IRELAND Law and Practice Contributed by: Keith Robinson, Barry Tyrrell and Julia Mullin, Dillon Eustace LLP
• are financially sound. Before appointing an individual to a PCF, CBI approval must be obtained (or, in the case of significant institutions, the ECB). A person wish - ing to hold a position on the management board of a bank or wishing to become a key function holder in a bank must complete an individual questionnaire, including details of the applicant’s relevant qualifications and current and historic employment details, and submit it to the CBI. The CBI is also empowered to conduct inves - tigations of holders of CFs and PCFs and may impose suspension or prohibition orders depending on the result of such investigations. PCFs in banks include the board directors; the chief operating officer; the heads of control functions; and the heads of finance, retail sales, treasury, asset and liability management, credit; the head of market risk; the head of material business line; and the chief information officer. The assessment of the fitness and probity of the management board of banks applying for authorisation, and of members of the manage - ment board and key function holders of banks designated as significant institutions pursuant to the SSMR, is the responsibility of the ECB. As part of fitness and probity assessments, regard must be had to the revised Guidelines on the Assessment of the Suitability of Members of the Management Body and Key Function Hold - ers, jointly issued by the EBA and the European Securities and Markets Authority. On 9 March 2023, the Central Bank (Individual Accountability Framework) Act 2023 (the “IAF Act”), which underpins the Individual Account - ability Framework (“IAF”), was signed into law. The IAF Act amends the Central Bank Reform
Act 2010, the 2013 Act and the Central Bank Act 1942. The IAF comprises of four elements that impact the regulation applicable to holders of CFs and PCFs. They are as follows. • The senior executive accountability regime (the “SEAR”). • The incorporation of new conduct standards for all firms and their management. • Enhancements to the fitness and probity regime. • Updates to the CBI’s administrative sanctions procedure (the “ASP”). The primary purpose of the IAF Act is to improve the accountability of the Irish regulated firms, including banks. SEAR The purpose of the SEAR is to improve govern - ance, performance, and accountability in firms. It does this by placing obligations on firms and senior individuals within them to set out clearly where responsibility and decision-making lies and by identifying what those responsibilities entail. The SEAR will apply to all individuals per - forming a PCF role at “in-scope firms”, includ - ing credit institutions (excluding credit unions). The SEAR applied from 1 July 2024, except to (independent) non-executive directors who will be covered from 1 July 2025. The IAF introduced, by way of amendment to the Central Bank Reform Act 2010, a new duty of responsibility applicable to any PCF, at an “in- scope firm”, who has “inherent” or “prescribed” responsibility for any aspect of the affairs of the firm. This requires individuals to take “any steps that it is reasonable in the circumstances for the person to take” to avoid a contravention by their firm of its obligations under financial services legislation.
248 CHAMBERS.COM
Powered by FlippingBook