07/09/2026
Insights Blog

On Tuesday 1 September, the Central Bank of Ireland (CBI) published the outcome of its Thematic Assessment: Implementation of Key Aspects of the Fitness and Probity Regime (F&P) in the MiFID Investment Firm Sector (the Assessment).

The F&P Regime is a cornerstone of the regulatory framework and requires regulated firms to ensure that individuals in key and customer-facing positions comply with the F&P standards issued by the CBI, i.e. these individuals must be competent and capable, act with honesty and integrity, and be financially sound. In this regard, firms have an obligation to undertake due diligence on these persons, both prior to appointment and on an on-going basis thereafter. The Individual Accountability Framework (the IAF) enhanced the F&P regime, including with the introduction of the Senior Executive Accountability Regime (SEAR). Whilst the F&P regime addresses the suitability of individuals to fulfil relevant roles, SEAR focuses on their responsibilities when performing those roles[1]. Finally, the regulatory regime also comprises the requirements of the Minimum Competency Code 2017 (the MCC). The MCC sets out certain minimum competencies that persons falling within its scope must comply with when performing certain controlled functions, as well minimum professional standards for persons providing certain financial services.

The CBI’s thematic assessment was undertaken to assess the implementation of key aspects of the F&P regime in the MiFID Investment Firm sector, including a focus on steps taken by firms to embed the IAF requirements into their governance framework. More specifically, the objective of the thematic assessment was to evaluate firms’ approaches to:

  • policies and procedures in respect of the F&P regime
  • due diligence and annual certification documentation to ensure the ongoing F&P of individuals appointed to Pre-Approved Controlled Function (PCF) and Controlled Function (CF) roles
  • measures undertaken following the introduction of the IAF, including a review of Statements of Responsibilities (SOR) and Management Responsibility Maps (MRM)
  • records demonstrating compliance with the MCC

Findings

While many firms had detailed F&P policies and procedures in place that were implemented effectively, the CBI identified a cohort of firms that did not effectively apply these requirements in practice, particularly in relation to due diligence at onboarding and annual certification. The majority of firms have taken effective steps to embed the IAF into their business, and had a good standard of MRM and SOR. There were no significant adverse findings on MCC compliance.

The notable practices identified by the CBI are outlined below, along with the CBI’s expectations for MiFID Investment Firms. A recurring theme is that firms must be able to demonstrate active ownership of the F&P process: carrying out the relevant assessment is not sufficient unless the firm can also evidence it through robust documentation and record keeping.

Good Practices

  • firms able to demonstrate that they had considered the outputs of the annual certification process
  • firms issuing PCF role holders with a compliance certificate in respect of the F&P standards
  • firms undertaking annual reviews of their continuous professional development records
  • firms developing a “Reasonable Steps Framework” to assist employees in understanding their roles and responsibilities
  • firms’ Compliance Functions attesting on a quarterly basis to the fact that the MRM is up-to-date

Areas for improvement

  • deficiencies in onboarding and annual certification processes, including insufficient evidence of due diligence and gaps in supporting documentation;
  • policies and procedures that lacked adequate detail on how F&P obligations would be implemented in practice;
  • further work required by some firms to fully embed the IAF within their governance frameworks;
  • insufficient tailoring of IAF policies to the firm’s specific business model and governance arrangements;
  • MRMs that did not meet prescribed standards, including unclear reporting lines and incomplete allocation of responsibilities; and
  • an instance of shared responsibilities in SORs that was not aligned with the CBI’s IAF guidance.

Next Steps

All firms should review their arrangements, practices, policies and procedures against the findings and feedback outlined in the Assessment.

The CBI has asked that firms prioritise the following areas for review:

  • Policies and Procedures: review, update and embed F&P policies and procedures so they are sufficiently detailed, current, reflect the firm’s specific business model, and are implemented in practice
  • Due Diligence and Annual Certification: strengthen due diligence and annual certification processes, with comprehensive documentation and evidence retention, applied via formal, consistent processes
  • IAF: ensure full, tailored embedding of the IAF within the firm’s governance framework, with training provided to relevant staff
  • SEAR: verify that all Prescribed Responsibilities and any Other Responsibilities are properly allocated, and ensure MRMs and SORs are current and comprehensive

Please get in touch with our market-leading Financial Regulation and Financial Regulation: Investigation and Enforcement groups for practical guidance on your F&P queries.

[1] MiFID Investment Firms are in-scope of SEAR where they underwrite on a firm commitment basis and/or deal on own account and/or are authorised to hold client assets.