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The Front Page

News Alert

24 November 2011

Fitness and Probity update from the Central Bank 

The Central Bank of Ireland issued a press release regarding its final guidance in relation to its new fitness and probity regime which becomes effective from 1 December 2011.


The press release notes that the revised guidance addresses issues raised by ourselves and others during the consultation process and covers, in particular, detailed guidance in relation to outsourcing. The Central Bank intends to publish revised Regulations and Standards clarifying both the scope and application of the regime. The guidance is expected to issue in the very near future.

 

The main changes are:

  • While the effective date of the Standards remains 1 December 2011 for 'Pre-Approval Controlled Functions' (PCFs) and firms are required to notify the Central Bank of in situ PCFs before 30 December 2011, firms will have until 31 March 2012 to fulfil their due diligence responsibilities. This is very helpful as the position of director in a regulated fund company or management company is a PCF.



  • Where outsourcing is to a regulated financial services provider, requirements of the outsourcing firm in relation to PCFs will not apply.

  • Where outsourcing is to an unregulated entity, the Service Level Agreement (SLA) must address issues of compliance with both 'Controlled Functions' (CFs) and PCF requirements.

  • Where a SLA is already in place, it will be necessary to reflect the requirements of the Fitness and Probity regime when the SLA is next updated or in the next 12 months, whichever is earlier.

  • The Company Secretary function will be removed from the categories of PCF. (However, where an individual in the position of Company Secretary exercises significant influence, they will continue to be captured under CF1.)

  • Branches of EEA authorised institutions operating in the State fall outside the scope of application of the Standards.

     

    The revised guidance shows the Central Bank's desire to ensure a robust regulatory regime, which is also pragmatic and workable for industry. We welcome this approach.


    View the October Front Page.

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