The Deputy will appreciate that it would not be appropriate for me or for the Central Bank to comment on the Bank's engagement with individual firms.
By way of providing context, however, I would say that the authorisation or “gatekeeper” process is an important part of how the Central Bank regulates financial services providers and works to protect consumers and investors. Through this process, the Central Bank ensures that only firms who demonstrate that they meet the standards required by European and domestic legislation, and the Central Bank’s rules and regulations, can provide financial products and services to consumers and investors.
A firm proposing to provide advice on mortgage protection and home insurance must first be registered as an insurance intermediary under the European Union (Insurance Distribution) Regulations 2018 (IDR).
A firm seeking registration under the IDR is required to complete the relevant application form available on the retail intermediary authorisation process section of the Central Bank website (Link 1 below) i.e. either the A FORM or B FORM depending on the nature, scale and complexity of their proposed activities (small low risk firms would generally meet the prescribed criteria set out in the A FORM to complete that form).
Each applicant seeking registration under the IDR must satisfy the Central Bank that it can meet the relevant authorisation standards (regardless of their size) and key persons proposed to hold Pre-Approval Controlled Function (PCF) roles within the applicant must satisfy the Central Bank that they meet the Fitness and Probity Standards. In fulfilling its statutory role in this regard, the Central Bank adopts a robust, structured and risk-based process that seeks to ensure that only those applicants that demonstrate compliance with the relevant authorisation and fitness and probity standards are registered. The Central Bank seeks to process each application as expeditiously as possible while meeting its obligation to operate a rigorous and effective gatekeeper function.
While an applicant seeking registration under the IDR may hold another authorisation from the Central Bank, its application for registration must be assessed having regard to the relevant authorisation standards applicable in the context of the IDR, and the Central Bank must be satisfied as to the fitness and probity of proposed PCF role holders at the time of the new application.
Under the Fitness and Probity regime introduced by the Central Bank under the Central Bank Reform Act 2010, all individuals must be pre-approved by the Central Bank prior to taking up a new PCF role. This includes any individuals who have previously been approved. Any authorised firms seeking to do business under a new sector must apply for authorisation under that sector and any individuals intending to take up a PCF role under that new authorisation are also required to seek approval from the Central Bank before commencing the role.
The Fitness & Probity regime is a key part of the Central Bank’s gatekeeping process and protects consumers and investors by requiring that persons in senior functions within regulated firms meet the Central Bank’s Fitness & Probity Standards. As part of its assessment, the Central Bank may hold one or more interviews with a PCF role holder applicant, where the Central Bank considers it necessary to assist in its assessment. In respect of low risk firms, while interviews are not generally carried out as standard practice, they are carried out where specific fitness and probity concerns arise and/or on a sample basis. The Fitness & Probity Interview Guide, which is available on the Central Bank’s website (Link 2 below) provides an overview of the fitness and probity interview process to assist PCF role holder applicants who are invited to attend for interview.
All PCF applications undergo a desk assessment and the Bank may seek National Vetting Bureau clearance, employer references, external regulator references. In addition applicants may be invited for an interview to support the assessment.
The Minimum Competency Code 2017 (MCC) and the Minimum Competency Regulations 2017 (MCR) set out minimum professional standards, competencies and obligations for persons providing certain financial services, in particular when dealing with consumers. The aim is to ensure that consumers obtain a minimum acceptable level of competence from individuals acting for or on behalf of regulated firms in the provision of advice and other associated activities in relation to retail financial products. Individuals falling within the scope of the MCC must meet the requirements (e.g. hold a recognised qualification) in respect of each type of retail financial product for which they will provide advice on or offer.
Link 1: (www.centralbank.ie/regulation/industry-market-sectors/brokers-retail-intermediaries/authorisation-process)
Link 2: (www.centralbank.ie/docs/default-source/regulation/how-we-regulate/fitness-probity/fitness-and-probity-interview-guide.pdf)
