FAR Reforms: What Reduced Compliance Obligations Mean for Asset Finance in Australia
In June 2026, APRA and ASIC announced changes to the Financial Accountability Regime (FAR) aimed at reducing administrative obligations for financial services licensees. For businesses and individuals in the asset finance space, it is worth understanding what the regime covers, what is changing, and why a shift in regulatory reporting requirements can matter to the broader lending environment.
What Is the Financial Accountability Regime?
The Financial Accountability Regime is a regulatory framework administered jointly by APRA and ASIC. It applies to authorised deposit-taking institutions, insurers, and — more recently — a wider range of Australian financial services licensees, including those operating in asset finance. The regime sets out accountability obligations for entities and key individuals within them, including requirements to maintain accountability maps that document roles and responsibilities. These obligations are designed to promote transparent governance and clear lines of accountability across the financial services sector.
What Changes Are Being Made?
According to the joint announcement from APRA and ASIC on 16 June 2026, the reforms involve removing certain key functions and requirements within the regime, and raising the materiality threshold that triggers an obligation to notify regulators when accountability arrangements change. ASIC will also reduce the evidence of competence requirements for responsible managers of FAR entities under AFSL rules, with those changes taking effect from October 2026. The regulators estimate these adjustments will affect approximately 4,500 accountable individuals and around 2,000 current licensees.
What This Means for the Asset Finance Sector
The practical effect of these changes is a reduction in routine reporting and documentation obligations for entities subject to the regime — including asset finance brokers and lenders. APRA and ASIC estimate that changes to accountability maps alone could at least halve the number of updates entities are required to lodge. For businesses operating under an AFSL, this may mean less time spent on certain administrative compliance tasks. It does not alter the underlying conduct obligations that apply to licensees, nor does it affect how individual borrowing applications are assessed or approved.