The Central Bank of Ireland (the "Central Bank") published its final Guidance on Fitness and Probity Standards on 23 November 2011. The Guidance clarifies some important aspects of the regime as it applies to the Investment Funds sector. The new regime came into effect on 1 December 2011.
(i) Extension of Deadline to Complete Due Diligence on In Situ PCFs
The deadline by which regulated financial service providers ("RFSPs"), including investment funds, must provide a written confirmation to the Central Bank that they are satisfied that the persons in Pre-Approval Controlled Function ("PCFs") roles are compliant with the Fitness and Probity Standards (the "Standards") and that the firm has obtained each person's written agreement to abide by the Standards, has been extended from 31 December 2011 to 31 March 2012.
Accordingly, the due diligence which must be carried out to substantiate this confirmation, will not need to be completed until 31 March 2011.
The requirement to submit to the Central Bank by 31 December 2011, a list of all individuals performing PCFs as at 1 December 2011 still applies, however.
(ii) Due Diligence to be Undertaken
The Central Bank has acknowledged that there is a distinction to be drawn between individuals in PCFs who are in situ as at 1 December 2011 and new appointments to PCF roles, in the context of the standard of due diligence expected to be undertaken to verify their compliance with the Standards. The RFSP must exercise its own judgement on a case by case basis, taking into account the relevant individual's experience and length of service in the role. Specifically, the Central Bank has conceded that the requirement to obtain a reference will not apply where the person has performed the same PCF or Controlled Function ("CF") in the RFSP for at least one year as at 1 December 2011.
(iii) Previously Approved Directors Taking on New Directorships
The Central Bank has confirmed that, under the new regime, the new online Individual Questionnaire must be completed for all appointments to the Boards of all investment funds with effect from 1 December 2011. Therefore, albeit that an individual may be currently approved by the Central Bank (under the old regime) as a director of an investment fund, he or she must undergo the approval process under the new regime for any new directorships of investment funds that he or she takes on from 1 December 2011 onwards.
For Qualifying Investor Funds...