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Central Bank writes to firms over concerns on 'fitness and probity' of some senior managers

The Central Bank has observed a number of cases where individuals didn’t provide “material information” on their applications.
Apr 9th 2019, 6:30 AM 18,668 7

THE CENTRAL BANK of Ireland has written to the management at all financial services firms under its regulations to remind them of their legal obligations under the fitness and probity regime.

The letters come as the watchdog identified a number of incidents which should have been reported to it by financial institutions but were not. 

The regime – introduced in 2010 – is aimed at ensuring individuals who work in these firms meet the highest standard of competence, integrity and honesty.

There is evidence that some firms who identified concerns about an individual and took steps to address this, including suspension or dismissal, failed to report these concerns to the Central Bank, it said.

Furthermore, the Central Bank has also observed a number of cases where individuals have not provided “material information” on their applications to the Central Bank for approval to senior roles at these institutions.

“On occasion applicants have failed to disclose material facts which are either known to proposing firms, or would have been known if proper due diligence of their proposed candidates had been conducted,” it said.

In theory, under the fitness and probity regime, the Central Bank could refuse the appointment of a person to a senior role if its concerns over that individual have not been addressed. It can also remove people from roles they currently occupy.

In its letter to firms, the Central Bank says it expects these companies to review its fitness and probity policies, procedures and practices, and then be in a position to demonstrate how these concerns have been considered and acted upon. 

Its director general of financial conduct Derville Rowland commented: “The Fitness and Probity regime is central to our role as a gatekeeper for the financial system, ensuring that we can fully assess whether the most senior people working in the financial services industry are fit and proper.

This is critical to the protection of the public interest and to ensuring that there is public trust and confidence in the financial system.

“This responsibility does not end when staff are hired to a position; firms must ensure that staff are fit and proper on an ongoing basis. Staff must be competent, but must also act with integrity at all times,” she added.

Rowland also said she expects to see a “demonstrable change” in how firms and individuals engage with its fitness and probity process in future.

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Sean Murray


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