knowledge 15 December 2025 |

CBI reforms to Fitness & Probity: Guidance Consolidated, Expectations Clarified

• a Feedback Statement on CP160 (the “Feedback Statement”) (here);
• revised Guidance on the Standards of Fitness and Probity (the “F&P Standards”) (here) (effective from 20 November 2025) (the “Finalised Guidance”); and
• consolidated Fitness and Probity Standards - Code issued under Section 50 of the Central Bank Reform Act 2010 (here).

In unveiling the outcome of CP160, the CBI has implemented key changes and updates to its draft Guidance on F&P standards (“the Draft Guidance”). For further information on CP160 and the Draft Guidance, please see our previous briefing here.

The CBI’s introduction of a revised F&P framework seeks to simplify and reduce the burden of obligations and considerations for individuals in key positions in regulated entities in relation to F&P requirements.

Feedback Statement and Guidance

The CBI’s approach to updating the Draft Guidance considered and incorporated the stakeholder feedback received in response to CP160 and through the prism of further industry engagements. While largely welcoming the CBI’s proposed amendments to consolidate and enhance the transparency of the F&P framework, stakeholders’ responses addressed the need for further clarification, additional granularity and enhanced flexibility relating to certain aspects of the Draft Guidance.

Further detail was sought in relation to matters including identifying those carrying out controlled-function (“CF”) roles and due diligence obligations. Greater flexibility was also requested in the CBI’s expectations of the factors to be considered within F&P assessments.

In view of feedback received, in accordance with the principle of proportionality, the suitability of case-by-case assessments and to enhance the transparency of the F&P assessment process by providing further details, the Feedback Statement and Finalised Guidance include several developments which we set out an overview of as follows:

Temporary Officers

The CBI has set out a more flexible approach to temporary officer appointments in the Finalised Guidance. While the CBI’s previous approach required the use of temporary officers in exceptional cases, the Finalised Guidance enables the broader application of temporary officer appointments, considering varying circumstances and realities in the market.

A suitable individual may now be permitted by the CBI to fulfil a pre-approval controlled function (“PCF”) role in a regulated firm for a temporary period of up to six months, where the role has become vacant. However, this is contingent on prior agreement in writing from the CBI affirming that certain conditions have been fulfilled. These conditions are stipulated in the Finalised Guidance, including several requirements for a regulated firm to notify the CBI on matters including:

(a) why the Temporary Officer appointment is required (e.g. someone has unexpectedly resigned or has become sick);

(b) confirmation that the proposed Temporary Officer has agreed to comply with the F&P Standards and will continue to do so throughout their performance of the PCF role; and

(c) confirmation of the succession plans for the role where appropriate, with an acknowledgement that the original PCF may resume the role within the permitted period.

The Finalised Guidance notes that where a PCF has vacated their role on a permanent basis, the regulated entity will have three months from the date of the temporary officer’s appointment to submit an individual questionnaire for a permanent replacement. The temporary officer’s appointment should be a stop-gap measure, and successive temporary officers will not be permitted.

Identifying the CF population

The CBI has affirmed the dual classification of all PCF roles as CF-1 roles, and the designation of all compliance-focused PCF roles as both CF-1 and CF-2 roles. The CBI confirms that dual classification does not give rise to new requirements or expectations, specifically determining that no additional due diligence requirements for PCFs flow from the dual classification.

In relation to the role of company secretary, the CBI specifically reaffirms that the determination of whether or not that role should be designated as a CF-1 role should be established on a case-by-case basis, dependent on whether the individual exercises significant influence on how the affairs of a firm are conducted or if the functions of the individual are wholly administrative.

The Finalised Guidance reiterates that designation as a CF is not determined by an individual’s job title or position in the organisational structure but turns on the functions performed by the individual. Irrespective of seniority, those individuals ensuring, controlling or monitoring the compliance of a regulated financial service provider with its relevant obligations fall within the scope of the CF-2 category. This does not include administrative or support staff but can include those persons in an entity providing the internal audit function where those persons have direct involvement in ensuring, controlling or monitoring compliance of the regulated entity.

Due Diligence

The CBI notes its expectation for regulated firms to take a proportionate approach in the implementation of the F&P regime, save for the standard on probity to which the principle of proportionality is not applicable. The CBI expects firms to fulfil their due diligence obligations on a best-efforts basis, taking into account the nature of the PCF role, the nature, scale and complexity of the firm and the limitations of public records.

The Finalised Guidance confirms that typically matters occurring outside the ten-year look-back timeframe should not hinder the applicant’s meeting of the F&P Standards, save in the instance of the imposition of a custodial sentence or other aggravating circumstances. Firms are directed to seek all information regarding criminal, civil or regulatory actions in relation to the applicant, i.e. not just within the previous ten years.

