Individual Accountability Framework: Bill finalised
We now know the final shape of the Central Bank (Individual Accountability Framework) Bill, following completion of Report Stage in Seanad Éireann on 22 February 2023.
The Bill is substantially in the same form as when it was first published on 28 July 2022, save for some minor Government-led amendments made at Committee Stage in both Dáil Éireann and Seanad Éireann.
For detailed analysis of the Bill as original published, read our previous update here.
As outlined in our insights following Committee Stage in Dáil Éireann in December 2022 (here and here), the changes made at that stage were minor/for clarification purposes, and also to reflect the role of the European Central Bank in carrying out ‘fit and proper’ assessments in respect of those holding senior roles in banks treated as ‘significant’ for the purposes of the Single Supervisory Mechanism.
As outlined in our insights following Committee Stage in Seanad Éireann earlier this month (here), the one set of amendments made at that stage was designed to clarify that the changes made by the Bill to the Central Bank Act 1942 as regards inquiry decisions apply not just to an inquiry decision made after the commencement of Section 53 of the Bill, but also to an inquiry decision made before the commencement of Section 53 if that decision has not been notified by the Central Bank to the regulated financial service provider or person concerned before Section 53 is commenced. According to the Minister of State with responsibility for Financial Services, Credit Unions and Insurance, those amendments were to ensure that “…the changes necessitated by the Zalewski judgment in regard to the appeal and court confirmation of inquiry decisions take effect at the earliest practicable opportunity.”
We expect the Bill to be sent to the President promptly for signature, and the Central Bank is likely to issue its consultations on draft regulations and guidance shortly.
In terms of next steps, we suggest that regulated firms:
- get in touch with any member of our market-leading team to discuss how best to manage the potential impact of the individual accountability framework on your business;
- assemble your internal team who will work on implementing the new framework within your organisation (noting that your HR, legal and compliance teams will each be key to the implementation process);
- brief your internal stakeholders on the latest developments, and let them know the likely timeframe for next steps;
- ensure that you have collated your existing relevant raw materials (such as maps of reporting lines, reporting structures, job descriptions, template offer letters, and governance policies and procedures) to help you identify potential gaps/areas for improvements;
- consider how best to run your initial phase of training for your existing teams, and how that training will be refreshed for new joiners;
- assess how the individuals within your firm can best be supported in complying with the individual accountability framework – this will include, for instance, having strong systems in place to deal with matters such as the delegation or sharing of functions;
- review the Central Bank consultations closely when they are published, as these will contain a significant volume of practical detail, and consider responding to those consultations on points which are of particular relevance to your organisation.
Our Financial Regulation: Individual Accountability and SEAR team offers practical help to clients as they implement the new regime for their organisations including advising on the preparation of management responsibility maps and statements of responsibility, guidance and training on the proposed new conduct standards for individuals and for firms, and navigation of the new fitness and probity certification process.
We provide advice to executives and other employees on the new ‘duty of responsibility’ and on the new conduct standards. We also advise and support clients on a wide range of financial regulatory investigations and enforcement issues, and have deep specialist knowledge of the financial services regulatory environment and experience in managing complex contentious regulatory matters.