Asset Management & Investment Funds Q&A - Apr 2020

Question

How should Regulated Financial Service Providers (RFSPs) manage Pre-approval Controlled Function (PCF) vacancies in the context of the challenges presented by the COVID-19 pandemic?

Answer

If a PCF role holder is unable to perform their role due to illness or if a RFSP cannot fill a permanent PCF role vacancy due to COVID-19, the RFSP can seek to have a suitable individual perform that role for a limited period. This requires prior agreement of the Central Bank of Ireland (CBI) under Regulation 11 of the Central Bank Reform Act, 2010 (Sections 20 and 22) Regulations, 2011.

The steps that the RFSP must take are as follows:

  • The RFSP should refer to its succession and contingency plan in the first instance and identify a suitable individual to perform the PCF role which has become temporarily vacant
  • The RFSP should contact the CBI to state that they wish to make a temporary appointment. RFSPs should:
    • outline the circumstances that have given rise to the need for the temporary appointment
    • confirm that the RFSP is satisfied on reasonable grounds that the temporary appointee complies with the Fitness and Probity (F&P) Standards. In providing this confirmation, the RFSP should consider time commitments and other roles that the proposed temporary appointee may already be performing 
    • provide confirmation that the person has agreed to abide by the F&P Standards and will continue to do so whilst performing the PCF role 
    • outline the period of time for which the appointment is requested (which should normally not extend past three months)
  • No individual questionnaire must be submitted in respect of an application for the appointment of a temporary officer
  • If the CBI agrees to the request in light of the exceptional circumstances, it will issue a letter to the RFSP regarding the appointment
  • The RFSP should keep the situation under review and inform the CBI of any changes in respect of the appointment

Other PCF vacancies

An RFSP may not appoint a person to perform a PCF role on an ongoing basis unless the CBI has approved the appointment in accordance with its pre-approval process. The CBI expects that firms will continue to comply with their F&P statutory obligations and ensure that individuals performing Controlled Function, including PCF, roles comply with the F&P Standards

PCF interviews

The use of interviews is one tool the CBI Bank may employ as part of the approval process. In light of COVID-19, alternative means to existing interview formats such as video conferencing and phone interviews are being explored. It is expected that assessments will continue using all tools necessary.

For more information in relation to this topic please contact your usual contact on the A&L Goodbody Asset Management & Investment Funds team.

Date published: 6 May 2020