The Financial Accountability Regime (FAR), a key outcome of the Hayne royal commission, is being pushed back. 

A delay reportedly stems from Financial Services Minister Stephen Jones's failure to finalise the operating guidelines, despite having over five months to do so since the FAR was passed by parliament on September 5.

The FAR, which was designed to tighten the reins on bank executives' conduct, has its commencement for banks pushed back from the originally scheduled date of March 15. 

This delay is attributed to the absence of ministerial rules that define critical aspects of the regime, such as the identification of “accountable persons”, an “enhanced notification” system, and “prescribed responsibilities”. 

Banking institutions have been awaiting these final rules since last October, anticipating a five-month preparation period. 

The enforcement extension is also expected to affect the superannuation and insurance sectors, with their inclusion now moved to March next year.

This procedural lag has not only hindered banks from preparing adequately but has also stalled regulators, the Australian Securities and Investments Commission (ASIC), and the Australian Prudential Regulation Authority (APRA), from finalising a distinct set of guidelines essential for banks' implementation of the FAR.

Despite the hold-up, a spokesperson for Minister Jones claims that the government and regulators are diligently processing the feedback from the 2022 submissions, with a commitment to finalising both sets of rules before the new enforcement date.

The FAR is an expansion of the Banking Executive Accountability Regime introduced in July 2018, aiming to enhance governance within the financial sector by mandating accountable persons to ensure compliance with licensing requirements. 

The delay in finalising these rules has also sparked apprehensions regarding the uniformity in interpretations of key duties by ASIC and APRA, potentially leading to regulatory discrepancies.

The FAR prescribes fines up to $1.565 million for individual executives and significant penalties for financial institutions, reflecting the gravity of compliance expectations.