knowledge 22 July 2025 |

Central Bank of Ireland’s Fitness and Probity Updates 2025: Further steps taken towards improvement

The Central Bank of Ireland (the “CBI”) has released several documents as part of its review of the Fitness and Probity (“F&P”) regime. Following Andrea Enria’s Fitness and Probity Review¹ (the “2024 Review”), the CBI has, and continues to make, a number of updates to its F&P regime following its acceptance of the 12 recommendations for improvement in the 2024 Review (the “Recommendations”).

In this briefing, we examine the key documents recently published by the CBI in relation to F&P. We highlight the advancements made by the CBI and how each document will be useful to applicants seeking authorisation and regulated firms going forward.  

1. Consultation Paper on Amendments to the F&P Regime (“CP160”) (here)

The CBI published CP160 in response to the Recommendation for greater clarity and transparency in respect of supervisory expectations when applying the F&P standards. The CBI conducted a consultation where it sought feedback from market participants and stakeholders on its proposal to (i) consolidate F&P guidance into a single document; and (ii) amend the list of pre-approval controlled function (“PCF”) roles.  CP160 concluded with a section of questions to be completed by respondents in relation to the proposed revisions and enhancements to the F&P regime. The consultation period ended on 10 July 2025.

2. Draft Guidance on the Standards of F&P (“the Draft Guidance”) (here)

The Draft Guidance, which is set out as an appendix to CP160, will helpfully consolidate all guidance on F&P into a single document.

The CBI states that the intention of the Draft Guidance is to ensure industry understanding of the F&P process, including by:

1. attributing clear objective measures and role summaries for PCFs as part of the application process;
2. detailing certain matters that should be considered in relation to conflicts of interest;
3. providing further clarification on the assessment of board/management team suitability and diversity; and
4. providing guidance on the relevance of past events to an individual’s application.

The CBI notes that due to the range of sectors supervised by the Central Bank, the varying nature, scale and complexity of firms within these sectors, and the number and variety of PCF roles assessed, the CBI does not believe it is not possible to prescribe an exact list of objective criteria to be used in the F&P assessment. Rather, assessments will be proportionate and depend on the nature, scale and complexity of the entity. The following information is intended to provide a high-level understanding to prospective applicants and regulated firms of some of the areas in which the CBI is seeking to enhance the F&P process.

(i) Objective measures/role summaries

The Draft Guidance contains information to assist firms in identifying CF and PCF roles within their organisation, together with information on the requirements and inherent responsibilities for several of those roles.

Chapter 2 of the Draft Guidance details the approach firms should take to identify the CF and PCF population. The CBI has designed this to assist applicants and regulated entities in establishing whether someone is carrying out a CF or PCF role, regardless of what title that person may be given by the applicant entity/regulated financial service provider. The approach captures the following CF and PCF roles:

• CF1 – CF11 Chief Executive Officer (PCF-8)
• Branch manager of branches outside Ireland (PCF-16)
• Chief Operating Officer (PCF-42)
• Chief Information Officer (PCF-49)
• Head of Material Business Line (PCF-50)
• Head of Market Risk (PCF-51)

In addition to the above, the CBI provides high level detail on the requirements and inherent responsibilities for certain PCF roles. This is provided in the Draft Guidance by way of a number of tables. Role summaries and guidance on the CBI’s expectations on the level of knowledge and experience are provided for the following roles:

• Executive director (PCF-1)
• Non-executive director (PCF-2A)
• Independent non-executive director (“INEDs”) (PCF-2B).
• Chair of the Board (PCF-3)
• Chief Executive Officer/Credit Union Manager (PCF-8)

Additionally, role summaries and guidance on the CBI’s expectations on the level of knowledge are provided for the following roles:

• Chief Risk Officer/Risk Management Officer (PCF-14)
• Head of Compliance (PCF-12) Head of Internal Audit (PCF-13).
• Head of Actuarial Function (PCF-48)
• Head of Finance (PCF-11)

In relation to the knowledge and experience expectations for a role, the CBI states that this will be “commensurate with the requirements of the role and the nature, scale and complexity of the firm”. The CBI notes that time commitment will be considered by the CBI in assessing a prospective PCF’s F&P for the relevant role. Additionally, the CBI notes it is possible for a person to hold more than one PCF role, as long as the person has the required competence for each role. Notably, while the CBI states that this is without prejudice to any sectoral legislation which prevents a person from holding more than one PCF role, and that the CBI expects such approvals to be quite limited, the CBI does not comment on whether, where there is no legislative prevention, a person will be capped at holding two PCF roles for the same entity or whether someone could potentially hold more than two PCF roles. It will be interesting to see if the CBI clarifies this point, considering the CBI’s ‘Expectations for Authorisation of Payment and Electronic Money Institutions and Registration of Account Information Service Providers’ from April 2024 notes that a proposal for someone to hold three PCF roles would cast serious doubt on the commitment of the applicant firm to have sufficient governance in place². This could potentially be influenced by the type of regulatory authorisation in question and the nature, scale and complexity of that entity’s business.

