Financial Sector Reform (Hayne Royal Commission Response No. 3) 2021

# Financial Sector Reform (Hayne Royal Commission Response No. 3) Bill 2021 **What it does** This bill cleans up and finalizes changes to how Australia's financial industry is regulated, following recommendations from the Hayne Royal Commission inquiry. It replaces the old "banking executive accountability" rules with a broader "financial accountability regime" that applies to banks, insurance companies, superannuation funds, and other financial services providers. It also creates a new safety net fund to protect everyday people if a financial services company collapses and can't pay back customer money. **Why it matters** The Hayne inquiry found serious misconduct in Australia's financial sector, so these reforms aim to make executives more personally responsible for their decisions and ensure customers have better protection if things go wrong. This directly affects where you bank, invest, or get insurance—and what happens to your money if that company fails. **Key details** - **Compensation scheme**: A new "last resort" fund will step in to pay back eligible customers when a financial services provider goes bust (similar to existing protections, but expanded) - **Who's covered**: The stricter accountability rules now apply across banks, insurance, life insurance, superannuation, and credit providers—not just banks - **Timeline**: Most changes start when the separate Financial Accountability Regime Act 2021 comes into effect; the old banking-only rules end on a date to be set (no later than mid-2021)