Press Release 01 September
The Central Bank of Ireland today published its Regulations and Standards of Fitness and Probity under Part 3 of the Central Bank Reform Act 2010.
The Act gave the Central Bank wide ranging powers across the financial services industry to:
- approve or veto the appointment of people to certain positions;
- investigate and where appropriate remove or prohibit certain position holders; and
- set statutory standards of fitness and probity across the financial services industry.
The Regulations published today confirm that the new regime will apply to two main groups of staff “Pre-Approval Controlled Functions” or PCFs and “Controlled Functions” or CFs. The Regulations identify 42 senior positions as PCFs which require the Central Bank’s approval before people can take up those positions. The Regulations also prescribe specific categories of staff as CFs, which are positions from which individuals can be temporarily or permanently removed or indeed prohibited from taking up in the future. The Central Bank has narrowed the scope of controlled functions relating to customer facing activities by specifying categories of staff who interact with customers, which is in turn aligned with those activities currently covered by the Minimum Competency Code.
The Standards set out conditions that staff must satisfy to perform the function assigned to them. These include the obligation to be competent and capable to carry out the controlled function, to act honestly, ethically and with integrity and to be financially sound.
The Act also makes employers responsible for ensuring that staff meet the Standards, both on entry to the financial services industry and throughout their careers. In doing so, employers are now required to carry out due diligence to ensure the standards are met.
The new regime will be introduced on a phased basis to allow institutions adequate time to introduce the necessary internal controls and procedures to comply with the Regulations and Standards.
From 1 December 2011 existing and new staff in PCFs will be subject to the Regulations and Standards. Firms are required to notify the Central Bank of each individual in the organisation in a PCF by 31 December 2011.
From 1 March 2012 new appointments to less senior positions (CFs) will be subject to the Regulations and Standards. From 1 December 2012 the Regulations and Standards will apply to all staff in existing CFs.
The Central Bank has also today published Draft Guidance for industry which, among other things, indicates the type of due diligence that regulated financial service providers should carry out in relation to persons proposed for or holding PCFs or CFs. Interested parties have until 30 September 2011 to respond to the Draft guidance.
The Central Bank of Ireland has published responses received to the consultation and these are available here.
The Central Bank has published the Regulations, Standards, and Draft Guidance and these are available at the following links:
To see Regulations click here.
To see Standards click here.
To see Draft Guidance click here.