New functions controlled before approval (PCF) planned by the Central Bank – Government, public sector


Ireland: New functions controlled by pre-approval (PCF) planned by the central bank

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The Central Bank of Ireland (“CBI”) has issued a Notice of Intent document which signals its intention to make a number of changes to the list of PCF roles. This latest Notice of Intent follows the publication last June of the Fitness and Integrity Interview Guide and the decision in October 2020 to introduce three new PCF roles (Chief Information Officer and two specific banking roles: Head of Material Business Line, and also Head of Market Risk).

We now briefly review the changes proposed by the CBI in its Notice of Intentdocument.

Branch managers outside Ireland (Irish regulated financial service providers)

The first proposed change concerns the role of PCF-16. This role currently concerns the “Branch manager of branches in other EEA countries”. The CBI proposes to extend the pre-approval requirement for the current role of PCF-16 to all branch managers of regulated financial service providers outside of Ireland (i.e. not only in EEA countries). Therefore, in practice, if implemented, this change would require persons who are branch managers in any jurisdiction of an authorized entity in Ireland to obtain the suitability and probity approval of the CBI.

Breakdown of the PCF 2 – INED role

The current role of PCF-2 relates to those performing the functions of “non-executive director”. CBI intends to split PCF-2 to reflect the distinction between non-executive directors (to become PCF-2A) and independent non-executive directors (to become PCF-2B). This proposed distinction appears to reflect the CBI’s view on the growing importance of the role played by INEDs in financial services firms.

Divide the role of PCF-15 – AML / CTF

The current role of the PCF-15 relates to the persons exercising the function of “responsible for compliance with the responsibility of anti-money laundering legislation and against the financing of terrorism”. According to the CBI, due to the growing importance of the role of those responsible for combating money laundering and the financing of terrorism, and the number of appointments of persons to exercise this role in its own right, it believes that it is necessary to replace the PCF-15 by a role dedicated to the fight against money laundering and the financing of terrorism. This newly designated role will be referred to as PCF-52, titled “Responsible for Combating Money Laundering and Terrorist Financing”.

Removal of PCF-31 – Head of Investments

Due to the duplication between PCF-30 (“Chief Investment Officer”) and PCF-31 (“Head of Investment”), the CBI proposes to abolish the role of PCF-31.

People in situ

For those people who are on site when the changes proposed by the CBI take effect, the CBI has judiciously clarified what action, if any, is required by the people / businesses that are affected. Companies will have 6 weeks to submit the in-situ confirmation to the CBI.

Timetable for implementing the proposed changes

While the CBI has not indicated the likely date on which this proposed set of changes will come into effect, our experience with the latest round of PCF changes is that it took approximately 7 months from the publication of the CBI notice of intent until such time as the proposed changes come into effect. A similar time frame may apply for the latest proposed changes.

Consultation period

The CBI has requested comments on this set of proposed changes. The consultation process ends on October 20, 2021.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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