Following last week’s commencement of key sections of the Central Bank (Individual Accountability Framework) Act 2023 (read our insights here), the Central Bank has published updated regulations and guidance for its fitness and probity (F&P) regime. 

As expected, the new regulations and guidance apply immediately, and are not subject to consultation on the basis that they reflect changes required by the new 2023 Act.  The updates relate to the following:

Investigations

• Allowing the Central Bank to investigate a person who formerly performed a controlled function (CF) role if they performed the role within the shorter period of (a) 19 April 2023 and the commencement of the investigation, and (b) the 6 year period leading up to the commencement of the investigation.
• A new statutory procedure for giving notice of investigations.
• Amending the statutory procedure for investigation reports to provide for the preparation and service of a draft report followed by a final report.
• Allowing the Central Bank to discontinue an investigation for reasons to be set out in a notice.
• Introducing provisions designed to ensure the independence of an investigation and associated decision-making procedures.  For example, the person who (after 19 April 2023) forms the opinion necessary to commence an investigation cannot be involved in the investigation itself if that would affect the investigation’s independence.

Suspension Notices 

• Increasing the limit for the initial duration of a Central Bank suspension notice from 3 months to 6 months.
• Allowing for suspension notices confirmed by the Central Bank to be appealed to the Irish Financial Services Appeals Tribunal.
• Increasing the period for which the High Court may extend a suspension notice from 3 months to 6 months (and allowing the Central Bank to apply to further extend the suspension notice).

Prohibition Notices

• Changing when prohibition notices take effect – they will now take effect when confirmed by the High Court or agreed in writing, instead of when they are served.
• Allowing the Central Bank, or a person who is subject to a confirmed prohibition order, to apply to the High Court for an order varying or revoking that prohibition notice.

Holding Companies 

• The extension of the F&P regime to certain holding companies (regulations to give effect to that form part of the Central Bank’s ongoing consultation on the individual accountability framework, and are expected to come into force at the end of this year).

The above changes form part of a suite of recent changes to the Central Bank’s F&P regime, including the change to the process for submitting individual questionnaires (from the Online Reporting System to the Central Bank Portal), and recent regulations allowing the Central Bank to serve F&P-related notices electronically.

Regulations: 

Central Bank Reform Act 2010 (Procedures Governing the Conduct of Investigations) Regulations 2023

Guidance:

Fitness and Probity – Individual Questionnaire, Applications and PCF Roles: Guidance (April 2023)

Fitness and Probity – Investigations, Suspensions and Prohibitions: Guide to Transitional Arrangements arising from the Central Bank (Individual Accountability Framework) Act 2023 (April 2023)

Fitness and Probity – Investigations, Suspensions and Prohibitions: Guidance (April 2023)

For more information on how our experienced multi-disciplinary Individual Accountability and SEAR Group can help you navigate the Individual Accountability Framework, go to www.arthurcox.com/iaf.

https://www.centralbank.ie/docs/default-source/regulation/how-we-regulate/fitness-probity/enforcement/industry-letter-of-21-april-2023—updated-f-p-enforcement-procedures.pdf?sfvrsn=3b99991d_4