The first part of the Individual Accountability Framework, SEAR, requires every in-scope RFSP to set out clearly where responsibility and decision-making lies within the organisation.
What is the Individual Accountability Framework?
The Individual Accountability Framework is intended to confer powers on the Central Bank of Ireland (the “Central Bank”) to strengthen and enhance individual accountability in the management and operation of regulated financial service providers (each an “RFSP”).
What does the Individual Accountability Framework involve?
The Individual Accountability Framework has four parts.
Senior Executive Accountability Regime (“SEAR”)
Individual and Business Conduct Rules
The regime imposes obligations on RFSPs with respect to expected standards of conduct (“Standards for Business”); and expected standards of conduct for every person carrying on a Controlled Function ("CF") role (“Common Conduct Standards”); and certain additional expected standards of conduct for those in Pre-approval Controlled Functions (“PCF”) and CF-1 roles (“Additional Conduct Standards”).
The Fitness and Probity Regime
The regime requires RFSPs to periodically certify the fitness and probity of persons in CF and PCF roles. All RFSPs must not permit a person to perform a CF (including PCF) role unless the RFSP has certified that it is satisfied that the person complies with the applicable Fitness and Probity standards before any appointment to a CF (including PCF) role.
Central Bank’s Powers
The regime removes the so-called “participation link” so that the Central Bank no longer has to first find that an RFSP has committed a regulatory breach before it can take enforcement action against any individual in that RFSP.
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The Individual Accountability Framework
Testimonial
Josh Hogan | Partner
“By clearly defining roles and expectations, the IAF empowers individuals in regulated firms to act with integrity and diligence. Proportionality and reasonableness are at the heart of the IAF. Accountability need not be a burden – when implemented well, the IAF can be a cornerstone of sustainable governance for regulated firms operating in the modern regulatory landscape.”
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