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
IMF Issues Report on the 2018 Article IV Consultation with SingaporeRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.