This bill became law on Sep 14th, 2023.
Budget, tax & economy
The law expands tougher accountability rules beyond banks to also cover insurers and superannuation entities across Australia’s prudentially regulated financial industry.
Misconduct exposed by the Financial Services Royal CommissionThe inquiry that exposed misconduct in banking, insurance and superannuation and led to this reform package. left Australia with strong accountability rules for banks but not insurers and super funds. This bill expands that regime across prudentially regulated finance and lets APRAThe regulator that oversees banks, insurers and super funds for safety and soundness, and helps enforce this regime. and ASICThe corporate and financial services regulator that helps enforce this regime alongside APRA. enforce clearer duties, deferred pay and penalties for senior leaders.
Australia already had the Banking Executive Accountability RegimeThe older bank-only accountability system that this bill replaces and extends to other parts of finance. for banks, but misconduct exposed by the banking royal commission showed the push for stronger accountability also needed to reach insurers and superannuation entities. The Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. Bill 2023 responded by replacing and extending that bank-only model across prudentially regulated finance with clearer duties, deferred pay and stronger enforcement, and after Parliament passed it the new regime became law through Royal AssentThe formal approval that turns a passed bill into an Act of Parliament. in September 2023.
The main criticism was that the regime did not go farThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. enough because it dropped direct million-dollar civil fines for senior executives, risking an accountability system with weak personal consequences. That case was raised most clearly by the Greens and echoed by consumer advocates, while the Coalition said it would not oppose the bill despite broader complaints about delay and handling.
Stephen Jones MP introduced this bill. It passed on the voices.
Did it become law?
Yes
Became law 14 Sept 2023
Final passage
Passed without a counted vote
2 recorded amendment or procedural votes were found, but no counted vote on the bill itself was recorded.
Passage speed
190 days
From introduction to the latest recorded parliamentary step
Meaning
The law expands tougher accountability rules beyond banks to also cover insurers and superannuation entities across Australia’s prudentially regulated financial industry.
Directors and other top decision-makers at banks, insurers and super funds must meet stronger accountability duties under the new regime.
Banks, insurers and super funds must deal honestly and carefully, cooperate with the Australian Prudential Regulation AuthorityThe regulator that oversees banks, insurers and super funds for safety and soundness, and helps enforce this regime. and the Australian Securities and Investments CommissionThe corporate and financial services regulator that helps enforce this regime alongside APRA., and avoid conduct that harms their financial soundness or breaks key laws.
Banks, insurers and super funds must clearly assign senior responsibilities and hold back at least 40 per cent of performance pay for key executives for at least four years, with cuts for breaches.
The Australian Prudential Regulation AuthorityThe regulator that oversees banks, insurers and super funds for safety and soundness, and helps enforce this regime. and the Australian Securities and Investments CommissionThe corporate and financial services regulator that helps enforce this regime alongside APRA. can investigate suspected breaches, ban senior executives from these roles, order fixes, and seek civil penalties against financial entities in court.
In essence, the FAR extends the existing responsibility and accountability framework to the insurance and superannuation sectors, to ensure that heightened accountability obligations are in place across the wider financial industry.Minister's second reading speech
The FAR imposes heightened accountability obligations for prudentially regulated financial institutions, meaning banks, insurers, and superannuation entities. These institutions are referred to as accountable entities in the regime. The FAR regulates directors and the most senior and influential executives of accountable entities. These individuals are referred to under the regime as accountable persons.Minister's second reading speech
The FAR imposes four core sets of obligations. Firstly, accountable entities and accountable persons must conduct their business in a proper manner, which includes: acting with honesty and integrity, and with due skill, care and diligence; dealing with Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) in an open, constructive and cooperative way; preventing adverse impact on the accountable entities' prudential standing and preventing breaches of certain specified financial services laws by their accountable entity.Minister's second reading speech
Further, accountable entities must ensure clear identification of accountabilities for accountable persons in the organisation across key areas of operations and defer at least 40 per cent of the variable remuneration of accountable persons for a minimum period of four years. Variable remuneration will be reduced where accountability obligations are breached. Ensuring that there are financial consequences for accountable persons who do not meet their obligations will increase their focus on the long-term outcomes of their decisions.Minister's second reading speech
They will have the power to disqualify accountable persons, investigate suspected breaches of the regime, and direct entities to take remedial action and to apply to the Federal Court to impose a civil penalty on accountable entities.Minister's second reading speech
Context
Australia already had the Banking Executive Accountability RegimeThe older bank-only accountability system that this bill replaces and extends to other parts of finance. for banks, but misconduct exposed by the banking royal commission showed the push for stronger accountability also needed to reach insurers and superannuation entities. The Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. Bill 2023 responded by replacing and extending that bank-only model across prudentially regulated finance with clearer duties, deferred pay and stronger enforcement, and after Parliament passed it the new regime became law through Royal AssentThe formal approval that turns a passed bill into an Act of Parliament. in September 2023.
