Central Bank of Ireland's consultation period on the IAF ends on 12 June
The new Central Bank (Individual Accountability Framework) Act 2023 will give the Central Bank of Ireland (CBI) new powers to hold individuals accountable for wilful acts of wrongdoing in the industry. Its intention is to bring Ireland in line with international norms, in particular with those in the UK, Australia, Denmark and the Netherlands.
Following enactment of the Central Bank (Individual Accountability Framework) Bill 2022 on 9 March, the Central Bank launched a three-month consultation on key aspects of the implementation of the Individual Accountability Framework (IAF), including the publication of draft regulations and guidance.
The draft regulations and guidance seek to provide clarity in terms of the Central Bank’s expectations for the implementation of three aspects of the framework: the Senior Executive Accountability Framework (SEAR), the Conduct Standards and certain aspects of the enhancements to the Fitness & Probity regime.
The IAF includes the following key elements:
- Senior Executive Accountability Regime (SEAR): This will require in-scope firms to set out clearly and fully where responsibility and decision-making lie within the firm’s senior management.
- Conduct Standards: Common Conduct Standards are basic standards such as acting with honesty and integrity, with due skill, care and diligence, and in the best interest of customers, and will apply to individuals in all regulated firms. Senior executives will also have Additional Conduct Standards related to running the part of the business for which they are responsible.
- Enhancements to the current Fitness & Probity (F&P) Regime: This will include clarifying firms’ obligations to proactively certify that individuals carrying out certain specified functions are fit and proper.
- Amendments to the Administrative Sanctions Procedure (ASP): A key change will be the Central Bank’s ability to take enforcement action under the ASP directly against individuals for breaches of their obligations rather than only for their participation in breaches committed by a firm.
- See the full IAF consultation paper, draft IAF regulations and guidance .
There are a number of key deadlines in respect of the IAF implementation timeline.
Key Deadlines Calendar
March 2023: The Central Bank plans to issue revised F&P Investigations Regulations and F&P Investigations Guidance
12 June 2023: The consultation period for CP153 closes
31 December 2023: Conduct standards start to apply
31 December 2023: F&P – certification and inclusion of holding companies to start to apply
1 July 2024: proposals in respect of the SEAR regulations to apply to in-scope firms