APRA and ASIC Launch Consultation to Streamline Financial Accountability Regime Reporting

Key Takeaways

• APRA and ASIC have opened consultation on reducing FAR reporting obligations, including removing key functions requirements from the regulator rules and dropping direct report information from accountability maps.
• The regulators estimate the changes would cut reporting for all accountable entities and about 4500 accountable people, and halve the number of accountability map updates.
• Compliance teams should assess operational impacts now and consider submitting feedback before finalization, targeted for the end of 2026.

Deep Dive

The consultation is a deregulatory step within FAR, which applies to banks, superannuation funds, and insurers. The regulators are explicit that the aim is to reduce administrative burden while preserving the accountability standards of the regime. The proposals change reporting mechanics, not the core accountability obligations. Accountable persons remain subject to FAR's substantive expectations, and the regulators have signaled they will retain the information they need for oversight.

Two changes are proposed. First, key functions requirements would be removed from the FAR regulator rules. Second, accountability maps would no longer need to include information on accountable persons' direct reports. The regulators estimate this will reduce reporting for all accountable entities and about 4500 accountable people, and halve the number of accountability map updates. Because the update volume falls so sharply, entities that currently trigger frequent map revisions after organizational changes should see meaningful efficiency gains.

On timing, the regulators intend to finalize the changes by the end of 2026, with effect from early 2027. This is subject to consultation feedback, so the final scope could differ from the draft. The consultation materials and an accompanying letter are available on APRA's website. The press release does not state a closing date for submissions, so teams should confirm it from the source materials promptly.

Recommended actions: (1) review the draft materials and map them to current FAR processes, including accountability map maintenance, change triggers, and related notifications; (2) identify which internal procedures, templates, and systems rely on key functions or direct report data, and plan their retirement or modification; (3) decide whether to submit feedback, directly or through industry bodies, particularly where the changes could create ambiguity or leave gaps in internal governance; and (4) maintain current compliance until any changes take effect, since the proposals are not yet final.

Risk implications are modest and largely favorable, with lower reporting effort and fewer error-prone updates. Residual risks include implementation misalignment if final rules differ from the draft, and the temptation to weaken internal accountability documentation. Entities should keep internal records of direct reporting lines and key functions for their own governance, board oversight, and supervisory engagement, even where regulatory reporting is no longer required. Regulators may still request this information in supervisory activity.

Source: Australian Prudential Regulation Authority