Banking royal commission recommendations call for wider accountability
Speakers said the bill followed recommendations from the banking royal commission after misconduct exposed serious failings in parts of the financial sector.
Hansard ↗Government introduces the Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. bill
The bill was introduced to replace and extend the existing Banking Executive Accountability RegimeThe older bank-only accountability system that this bill replaces and extends to other parts of finance. beyond banks to insurance and superannuation.
Hansard ↗Parliament passes the bill
Both houses passed the bill in the same form, completing Parliament's approval of the expanded accountability regime.
Parliamentary timeline ↗Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. becomes law
Royal AssentThe formal approval that turns a passed bill into an Act of Parliament. turned the bill into an Act, allowing the broader accountability regime for banks, insurers and super funds to take legal effect.
Parliamentary timeline ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
Second reading debate
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber considered the bill in detail and dealt with amendments before the next stage.
Consideration in detail debate
The bill reached this recorded parliamentary step.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe formal approval that turns a passed bill into an Act of Parliament., turning the bill into an Act.
Key criticism
The main criticism was that the regime did not go farThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. enough because it dropped direct million-dollar civil fines for senior executives, risking an accountability system with weak personal consequences. That case was raised most clearly by the Greens and echoed by consumer advocates, while the Coalition said it would not oppose the bill despite broader complaints about delay and handling.
Criticism was real but concentrated on enforcement strength rather than the bill’s overall goal.
No strong personal penalties for executives
Critics said the bill was "accountability in name only" because senior bankers and other executives could breach their obligations without facing strong direct civil fines, which they argued would blunt deterrence.
Risk of repeating BEAR’s weak enforcement record
Consumer advocates warned that without stronger penalties the new regime could repeat the earlier BEARThe older bank-only accountability system that this bill replaces and extends to other parts of finance. model, which they said had failed to hold any bank executives to account in practice.
Concerns the bill was watered down after lobbying
Opponents argued the removal of million-dollar fines showed the government had backed away from tougher accountability under pressure from the banking industry.
Further sources
Votes
The bill passed both chambers on the voices. The counted divisions below were about amendments or procedure, not final passage.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.
House
Passed 58 to 9. Support came from Labor, Liberal Party, and Katter's Australian Party. Opposition came from Greens. Minor-party and independent votes were split.
The vote rejected the amendments and let the Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. Bill continue unchanged at that stage.
Senate
Defeated 17 to 31. Support came from Greens, Jacqui Lambie Network, One Nation, UAP, and minor parties and independents. Opposition came from Labor and Nationals. Liberal Party had split recorded votes.
These amendments would have expanded enforcement against accountable persons by adding civil penalties; the committee rejected them, so the bill kept the government's framework without that change.
These are amendment votes, not the final passage vote on the bill itself. The bill passed both chambers on the voices.
Parliamentary debate
Start here — lead voices
Jones supports the bill, saying it implements the banking royal commission’s accountability reforms and extends stronger obligations across banks, insurers and superannuation.
Read in Hansard ↗McKim opposes the bill because he says it has no real teeth without million-dollar fines for bank executives who breach their accountability obligations.
Read in Hansard ↗Stuart Robert says the opposition will not block the bill and will support it passing, because it implements long-awaited royal commission reforms that the coalition backs.
Read in Hansard ↗Ayres supports the Financial Accountability RegimeThe new set of accountability rules in this page that applies to banks, insurers and superannuation firms. Bill 2023 and says it will extend executive accountability rules across banking, insurance and superannuation to implement Banking Royal Commission recommendations and lift standards across the sector.
