APRA and ASIC FAR Rule Changes 2026: What Australian ADIs and Insurers Must Update in Their Accountability Obligations

ByOfficer

Last updated: June 2026

If your team treats the Financial Accountability Regime as a one-time mapping project that finished at commencement, the 16 June 2026 FAR rule changes from APRA and ASIC are a reason to reopen the file. The regulators are not relaxing who is accountable for what. They are reducing how much paperwork accountable entities keep current to evidence accountability, with the most operationally significant change landing on accountability-map updates for enhanced entities when map information materially changes.

The package covers three categories of FAR reporting obligation and reaches every accountable entity in banking, insurance and superannuation, plus roughly 4,500 accountable persons; superannuation trustees, already inside APRA’s wider superannuation reporting framework, are captured as accountable entities too. None of it is in force yet. APRA and ASIC have said they will consult and aim to implement the changes by the end of 2026, so this is a window to plan a documentation rebuild rather than a deadline to meet today. The four statutory obligations are untouched; only the supporting detail entities lodge is being trimmed.

Related reading: SM&CR Reforms 2026: What the New Rules Mean for Firms

What the FAR rule changes do not change

The Financial Accountability Regime Act 2023 (No. 67, 2023) imposes four obligation sets. Accountability obligations require accountable entities and accountable persons to act with honesty and integrity, with due skill, care and diligence, and to deal with the Regulator in an open, constructive and cooperative way; they also include reasonable-steps duties to prevent adverse prudential outcomes (sections 20 and 21). Key personnel obligations require accountable-person responsibilities to cover the relevant group and prescribed responsibilities, and require the entity to ensure accountable persons are not prohibited from holding the role (section 23). Deferred remuneration obligations require a portion of variable remuneration to be deferred and allow reduction for accountability failures (section 25). Notification obligations require specified events to be notified and, for enhanced entities, accountability statements, accountability maps and material changes to be provided (section 31).

The regime is jointly administered by APRA and ASIC, who act together as “the Regulator” under the Act. It replaced the Banking Executive Accountability Regime that had applied to ADIs since 2018, and like the UK’s senior managers and certification regime it pins responsibilities to named individuals. It commenced in two waves: for ADIs and their authorised non-operating holding companies from 15 March 2024, and for insurers, their licensed NOHCs and registrable superannuation entity licensees from 15 March 2025.

The 16 June 2026 package leaves all four obligations standing. APRA Member Therese McCarthy Hockey framed the intent as keeping the benefits of clarified accountabilities while letting entities get on with running their businesses. For a reporting officer the distinction is the whole point: who answers for what stays, the volume of documentation supporting it shrinks.

The accountability map change: direct reports come out

The most operationally consequential change is to the accountability map, which sets out the accountable persons in an entity and how their responsibilities fit together. The 16 June 2026 APRA and ASIC announcement identifies information on accountable persons’ direct reports in accountability maps as a data item the Regulators propose to remove. The current Act still requires accountability maps for enhanced entities to identify accountable persons, reporting lines, lines of responsibility and the allocation of prescribed responsibilities.

That sounds narrow until you count how often it forces a re-lodgement. Direct reports change far more frequently than accountable persons do. Direct-report information can drive map maintenance even when the accountable person population does not change. APRA and ASIC estimate that removing this detail will at least halve the number of accountability-map updates entities need to make.

Where teams get this wrong is assuming the map itself disappears. It does not. Enhanced entities still submit accountability maps under the current FAR notification framework, while core entities are not required to submit accountability maps to the Regulators. What comes out is the layer of direct-report detail beneath each accountable person, so the accountable-person spine of the map remains relevant for enhanced entities and only the org-chart depth below it is trimmed.

Key functions removed from the regulator rules

The second change removes key functions requirements from the FAR regulator rules. Under those rules, the FAR register has included key-functions information for each accountable person where the relevant key-function requirements apply, covering functions such as financial and regulatory reporting, operational risk management, technology management and other listed functions.

Removing the key functions requirement from the regulator rules does not remove the key personnel obligation in section 23 of the Act, which sits above the rules. The statutory duty to allocate responsibilities to registered accountable persons remains. What the proposal targets is the additional rules-level catalogue of functions to be mapped. Read the consultation carefully when it lands, because the boundary between the surviving statutory obligation and the removed rules detail determines how much of your existing key-functions mapping you can actually retire.

This can be over-read in the other direction too. Removing key-functions information from the regulator rules does not remove the section 23 obligation to ensure accountable-person responsibilities collectively cover the relevant group and prescribed responsibilities. The change is about the rules-level register data item, not a release from responsibility allocation.

A higher materiality threshold for notifications

The third regulator-rules change raises the materiality threshold at which an entity must notify APRA and ASIC of changes to its accountability arrangements. The notification obligation in section 31 of the Act keeps the regulators’ register of accountable persons aligned with the entity’s arrangements as they actually stand.

Today a broad range of changes can trip a notification. Lifting the threshold means smaller or more routine adjustments would no longer require a filing, which leaves a reporting team fewer notification events to detect, prepare and lodge within the statutory timeframe.

The common mistake will be turning off the notification monitoring control rather than recalibrating it. The section 31 obligation does not go away, and a change that is material under the revised threshold still has to be notified on time. Until the final rules set the new level, keep capturing accountability changes as you do now and adjust the filing trigger once the threshold is fixed.

What sits with the Government, not the regulators

Two of the most discussed elements of the announcement are not regulator-rule changes. They are proposed amendments to the FAR legislation under the federal Government’s Better Regulation reforms, flagged in the 2026-27 Budget, so they follow a different track and timetable from the APRA and ASIC rules work.

