April 01, 2019

APRA launched a proposal to allow a structure-neutral application of the deferred remuneration obligations under the Banking Executive Accountability Regime (BEAR). The consultation is for a draft schedule of the kinds of remuneration that are not variable remuneration, to be made by legislative instrument. Submissions are requested by April 30, 2019. APRA will release the final legislative instrument before July 01, 2019, which is the commencement date of the BEAR for medium and small authorized deposit-taking institutions.

APRA proposes that, irrespective of the organizational structure or whether the authorized deposit-taking institution is a locally incorporated authorized deposit-taking institution or foreign authorized deposit-taking institution, where an individual has both an accountable person role with an authorized deposit-taking institution (or subsidiary of an authorized deposit-taking institution) and another role, only the portion of an individual’s variable remuneration that relates to the accountable person role would be subject to the deferral requirements under Division 4 of Part IIAA of the Banking Act. APRA expects that this proposed legislative instrument will not result in any large authorized deposit-taking institution (that is, a major bank) initiating changes to the amount of deferred remuneration, as the legislative instrument does not apply to their particular corporate structure. The proposed legislative instrument is intended to ensure that application of the deferred remuneration obligations across authorized deposit-taking institutions is consistent with the intent of BEAR. 

 

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Comment Due Date: April 30, 2019

Keywords: Asia Pacific, Australia, Banking, BEAR, Governance, Deferred Remuneration Obligations, Operational Risk, APRA

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