation to APRA on a regular basis. See Regulation Impact Statement - Chapter 2.