From 1 December 2012 the Regulations and Standards of Fitness
and Probity will apply to all staff in existing Controlled Function
("CFs") positions.
Under the Central Bank Reform Act 2010, the Central Bank was
provided with a range of powers regarding fitness and probity in
respect of persons in certain positions within the financial
services sector. This empowered the bank to set statutory
standards of fitness and probity across the financial services
sector, approve or veto the appointment of people to certain
positions, and investigate, remove or prohibit certain provision
holders.
The Regulations and Standards of Fitness and Probity ("the
Standards"), issued pursuant to the 2010 Act, prescribe 11
roles in financial institutions as Controlled Functions
("CFs") and 42 roles as Pre-Approval Controlled Functions
("PCFs"). The Standards require that individuals in
these roles meet with the Central Bank's Minimum Competency
Requirements in terms of qualifications, experience and competence.
Honest and ethical conduct, and financial soundness must also be
demonstrated by these individuals. Non-compliance with the
Standards can lead to prohibition and suspension notices for the
individuals concerned.
The Regulations came into operation on 1 December 2011 and the
Standards have been applied on a phased basis, initially to all
persons occupying PCF roles. On 1 March 2012, the Standards were
applied to persons newly appointed to CF. 1 December 2012 is
the final phase, whereby the Standards will apply to all persons
occupying CF roles.
HR practitioners and compliance departments should ensure that
identification and due diligence in respect of employees on the PCF
and CF registers are up to date, particularly where there has been
significant turnover or internal movement in the financial
institution.
Further reading on the Fitness and Probity regime is available
here:
Fitness and Probity in Financial Services
New Fitness and Probity regime
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
