Financial Accountability Regime (FAR) - Embedding Individual Accountability in Financial Services
The Financial Accountability Regime fundamentally reshapes how accountability is assigned, evidenced and enforced across financial services organisations.
What is the Financial Accountability Regime (FAR)?
The Financial Accountability Regime (FAR) replaces the Banking Executive Accountability Regime (BEAR) and significantly expands accountability obligations across the financial services sector.
FAR strengthens individual and collective accountability by requiring regulated entities and senior executives to clearly demonstrate responsibility for business outcomes, risk management and regulatory compliance.
From 2025–2026, FAR expectations are increasingly shaping how ASIC and APRA assess governance failures, even outside formal enforcement.
Why FAR is a critical 2026 topic
FAR is no longer just a “registration” exercise. Regulators now expect firms to operationalise accountability, not simply document it.
For stockbrokers, advisers and financial services firms, FAR matters because:
Enforcement focus is shifting from entity-level failures to individual responsibility
Accountability intersects with breach reporting, complaints, DDO, AML/CTF and CPS 230
Poor role clarity or weak evidence trails increase personal exposure for executives
FAR is increasingly referenced during ASIC reviews and remediation discussions
In short: if accountability cannot be proven, it will be questioned.
Core FAR obligations firms must embed
1. Clear accountability mapping
Firms must define and maintain:
Accountability statements that clearly describe each accountable person’s responsibilities
Accountability maps showing how responsibilities sit across the organisation
Alignment between accountability, delegation, reporting lines and decision-making authority
Vague or overlapping accountability remains one of the most common FAR weaknesses.
2. Reasonable steps obligation
Accountable persons must take reasonable steps to:
Prevent matters that could adversely affect the entity’s prudential standing or compliance
Ensure appropriate controls, systems and governance are in place
Act promptly when issues are identified
“Reasonable steps” must be evidenced, not assumed.
3. Deferred remuneration and consequences
FAR introduces stronger consequences for accountability failures, including:
Deferred remuneration obligations
Malus and clawback expectations
Heightened scrutiny of remuneration frameworks following control failures
This ties FAR directly into HR, remuneration committees and board oversight.
Where firms are still exposed
Across financial services, recurring FAR weaknesses include:
Accountability statements that don’t reflect how decisions are actually made
FAR documentation not aligned with breach, complaints or incident ownership
Poor linkage between accountable persons and remediation actions
Limited evidence that accountable persons actively oversee risks
FAR treated as a legal artefact rather than an operating model
These gaps become visible during ASIC reviews, post-incident scrutiny and remediation programmes.
FAR and its regulatory intersections
FAR does not operate in isolation. Regulators increasingly expect it to connect to:
RG 78 breach reporting - clear ownership of incidents and investigations
RG 271 complaints handling - accountability for systemic issues
DDO - product governance accountability
AML/CTF - financial crime ownership and escalation
CPS 230 - accountability for critical operations and resilience
Misalignment between FAR and these regimes is now a red flag.
How OCG helps firms operationalise FAR
OCG works with boards, executives and compliance teams to turn FAR into a defensible, lived framework.
1. Accountability framework uplift
Review and rewrite accountability statements to reflect reality
Align FAR maps with governance forums, delegations and decision rights
Reduce overlap and ambiguity
2. Evidence and reasonable-steps design
Define what “reasonable steps” look like in practice
Build evidence packs linked to controls, reporting and oversight activities
Support accountable persons with practical tools, not legal abstractions
3. Integration with core regulatory obligations
Map FAR ownership across breaches, complaints, AML/CTF and resilience
Embed accountability into remediation programmes
Align FAR with remuneration and performance frameworks
4. Board and executive assurance
FAR health checks and gap assessments
Board-level reporting on accountability effectiveness
Independent assurance to support regulator engagement
FAQs
Does FAR apply beyond banks?
Yes. FAR significantly expands accountability expectations across financial services, and its principles are increasingly applied by regulators even where formal registration thresholds differ.
Is FAR mainly about documentation?
No. Regulators expect FAR to operate in practice, through oversight, escalation, challenge and evidence of action.
What happens if accountability is unclear?
Unclear accountability increases regulatory risk, delays remediation, and heightens exposure for senior executives during enforcement or review activity.
Strengthen Accountability Under FAR
Work with OCG’s Accountability & Governance Specialists
FAR raises the bar on individual accountability. OCG helps financial services firms design clear accountability frameworks, evidence reasonable steps and integrate FAR into everyday governance, so accountability stands up when regulators come calling.
