The first part of the General Scheme, SEAR, will require every in-scope RFSP to set out clearly where responsibility and decision-making lies within the organisation.
What is the Individual Accountability Framework?
The new 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 new regime involve?
The Individual Accountability Framework, will be comprised of four parts.
New Individual and Business Conduct Rules
The new regime is intended to impose 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 so-called ‘persons in senior roles’ (“Additional Conduct Standards”).
The Enhanced Fitness and Probity Regime
The new regime will require 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 unless the RFSP has certified that they are satisfied that a person complies with the applicable Fitness and Probity standards before any appointment to a CF (including PCF) role.
Enhancements to the Central Bank’s Powers
Commentary from the Central Bank indicates that the new regime will remove the so-called “participation link” so that the Central Bank will no longer have to first find that an RFSP has committed a regulatory breach before it can take enforcement action against any individual in that RFSP.
Josh Hogan | Partner
Implementation will be a significant undertaking for RFSPs, involving inputs from throughout the business.