The first proposal would change how accountability statements and maps are provided by enhanced entities. An accountability statement sets out the specific responsibilities of an individual accountable person. The proposal would have entities provide accountability statements and maps on request, rather than lodging them upfront. The second would give entities more time to register accountable persons, easing the pressure that personnel turnover and restructures put on the registration timeline.

Keep these separate in your planning because of timing risk. The regulator-rules changes are on a path to implementation by end-2026; the legislative proposals depend on a bill the announcement does not date. Do not redesign your accountability-statement production around an on-request model until the amending legislation is in force. The upfront-lodgement requirement is the live obligation for now.

The ASIC AFS licensing change for FAR entities

Alongside the FAR rules, ASIC is streamlining a related obligation for FAR entities that hold an Australian financial services licence. From October 2026, ASIC will reduce the evidence of competence that responsible managers at these AFS licensees have to submit, a change ASIC estimates benefits around 2,000 AFS licensees.

The announced change is limited to evidence submission for responsible managers of FAR entities that hold an AFS licence. ASIC has not said that responsible-manager competence requirements disappear, or that every responsible manager is the same person as a FAR accountable person. ASIC Commissioner Kate O’Rourke framed the change as reducing regulatory burden while maintaining consumer protections, the same simplification theme running through ASIC’s regtech and compliance-simplification work.

This is the one item in the package with a concrete date. Where a FAR entity also holds an AFS licence, October 2026 is the point to revisit responsible-manager onboarding and variation processes so the file reflects ASIC’s reduced evidence-submission requirement, without assuming all competence evidence has been removed.

Frequently Asked Questions

Are the FAR changes in force now?

No. APRA and ASIC announced the proposals on 16 June 2026 and have said they will consult before implementing, aiming to finalise the rule changes by the end of 2026. The accountability-statement and registration-timeline changes need legislative amendment and follow a separate Government track with no stated date. Until each change is finalised, the existing FAR obligations continue to apply.

Do we still have to maintain an accountability map?

Yes, where the map applies to you. The proposal removes the requirement to include direct reports of accountable persons in the map. It does not remove the accountability map itself. Enhanced entities continue to submit a map showing accountable persons and their responsibilities; core entities are not required to submit accountability maps to the Regulators.

Does removing key functions from the regulator rules mean we no longer assign risk and compliance ownership?

No. The key personnel obligation in section 23 of the Financial Accountability Regime Act 2023 still requires responsibilities to be allocated to registered accountable persons. The change targets the prescribed key-functions layer in the regulator rules, not the underlying statutory obligation to have an accountable owner for core functions.

What does the higher materiality threshold mean for our notification process?

It means fewer accountability-arrangement changes will require a notification under section 31. The notification obligation itself remains. Until the final rules set the revised threshold, keep monitoring accountability changes and adjust your filing trigger once the new level is published.

Will we still have to lodge accountability statements upfront?

For now, yes. The move to providing accountability statements and maps on request rather than upfront is a Government legislative proposal, not a regulator-rule change in force. The upfront requirement remains until the amending legislation passes.

Which entities does this affect?

All FAR accountable entities, meaning ADIs and their authorised NOHCs, insurers and their licensed NOHCs, and registrable superannuation entity licensees, together with the roughly 4,500 accountable persons across them. The AFS licensing competence change also reaches around 2,000 AFS licensees that are also FAR entities.

Does the package change deferred remuneration?

No. The announcement targets accountability maps, key functions, notification thresholds, accountability statements and registration timing. The deferred remuneration obligation in section 25 of the Act is not part of this package.

Related Articles

Key Takeaways

  • APRA and ASIC announced FAR administrative-burden changes on 16 June 2026; none are in force yet, with implementation of the rule changes targeted for the end of 2026 after consultation.
  • The four statutory obligations under the Financial Accountability Regime Act 2023 (accountability, key personnel, deferred remuneration, notification) are unchanged.
  • Accountability maps will no longer need to include direct reports of accountable persons, which the regulators estimate will at least halve required map updates. The map itself remains.
  • Key functions requirements are removed from the FAR regulator rules, but the section 23 key personnel obligation to allocate responsibilities to registered accountable persons stays.
  • The materiality threshold for notifying accountability-arrangement changes under section 31 is being raised, reducing filing frequency without removing the notification obligation.
  • Providing accountability statements and maps on request, and longer registration timelines, are Government legislative proposals on a separate track, not yet law.
  • From October 2026, ASIC reduces responsible manager competence evidence for around 2,000 AFS licensees that are also FAR entities; this is the one item with a fixed date.
  • Use the consultation window to plan documentation changes, but keep current FAR obligations running until each change is finalised.

Sources and References

  • APRA, “APRA and ASIC announce FAR changes to reduce administrative burden”, 16 June 2026: apra.gov.au
  • APRA, “Financial Accountability Regime” overview (commencement dates, joint administration, BEAR replacement): apra.gov.au/financial-accountability-regime
  • ASIC, “Financial Accountability Regime”: asic.gov.au
  • Financial Accountability Regime Act 2023 (No. 67, 2023), Federal Register of Legislation (obligations sections 20, 21, 23, 25, 31; register section 40; rule-making sections 104 and 105): legislation.gov.au

Where to start when the consultation opens

Treat the period between now and end-2026 as a redesign window, not a stand-down. The highest-value preparation is to model your accountability map without the direct-report layer and confirm how much of your update workflow that removes. After that, separate the regulator-rules changes you can plan against from the legislative proposals you cannot yet rely on, and keep accountability statements, notifications and registrations running to the existing requirements until each change is confirmed.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

Similar Posts