Read in Hansard ↗All speeches by bloc
4 speakers · 4 support
“The Financial Accountability Regime Bill 2023 establishes the Financial Accountability Regime, or FAR, which replaces and extends the Banking Executive Accountability Regime, following a number of recommendations from the Banking Royal Commission.”Read the full speech in Hansard ↗
“For the CSLR to be operational and compensating consumers from December, these bills should be passed this month. With their passing, the Albanese government will finalise the federal government's response to the Hayne royal commission. Australians deserves a financial sector that is ethical, and the Australian government will ensure that it is. The Australian people and our financial sector will be much better off for it.”Read the full speech in Hansard ↗
“The bill underscores the government's commitment to finalise the action necessary to fully address the banking royal commission and implement measures that compel the financial services industry to act in the public's interest.”Read the full speech in Hansard ↗
“The government's bill already contains effective measures to address executive failures to comply, including disqualification, loss of deferred bonuses and individual civil penalties for assisting in an entity's contravention of its obligations. These sanctions are on top of penalties for misconduct already in place in other financial services laws. These measures are finely balanced to improve executive conduct in the financial services sector without adversely impacting the sector's efficiency. Adding individual civil penalties is not likely to substantially increase the level of deterrence that already exists, while it may impact on firms seeking to attract and retain the best executive talent. I commend these bills to the Senate.”Read the full speech in Hansard ↗
5 speakers · 5 support
“We will not deny this bill a second reading. We call on the House, clearly, to recognise the mismanagement of this bill, the government's dishonesty with the Australian people and the need for the government to commit to reducing pressure on inflation not only by controlling its own spending and by not taxing Australians more but by getting on with legislating the Levy review so Australians can have cheaper access to financial services. I support the amendment moved by the member for Hume and commend the bill to the House.”Read the full speech in Hansard ↗
“When I was the chair of the corporations and financial services committee I had some pretty grave reservations about the introduction of a compensation scheme of last resort, and quite frankly I still do. We need to be very careful that government doesn't just keep stepping in on all occasions saving people from themselves. Some people will make poor decisions. Some people will make poor decisions based on poor advice. What we need to be careful of in this country is that we don't try and de-risk everything, because ultimately if we try and de-risk everything we demotivate the concept of investment. Everybody would invest if there was no risk, but the likely rewards from those investments, in my view, are likely to be diminished as a result. And of course, we also have the costs of paying for the levies. Let's not be naive about this, the levies that will be paid by the relevant institutions—ultimately it's the punters that're going to pay for these things through increased charges. So whilst I support the legislation, as does the coalition, I just want to put it on the record that I have had concerns and I still have concerns about the concept of a compensation scheme of last resort. Where unscrupulous operators give poor advice and are not in a financial position, either them or their insurers, to be able to provide assistance to people who have been impacted upon, then, sure, it's not a bad thing. But there are broader implications for the broader economy here. I just make this point again: you can't deleverage risk from our world. We need to be very careful about how we try and do that. There is risk in everything. I think we as legislators need to be very mindful of that.”Read the full speech in Hansard ↗
“Whilst we won't deny this bill a second reading—it has taken way too long for the bill to get to this point anyway—we do call on the House to recognise the government's mismanagement of the bill, the government's dishonesty with the Australian people, particularly with respect to tax, and the need for the government to commit to reducing inflation and pressure on the cost of living by controlling its own spending, not by taxing Australians more. I move the second reading amendment circulated in my name:”Read the full speech in Hansard ↗
“I rise to speak in support of the Financial Accountability Regime Bill 2023 and related bills which have been brought to this place to implement some of the recommendations of the royal commission into the banking industry. At their highest level, the bills do two things. Firstly, they introduce the Financial Accountability Regime, which, for ease of reference, I will call the FAR. Secondly, the bills introduce a compensation scheme of last resort to provide compensation to victims of financial misconduct in certain circumstances. The other two bills are largely consequential and relate to timing of the FAR and the compensation scheme. I don't intend to speak in detail on those.”Read the full speech in Hansard ↗
“With that in mind, the coalition will support the passage of the bill this evening.”Read the full speech in Hansard ↗
2 speakers · 2 oppose
“That's what we are debating here this evening and that is why the Greens will, in the committee stage, move amendments to this legislation that would provide for an accountability regime that is robust, that actually does its job of protecting bank customers and that includes the capacity for million-dollar fines for dodgy bankers who fail to meet their accountability obligations.”Read the full speech in Hansard ↗
“I would have thought that the key part of this was accountability, but Labor's mates in the banking lobby have made sure that this bill is about accountability in name only. Astonishingly, the bill does not provide for fines for wealthy bankers who have breached their accountability obligations. Instead, the only consequences are that some of their bonuses get revoked—Oh dear! Poor them; their poor bonuses. The government had initially listened to Greens concerns about the lack of accountability and agreed to maximum fines of $1 million for bankers who breached those obligations, but they backflipped on that after pressure from the banking lobby. Sadly, this is way too familiar a tale with this government.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Consideration in detail debate
Consideration in detail
The chamber considered the bill in detail and dealt with amendments before the next stage.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Committee of the Whole debate
Committee of the Whole debate
The bill reached this recorded parliamentary step.
Senate · Committee of the Whole debate
Committee of the Whole debate
The bill reached this recorded parliamentary step.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe formal approval that turns a passed bill into an Act of Parliament., turning the bill into an Act.
