Individual Accountability Framework

The Central Bank (Individual Accountability Framework) Act 2023 (the IAF Act) was signed into law on 9 March 2023 and was partially commenced on 19 April 2023.

The Individual Accountability Framework (IAF) includes the following key elements:

1. Senior Executive Accountability Regime (SEAR): This will require in-scope firms to set out clearly and fully where responsibility and decision-making lie within the firm’s senior management.
2. Conduct Standards: These include the Common Conduct Standards, which are a set of expected standards of conduct which apply to certain individuals in all regulated firms, and the Additional Conduct Standards which apply to senior executives in all regulated firms, which apply from 29 December 2023 .
3. Enhancements to the current Fitness & Probity (F&P) Regime: This will include clarifying firms’ obligations to proactively certify that individuals carrying out certain specified functions are fit and proper.
4. Amendments to the Administrative Sanctions Procedure (ASP). A key change will be the Central Bank’s ability to take enforcement action under the ASP directly against individuals for breaches of their obligations rather than only for their participation in breaches committed by a firm.

The Central Bank has conducted two public consultations on aspects of the IAF which are discussed below:

• CP153 – (Enhanced governance, performance and accountability in financial services regulation and Guidance under the Central Bank (Individual Accountability Framework) Act 2023) and
• CP154 – (Consolidated Guidelines in respect of the Central Bank’s Administrative Sanctions Procedure).

Guidelines on Conduct Standards

Pursuant to section 53G(1) and section 53H(2) of the Central Bank (Individual Accountability Framework) Act 2023, the Central Bank of Ireland has prepared guidelines on conduct standards and on notification and training for persons subject to conduct standards, which were published within the Guidance on the IAF.

SEAR Regulations April 2024

Pursuant to Section 48 of the Central Bank (Supervision and Enforcement) Act 2013, the Central Bank has issued the SEAR Regulations and the related final Guidance on the IAF. The Central Bank will also issue the following shortly:

• IAF Frequently Asked Questions to assist firms in their ongoing implementation of the Framework; and
• A system “How To” Guide for submitting IAF documentation.

Enhancements to the current Fitness & Probity Regime December 2023

Enhancements to the current Fitness & Probity (F&P) Regime will go live from 29th December 2023. View the latest F&P announcements.

Feedback Statement to CP154 published on 13 December 2023

The Central Bank has published consolidated Administrative Sanctions Procedure Guidelines (ASP Guidelines) which replace the existing published ASP Outline 2018, Inquiry Guidelines 2014, and ASP Sanctions Guidance 2019.

This follows a twelve week public consultation on the ASP Guidelines (CP154) which launched on the 22 June and closed on 14 September 2023. The public consultation process sought our stakeholders’ views on the ASP Guidelines and our proposed approach to the ASP.

The Central Bank has published a Feedback Statement in order to respond to our stakeholders’ submissions on CP154 and provide an update on the outcome of CP154 in terms of resulting changes to our proposed approach to the ASP. View all submissions made in response to CP154.

The IAF Act introduces a number of important changes to enhance the ASP.  The changes to the ASP Guidelines reflect the changes introduced in the IAF Act, certain policy changes based on our experience of utilising the ASP and a consideration of the submissions received in respect of CP154.  The changes introduced by the IAF Act apply, subject to transitional arrangements, to the enforcement of any obligations under the ASP whether those matters are related to existing obligations under financial services legislation, new obligations introduced as part of the IAF or otherwise become subject to the ASP.

Feedback Statement to CP153 published on 16 November 2023

Following a three month consultation process, the Central Bank has published a Feedback Statement and issued Regulations and Guidance to firms on the IAF.

The Guidance provides clarity regarding the Central Bank’s expectations for the implementation of three aspects of the framework: the Senior Executive Accountability Framework (SEAR), the Conduct Standards and certain aspects of the enhancements to the Fitness & Probity regime.

The Conduct Standards and enhancements to the Fitness and Probity regime are set out in legislation and will become applicable on 29 December 2023. The Feedback Statement confirms that the SEAR Regulations that describe responsibilities of specific roles and requirements of firms will apply to in-scope firms from 1 July 2024 and to (Independent) Non-Executive Directors at in-scope firms from 1 July 2025.

Public consultation (CP 154) launched on 22 June 2023

The Central Bank launched a twelve week public consultation on proposed updates to certain aspects of its ASP.

See our Administrative Sanctions Procedure page for more details.

Public consultation (CP153) launched on 13 March 2023

Following enactment of the Central Bank (Individual Accountability Framework) Bill 2022 on 9 March, the Central Bank launched a three-month consultation on 13 March 2023 on key aspects of the implementation of the IAF, including the publication of draft regulations and guidance.

The draft regulations and guidance seek to provide clarity in terms of the Central Bank’s expectations for the implementation of three aspects of the framework: the SEAR, the Conduct Standards and certain aspects of the enhancements to the Fitness & Probity Regime.

Fitness and Probity Enforcement Procedures

On 20 April 2023, we updated our procedures in relation to fitness and probity investigations, suspensions and prohibitions to align these with the IAF Act. See our fitness and probity enforcement page for further details.