The Central Bank has published a consultation paper on the enhanced fit and proper regime it intends to apply under Part 3 of the Central Bank Reform Act 2010 (the "Act"). The new regime is intended to come into effect on 1 September 2011. The consultation process ends on 20 May 2011.
Pre-approval Controlled Functions and Controlled Functions
The Central Bank may designate a function within a regulated financial services provider as a Pre-Approval Controlled Function (PCF) or Controlled Function (CF). These functions involve the exercise of significant influence on the conduct of a regulated financial services provider. Pre-approval must be obtained from the Central Bank before a person can be appointed to a PCF; a PCF holder must be deemed fit and proper before taking up that role. A CF holder does not require pre-approval of appointment, but can be removed from office by the Central Bank if that CF holder is considered not to be fit and proper.
Proposed appointments will be closely scrutinised and the Central Bank may investigate, suspend, remove permanently and/or prohibit an individual from carrying out a controlled function in a regulated financial services provider in the future.
The enhanced fitness and probity regime applies to all regulated financial services providers (except credit unions) and includes, for example:
credit institutions; insurance undertakings; a MiFID or Investment Intermediaries Act investment firm; trustees or custodians of investment funds; UCITS and Non-UCITS self-managed investment companies; and management companies within the meaning of the Unit Trusts Act 1990 or Part XIII of the Companies Act 1990 or Investment Funds, Companies and Miscellaneous Provisions Act 2005. In general, the following persons within regulated financial services providers perform a PCF role:
executive director; non-executive director; chairman of the Board; chairman of the audit committee; risk committee; remuneration committee and nomination committee respectively; chief executive; company secretary; each member of a partnership; and heads of the following areas: finance, compliance, internal audit, risk, compliance with responsibility for anti-money laundering and retail sales. PCFs in respect of credit institutions include:
head of treasury; head of credit; and head of asset and liability management. PCFs in relation to investment managers include:
branch managers within the State; heads of trading and...