CBI’s Dear CEO Letter for Investment firms: unregulated activities
August 2020The Central Bank of Ireland (‘CBI’) has outlined their expectations with respect of the offering of products and services considered to be outside the scope of regulation in their Dear CEO letter to the industry. There is a significant risk they say that clients may misunderstand the protections afforded to them when investing in unregulated products and firms must act “fairly, professionally and in the best interests of their clients at all times.”
The minimum requirements in this regard are:
- Communication of regulatory status of products/services at every stage of sales process to clients to aid transparency to avoid implying these are regulated where they are not
- Appropriate disclosures and risk warnings on all materials including for example that compensation schemes are not applicable due to being out of scope of regulation
Affected firms should ensure these requirements are communicated to their Boards and that necessary measures are taken to ensure controls and processes adhere to the CBI’s expectations.
Click HERE to see the CBI’s Dear CEO Letter in full.
By Judy de Castro - RegSol Consultant