“Dear CEO letter” on Fitness and ProbityDecember 2020
A recent Central Bank review has found weaknesses regarding compliance with the Fitness and Probity regime (F&P Regime).
The F&P regime was introduced under the Central Bank Reform Act 2010. The regime protects consumers by requiring that persons who occupy senior functions within regulated firms meet the Central Bank of Ireland’s Fitness and Probity Standards. Under these standards people in senior positions are required to be competent and capable, ethical, act with integrity and be financially sound.
Some of the issues discovered include:
- Level of awareness by Board members of their fitness and probity obligations was poor
- Lack of due diligence being conducted regarding the outsourcing of Pre-Approval Controlled Functions/Controlled Functions
- Lack of registers being kept of employees performing PCF or CF roles.
Deputy Governor Ed Sibley said: “The F&P Regime is a cornerstone of the regulatory framework in Ireland. The Central Bank will not authorise firms, and will not approve persons to perform senior functions in regulated firms, where they do not meet our Fitness and Probity Standards and further noted “It is wholly unacceptable that such shortcomings continue to exist in circumstances where the F&P Regime was introduced almost ten years ago. The Central Bank will continue to engage with firms to assess the robustness of their application of the F&P Regime and will initiate necessary supervisory responses to any weaknesses identified.”
For the full text of the CBI press release (which has a link to the Dear CEO letter) – see below: Central Bank inspection finds weaknesses in firms’ compliance with Fitness & Probity Regime
By Judy de Castro