Executive Summary
On 27 September 2019, the Central Bank of Ireland ("CBI") published details of a prohibition notice issued to an individual pursuant to the Fitness and Probity regime (the "Prohibition"). The CBI issued the Prohibition following its determination that the individual provided false or misleading information to the CBI during their pre-approval control function ("PCF") application. The Prohibition restricts the individual from performing any control function within an Irish regulated financial services provider ("RFSP") for a period of two years.
Background
The Fitness and Probity regime requires individuals performing control functions in RFSPs to meet the CBI's Fitness and Probity Standards. Applicants for PCF roles (e.g. directors and other senior roles) must submit an individual questionnaire ("IQ") and receive CBI approval before commencing their position.
Prohibition Notice
The individual obtained PCF authorisation from the CBI. However, in their IQ and subsequent responses to CBI queries, the individual provided inaccurate information and ultimately the CBI determined, per the Prohibition notice, that the individual:
"provided information which he knew or ought to have known was false and misleading".
The Prohibition notice further states:
"Honesty and integrity are explicit requirements for those seeking regulatory approval. This encompasses the fundamental requirement of truthfulness in an application for approval. The Central Bank is entitled to expect and insist on absolute candour and honesty and otherwise will not be in a position to fulfil the crucial gatekeeping function which is expected of it in its role of protecting both consumers and the financial system. An applicant for approval, seeking both the advantages and responsibilities for approval, must be taken to understand the unambiguous requirement for truthfulness, and candid and accurate information."
The CBI states the rationale for the Prohibition as being twofold. Firstly to demonstrate to the individual the seriousness of the infraction and to deter them from future similar behaviour; and secondly to demonstrate the gravity of providing false and/or misleading information to the CBI to other RFSPs, individuals performing and applicants for PCF roles, and the financial services industry as a whole.
It is also useful to note the CBI's determination of certain proposed mitigating factors put forward on behalf of the individual. Amongst other points, the CBI rejected the argument that the individual's cooperation with the CBI's investigation constituted a mitigating factor, noting that cooperation with the CBI is an expectation of a PCF.
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