In a change from the Draft Guidance, the Finalised Guidance does not include the expectation to provide “evidence of financial soundness in order to uphold expected standards”. The CBI notes it does not expect applicants to provide bank statements to prove financial soundness and expects checks to be carried out on a best-efforts basis.

In acknowledgement of the challenges identified by industry, the CBI has revised and simplified the approach to meeting reputation evidential requirements in PCF applications for payment institutions (PIs), e-money institutions (EMIs) and account information service providers (AISPs) pursuant to Directive (EU) 2015/2366 (PSD2) and the associated guidelines from the European Banking Authority¹. What will be required now will depend on the country of residence of the proposed PCF role holder.

Capacity to perform a role

The CBI specifies that CF and PCF role-holders must have sufficient time to carry out the roles they occupy and clarifies that the assessment of the appropriateness of arrangements should be determined in a manner proportionate to the specific CF and PCF role(s) and on a case-by-case basis.

Notwithstanding that the CBI continues to expect full-time commitment to executive PCF roles, and that firms should be able to provide reasoning as to why the role does not necessitate full-time commitment in the instance of deviating circumstances, the default expectation of full-time commitment in respect of executive PCF roles has been removed and is not contained in the Finalised Guidance. 

The CBI reiterates its expectation for regulated firms to demonstrate that effective strategic direction, decision-making, governance and risk management are adequately present in Ireland to ensure that the regulated firm can be effectively supervised by the CBI. The determination of requests for non-resident PCF roles will be assessed on a case-by-case basis in accordance with the nature, scale and complexity of the firm and the PCF role(s).

Independence of Mind and Independence

The Finalised Guidance sets out that regulated firms are expected to be satisfied that members of the firm’s board have independence of mind when assessing the individual’s F&P. The Finalised Guidance clarifies that, subject to matters suggesting an alternative, a member of the firm’s board that meets the requirements relating to qualifications and experience may be assumed to have sufficient independence of mind to carry out the role.

Inherent Responsibilities

In addressing queries pertaining to the inherent responsibilities for specific PCF roles pursuant to the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Senior Executive Accountability Regime) Regulations 2024 (the “SEAR Regulations”), the CBI has clarified that whilst the responsibilities defined in the SEAR regulations are relevant across all sectors, the SEAR Regulations continue to apply only to those within the current scope of the regime. Consequently, the reference to SEAR is not included in the Finalised Guidance.

Level of knowledge and experience

The CBI has introduced additional flexibility and clarity to its expectations regarding the assessment of whether an individual is competent and capable to fulfil a specific PCF role on the basis of an individual’s level of knowledge, experience and qualifications, where relevant.

In respect of members of the firm’s board, an individual who does not possess the level of experience commensurate with the requirements set out in the Finalised Guidance may still meet the F&P requirements where there is an appropriate justification, such as firm or role specific factors.

In respect of head of control functions, the CBI states that it will consider candidates applying for all roles with qualifications obtained and/or professional membership of associations within Ireland or different jurisdictions.

Collective Suitability, Diversity and Inclusion

The CBI sets out its flexible, proportionate and constructive approach to its expectations in relation to the collective suitability and the diverse composition of the firm’s boards, in line with the Corporate Governance Requirements, where relevant. The CBI emphasises the necessity for diversity in the knowledge, skills and experience of board members in order for the board to provide efficient and effective oversight.

Review of the list of PCF roles

The Feedback Statement clarifies the amendments the CBI is making to its proposed approach to reviewing the PCF list. The CBI has decided not to remove the sector specific categorisations and not to conduct a two-stage review of the PCF list as was previously proposed, in view of the consequent operational challenges and administrative burdens identified by industry. The CBI has instead opted to conduct a once-off substantive revision to the PCF list and launch a consultation on its proposed amendments in 2026. The CBI intends to implement the reviewed PCF list in mid-2027, in alignment with the Senior Executive Accountability Regime (SEAR) framework review.

For now, the CBI is, pending amending regulations, implementing certain other changes to the PCF list which will affect certain regulated entities and which such entities should be considering. These are:

• the removal of the Head of Traded Markets role (PCF-24) and the Head of International Primary Markets role (PCF-25);
• the addition of a Head of Safeguarding for payment institutions and electronic money institutions; and
• the addition of a Head of Safeguarding for crypto-asset service providers.

How Can McCann FitzGerald LLP Help?

McCann FitzGerald LLP is a premier law firm in Ireland and advises on the full range of legal matters.  We have experience in guiding applicants through a variety of CBI authorisation processes and in helping clients to comply with their legal obligations, including on F&P matters, once authorised. In addition, we offer assistance with aspects of the F&P process during the authorisation/registration process including with individual questionnaires and where candidates are called for interview by the CBI as part of the F&P process. If you are considering applying for authorisation or registration in Ireland, or proposing a new PCF role holder, or if you need any assistance with F&P related matters more generally, please contact us for further information as to how we can help.