APRA Finalizes Schedule on Scope of Variable Remuneration Under BEAR
APRA has released a response letter and the final wording of the schedule in relation to how the Banking Executive Accountability Regime (BEAR) applies to variable remuneration arrangements for medium and small authorized deposit-taking institutions (ADIs). The purpose of the proposal was to ensure that application of the deferred remuneration obligations across ADIs is consistent with the intent of the BEAR. The schedule will become effective from July 01, 2019.
APRA had launched, in April 2019, a consultation on the schedule of the kinds of remuneration that are not variable remuneration. APRA had proposed that, irrespective of the organizational structure or whether the ADI is a locally incorporated ADI or foreign ADI, where an individual has both an accountable person role with an ADI (or subsidiary of an ADI) and another role, only the portion of the 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 1959. APRA had received seven submissions in response to the consultation. One submission noted that the proposed application of paragraph 2(b) of the schedule was overly restrictive in that it would only apply to an accountable person holding a position in an Australian-incorporated non-ADI subsidiary of the foreign ADI.
After considering feedback received on the consultation on remuneration arrangements under BEAR, APRA acknowledged that where an accountable person of a foreign ADI holds a position in a non-ADI-related body corporate, which does not relate to his/her accountable person role, the portion of this individual’s variable remuneration that does not relate to his/her accountable person role should be excluded from the definition of variable remuneration for the purposes of the BEAR. APRA has amended the wording of paragraph 2(b) of the schedule accordingly. The final legislative instrument will be published before BEAR comes into force for medium and small ADIs on July 01, 2019.
Related Links
Effective Date: July 01, 2019
Keywords: Asia Pacific, Australia, Banking, BEAR, Variable Remuneration, Operational Risk, Conduct Risk, APRA
Previous Article
SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billionRelated Articles
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
EC Rule on Contractual Recognition of Write Down and Conversion Powers
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
ECB to Consider Climate Risks When Reviewing Collateral Framework
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
SRB Provides Update on Approach to Prior Permissions Regime
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
APRA Issues Further Guidance on Application of Securitization Standard
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
ACPR Publishes Corrective Version of RUBA Taxonomy
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
