Central Bank Of Ireland Investment Firm Corporate Governance

Author:Mr Eoin O'Connor, Conor Daly, Bill Laffan, Niall Esler and Shane Martin

The Central Bank of Ireland (the "Central Bank") has published its Corporate Governance Requirements for Investment Firms and Market Operators 2018 (the "Requirements") (click here). The publication of the final Requirements follows the Central Bank's publication of CP120: Second Consultation Paper on the Corporate Governance Requirements for Investment Firms and Market Operators ("CP120") in May of this year ( see Walkers advisory on CP120). The Requirements largely track the CP120 proposals, with one material change in relation to the composition of the audit committee.

A summary of key provisions and changes from the CP120 proposals is set out below.

Application Date

The Requirements will apply from 1 July 2019. Existing investment firms should consider whether their governance arrangements are in compliance while entities seeking authorisation should ensure their application includes proposals that will meet with the Requirements.

In-scope entities

The Requirements apply to MiFID authorised investment firms or market operators and non-retail investment intermediaries authorised under the Investment Intermediaries Act 1995 which have a PRISM impact rating of High, Medium High or Medium Low ("In-Scope Firms"). While firms with Low PRISM ratings are not required to adhere to the Requirements, the Central Bank encourages such firms to do so.


The Requirements are to be read in conjunction with:

the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017) (click here); the delegated acts issued under MiFID II; the ESMA Guidelines on the management body of market operators and data reporting services providers (click here); and the Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body and key function holders under CRD IV and MiFID II (click here). Key Provisions

The Board and Chairman

The Requirements state that the board of directors of an In-Scope Firm must be composed of a majority of independent non-executive directors ("INEDs"). An exemption to this requirement applies for In-Scope Firms which are subsidiaries of a group (a "Subsidiary"), with varying INED and group director requirements depending on the Subsidiary's PRISM Impact rating.

The Requirements set out detailed standards for determining the independence of an INED.

The chairman of the board must be of sufficient expertise, qualifications and experience and must be an INED. There...

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