RegSol Blog

Central Bank of Ireland: Updates to Fitness and Probity Enforcement Procedures

November 2023

On 21st April 2023, the Central Bank of Ireland (CBI) published an industry letter notifying firms of the updated procedures for fitness and probity investigations, suspensions and prohibitions. The updated procedures apply from 20th April 2023.

Part 3 of the Central Bank Reform Act 2010 has been amended by the Central Bank (Individual Accountability Framework) Act 2023. The amendments, which were commenced by order on 19th April 2023 are summarised below:
  1. Investigation of individuals who formerly performed CF roles: the CBI can now investigate a former controlled function (CF) role holder, provided that they performed the role within the shorter of the following periods: (a) the period since 19th April 22023 and (b) the 6 years before the date on which an investigation is commenced.

  2. Commencement of investigation: a new statutory procedure has been introduced for giving notice of investigations.

  3. Suspension: the limit for the initial duration of a suspension notice has increased from 3 months to 6 months. Suspension notices may now be appealed to the Irish Financial Services Appeals Tribunal. The period for which the High Court may extend a suspension notice has increased from 3 months to 6 months. The CBI may make subsequent applications to the High Court to further extend the suspension notice.

  4. Investigation report: the statutory procedure for investigation reports has been changed to provide for the preparation and service of a draft report followed by a final report.

  5. Discontinuing an investigation: the CBI may discontinue an investigation for reasons to be stated in a notice.

  6. Prohibition Notices: will now only take effect when confirmed by the High Court or agreed in writing.

  7. Varying/revoking prohibition: a new procedure allowing the CBI or the subject to apply to the High Court for an order varying or revoking a prohibition notice.

  8. Regime extended to certain holding companies: the fitness and probity regime (upon CBI issuing regulations) apply to individuals performing certain CF roles in holding companies of certain regulated firms.

  9. Enhanced independence requirements: certain requirements have been introduced to ensure the independence of an investigation and associated decision-making procedures.
The amendments to Part 3 of the 2010 Act have necessitated changes to regulations and guidance. The updated regulations and guidance are:

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

Fitness and Probity Investigations, Suspensions and Prohibitions: Guidance 2023

More information can be found at: Investigations and Enforcement