(ii) Conflict of interest management and Independence

The CBI views the avoidance of conflicts of interest as integral to any PCF role. Therefore, the Draft Guidance addresses conflicts of interest by including specific provisions on how entities and proposed and existing PCF role holders can identify and manage them.

The existence of a conflict of interest does not automatically lead to the CBI finding the applicant unsuitable for the role(s) and assessment will be completed on a case-by-case basis.

The Draft Guidance also clarifies the distinction between independence of mind, which all board members should have, and which should not depend on the nature, scale and complexity of the entity, and the independence for INEDs. The Draft Guidance provides a list of criteria to be considered in assessing whether a director is independent, including any financial obligations the person has to the entity and whether the person is a significant shareholder in the entity.

(iii) Collective Suitability and Diversity

The Draft Guidance also addresses the assessment of the collective suitability and the diversity of the board/management team of an entity. The Draft Guidance notes that the suitability of the board is the responsibility of regulated firms and that having a diverse board is important. Board members should have the appropriate skills and experience required for the relevant entity’s business and to allow matters to be properly discussed in order to make decisions. The CBI states that while some entities are required by law to have diversity policies in place, the CBI sees diversity policies for all firms as best practice.

(iv) Relevance of past events

The Draft Guidance sets out information on criminal, civil and regulatory actions to consider in assessing a person’s F&P and covers both ongoing and concluded actions. Past events related to an applicant are relevant for F&P applications and should be disclosed in the individual questionnaire (“IQ”). However, the Draft Guidance notes that generally, where it has been ten years since an action, then unless a custodial sentence might have been imposed and where there are no other matters arising, it can be assumed the person meets the F&P standards. That being said, it is noted in the Draft Guidance that relevant information should be assessed on a case-by-case basis and certain facts may still be considered in the context of a person’s F&P, regardless of the length of time that has passed.  

Following the Recommendation to clarify the CBI’s expectation of firms when appointing individuals to PCF roles, CP160 also contains a review of the list of prescribed PCFs. A firm must seek the CBI’s approval before appointing an individual to a PCF role. The rationale for this is that PCF roles allow an individual to exert control over a regulated firm’s financial affairs and have a notable impact on an entity’s strategy, culture, governance and management. Therefore, the CBI must ensure that the individual is competent, capable, honest, ethical, of integrity and financially sound.

As the CBI processes a large number of F&P applications per year, having a clearer and more defined list of PCF roles will allow the CBI to enhance the processing of applications. The CBI is therefore proposing to amend the list of PCF roles. By doing this, the CBI seeks to make the list of PCF roles clearer and applicable generally to all regulated firms (except credit unions), rather than divided into sector-specific subcategories.

As the list of PCF roles is detailed in the Senior Executive Accountability Regime (“SEAR”), which was only introduced relatively recently, the CBI does not find it appropriate to change the full list of PCFs at this time. The CBI instead has proposed an initial targeted review, to be followed by a full review to coincide with the planned review of SEAR after three years i.e. in 2027.

3. Report on the Implementation of Recommendations following the 2024 Review (“the Implementation Report”) (here)

The Implementation Report details the CBI’s progress following the CBI’s acceptance of the Recommendations. The CBI states that it has made “significant progress” on the Recommendations, including in the areas of the F&P standards, governance, decision making, interviews and management information.

