Navigating BEAR and the icy terrain of a post-Royal Commission landscape

07 May 2019

Tim Aman , Global Leader, Fintech
National Leader, Financial Services

The Banking Executive Accountability Regime (BEAR), which creates increased standards of accountability, came into force for the largest banks from 1 July last year and will apply to all other Authorised Deposit-taking Institutions (ADI) from 1 July 2019.

The regime was established under legislation and is administered and enforced by the Australian Prudential Regulation Authority (APRA).

Those who see BEAR as just another compliance exercise, do so at their own risk. 

In the wake of the Royal Commission and recent APRA and Australian Securities and Investments Commission (ASIC) enforcement activity, BEAR presents a scary prospect for accountable persons, including Boards and senior leaders.

Personal accountability and responsibility demand a heightened focus and diligent attention on processes, controls and reporting across the business.

Banks and Mutuals must now meet certain obligations under the regime including:

  • Identifying and registering accountable persons
  • Creating and submitting an accountability statement for each accountable person, and an accountability map for the ADI
  • Establishing a remuneration policy requiring that a portion of accountable persons’ variable remuneration be deferred for a minimum of four years, and reduced commensurate with any failure to meet their obligations
  • Notifying APRA of any accountability-related changes or breaches of accountability obligations. 

BEAR presents an opportunity to:

  • Enhance governance and risk management
  • Strengthen accountability among directors and senior executives.

For more information, visit Financial Services Sector Inquiries, or for a tailored discussion, please contact Tim Aman or a member of your local financial services team.