Supervision Process for Payment Institutions

In 2011 the Central Bank of Ireland introduced the Probability Risk and Impact System (PRISM) framework for the supervision of regulated firms.  Further information about PRISM can be found on our PRISM page.

General

The supervision process for payment institutions mirrors the general supervision process of the Central Bank.  This general supervision approach seeks to ensure that all regulated financial service providers meet their responsibilities to have strong management, internal controls and compliance procedures in place and to have people of integrity and competence at all levels in their organisations.
All authorised financial service providers, whether engaged in international or domestic activities, are expected to implement best practice.

Governance

Payment institutions authorised under the implementing regulations must have systems, procedures and policies in place to mitigate risk and monitor compliance with their internal policies. The role of Consumer Protection: Supervision Division involves the oversight of the quality of the institutions’ corporate governance, risk management and internal control systems.

Supervisory Process

Our supervisory process is carried out by a number of different approaches some of which would include: 

  • Analysis of various returns submitted to the Central Bank
  • Conduct of inspections (may be overview, general or themed)
  • Holding of review meetings
  • Risk - rating of firms
  • Regular correspondence and engagement with firms under our supervision 

Consumer Protection Risk Assessment Model

The Central Bank expects firms to have a positive consumer-focused culture and a consumer protection framework that is fit for purpose and ensures that consumers’ best interests are protected. Further information on the Consumer Protection Risk Assessment Model can be found here.

Fitness & Probity

A sound and effective fit-and-proper test is a critical component of the regulatory regime.  To ensure the proper discharge of their responsibilities, it is important that persons in senior positions have the skills to manage a firm. 

Fitness relates to the qualifications, experience, knowledge and other relevant factors that will make a person fit for the performance of Controlled Function (CF) and Pre-Approval Controlled Function (PCF). Probity is a matter of character illuminated by a person’s past behaviour. It means acting honestly, ethically, with integrity and being financially sound. The Central Bank requires individuals proposed for CFs or PCFs to be honest, diligent and independent-minded and to act ethically and with integrity.

An Individual Questionnaire ('IQ') should be completed in respect of each person proposing to hold a PCF.  Please note that the Central Bank's Fitness and Probity regime came into effect on 1 December 2011.  For further information on the process, please follow the following link, and refer to the Guidance Notes  for applicants seeking approval for a PCF role in a Payment Institution.

Assessment of acquisitions of qualifying holding in Payment Institutions

Prior notice must be given to the Central Bank where a person proposes to acquire or increase a qualifying holding in a payment institution.

Prior notice must also be given to the Central Bank where a person proposes to dispose of or decrease a qualifying holding in a payment institution.

Read more about the Notification Process for proposed acquisitions of qualifying holdings in payment institutions.

Revocation of Authorisation

If a firm decides that it no longer wishes to act as a Payment Institution, it must formally request the withdrawal of its authorisation from the Central Bank.  The request for withdrawal of authorisation should clearly set out the rationale for seeking that withdrawal.