You will be aware that the Central Bank has recently introduced a new fitness and probity regime which consists of the following:
The Central Bank Reform Act 2010 (Section 20 and 22) Regulations 2011 (SI 437 of 2011) (the "Regulations") The Fitness and Probity Standards (the "Standards"); and Draft Guidance on the Fitness and Probity Standards (the "Guidance"). Following much discussion in the market, on 23 November 2011 the Central Bank published final guidance to assist entities in meeting the requirements of the new regime. The final Guidance replaces and supersedes the initial draft guidance issued by the Central Bank and addresses various issues raised during the consultation process, with a particular focus on the area of outsourcing. The following important changes to the draft Guidance were noted:
Where outsourcing is to a regulated financial services provider, the requirements of the outsourcing firm in relation to "Pre-Approval Controlled Functions" ("PCFs") will not apply; Where outsourcing is to an unregulated entity, the service level agreement ("SLA") must address issues of compliance with the requirements relating to both "Controlled Functions" ("CFs") and PCFs. If an SLA is already in place, the SLA must be updated to reflect the above requirements when it is next updated or within the next 12 months; The company secretary function will no longer be classified as a PCF, however, if an individual in the position of company secretary exercises significant influence, he or she will be classified as a CF1; and Branches of European Economic Area institutions operating in the State now fall outside the regime. Reminder in relation to end March deadline
The Fitness and Probity Standards became effective on 1 December 2011 in respect of PCFs and firms were required to notify the Central Bank of each individual in the organisation in a PCF before 31 December 2011. From 1 March 2012, the Standards will apply to persons who have been newly-appointed to CFs, including new offers of appointment and internal transfers or promotions to CF roles. The...