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The Central Bank has today published regulations and guidance for firms who have to comply with the Individual Accountability Framework (IAF).

This is a set of rules governing the conduct of employees and executives in financial companies.

It follows a three month consultation process.

Derville Rowland, Deputy Governor of the Central Bank said: “As regulators, our approach to implementation of the framework will be founded on the principles of proportionality, predictability and reasonable expectations, underpinned by effective enforcement.”

Today’s guidelines cover the Senior Executive Accountability Framework (SEAR), the Conduct Standards and the Fitness & Probity Regime.

The changes to the Conduct Standards and Fitness & Probility Regime will apply from 29 December 2023.

Regulations on specific roles will apply from 1 July 2024 and for Independent Non-Executive Directors from 1 July, 2025. This is to allow for a transition period for board members to meet their obligations.

The changes include amendments to the Administrative Sanctions Procedure (ASP) which will allow the Central Bank to take enforcement action against individuals for breaches of their obligations, “rather than only for their participation in breaches committed by a firm.”

Under the Senior Accountability Regime, firms will have to set out clearly which senior executives are responsible for what decisions.

Under the Fitness & Probity Regime, firms will have to certify that individuals doing certain jobs are ‘fit and proper’ for those jobs.

And overall, the Common Conduct Standard will set “basic standards’ for honesty, integrity, due skill, care and diligence and acting ‘in the best interest of customers” which will apply to individuals in all regulated firms.

Senior executives will have ‘Additional Conduct Standards’ relating to the parts of the business in which they are involved.

Article Source – Central Bank publishes new accountability rules for financial companies – RTE

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