The Implementation Report also highlights advancements made by the CBI in areas which the 2024 Report deemed as being in critical need for improvement, namely, improved seniority and independence in the final decision-making part of the F&P process and the division of governance across different areas and directorates in the CBI. The Implementation Report notes that this has been achieved through a number of actions by the CBI, including:

• The establishment of a dedicated F&P Unit since 1 January 2025: this has brought greater operational efficiency and ownership to the F&P process.
• The creation of a Gatekeeping Decisions Committee (the “Committee”) as part of the F&P Unit: the Committee will not be involved in the decision-making process. However, it will oversee cases of potential refusal. The Committee will be chaired by the CBI’s Deputy Governor, Financial Regulation.
• F&P Unit shall host industry stakeholder engagements: the Recommendations include a need for more industry engagement by the CBI in relation to F&P. The Implementation Report notes that the F&P Unit will hold ad hoc engagements with sectors in relation to F&P as necessary and refers to a planned stakeholder meeting, which took place in Q2 2025. The CBI also continues to produce its annual Authorisations and Gatekeeping Report (the second edition of such report was previously covered in our briefings here and here).
• Third party complaints procedure: the CBI will apply a complaints procedure for F&P, with a third party enlisted to consider the complaints.
• CBI continues to publish materials and guides on the F&P process: this includes the proposed consolidation of the F&P Guidance and the release of CP160 and the Manual (defined below).

4. Manual on the F&P Gatekeeper Process (“the Manual”) (here)

The Manual is a key document for firms as it sets out the F&P application process in its entirety. It is advisable for firms to become familiar with the Manual as detail is provided on each stage of the F&P process, including interviews. The CBI also usefully includes two appendices; one with additional information for the assessment process related to credit unions and the other with the PCF role process set out in a chart format, allowing for ease of navigation through the process steps.

Some key takeaways from the Manual include:

• CBI expectations: the CBI sets out the level of engagement that regulated firms and proposed appointees can expect from the CBI related to the F&P process. This includes detail on the notification and length of interviews, process times and the availability of feedback. The CBI aims to review any IQ for completeness within five working days. Where an IQ is deemed to be incomplete, the CBI will return the IQ, noting what sections are incomplete, and a fresh IQ will need to be submitted.
• Online Portal: the CBI created an online portal (the “Portal”) to allow users to view and change specific institution details and to access and submit IQs. The Manual includes a guide on how to use the Portal including how to create a F&P profile on the Portal.
• Due diligence: the CBI expects firms to carry out their own due diligence checks on proposed PCF role holders prior to the submission of an IQ. A section is also included about the disclosure of matters that may/may not be relevant. The CBI states that if there is doubt about the relevance of a matter, this matter should be disclosed to the CBI and the CBI will decide whether it is relevant or not to the proposed PCF role holder’s F&P.
• Assessment: the CBI commits to conducting its F&P assessment in a risk based and proportionate manner. This approach will be applied on a case-by-case basis and will be tailored based on the nature, scale and complexity of the relevant sector.
• Interviews: the Manual states that an interview should not be viewed as a negative. Rather, it is a tool used by the CBI to obtain further information relevant to the F&P assessment. Interviews may be conducted for some roles more than others, and in some cases more than one interview may be required, which will be at the discretion of the CBI. The CBI will provide the entity and the proposed PCF role holder with at least five working days’ notice of the interview, including certain details related to the interview, such as information on the interview panel. In terms of the process following the interview, the CBI aims to send the minutes or other record of the interview to the firm and proposed PCF role holder within five working days of the interview. The interviewee then has another five working days to raise any inaccuracies in the minutes or other record.
• Withdrawal/refusal: the CBI states that withdrawals of IQs can happen for a number of reasons and feedback will be given even in cases of withdrawal. The CBI is committed to improving trust and growth in applicants and the provision of detailed feedback supports this. Furthermore, in cases where the CBI is minded to refuse the proposed PCF role holder’s F&P, the CBI will provide reasons for the refusal and opportunity will be given for responses to be made by the firm and the proposed PCF role holder. A proposed refusal will be referred to the Committee who will consider the matter and whether to refuse the application. Such refusal can be appealed to the Irish Financial Services Appeals Tribunal (IFSAT).

The Manual notes that if a proposed PCF role holder is refused approval of their appointment to the PCF role by the CBI, this does not automatically mean that person cannot be approved for that PCF role or another PCF role at a later date, as the reason for the refusal (e.g. not enough experience) may be one that can be rectified by the proposed PCF role holder. Equally, it should be noted that an approval for a PCF role does not guarantee approval for other PCF roles, whether that be in the same entity or another entity. Each assessment of a person’s F&P will be carried out by the CBI on a case-by-case basis and the CBI will seek to understand whether the person is fit and proper to carry out that specific PCF role in the relevant entity.

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, please contact us for further information as to how we can help.

Also contributed to by Ben Robertson