On 1 February 2023, the Central Bank (Individual Accountability Framework) Bill 2022 (the "Bill") was passed by Dáil Eireann.
The Bill aims to support the advancement of an improved culture in the Irish financial system through greater accountability in the regulated sector by introducing an Individual Accountability Framework ("IAF"). The four key pillars of the IAF proposal include conduct standards for firms and the individuals working within them; a Senior Executive Accountability Regime (“SEAR”); enhancements to the current Fitness and Probity Regime; and a unified enforcement process.
The Minister for Finance, Michael McGrath (the "Minister"), noted that the previous, Minister for Finance, Pascal Donohoe, brought forward a number of amendments to the Bill at Committee Stage which "addressed the concerns of the European Central Bank to ensure there is clarity as to its exclusive prerogative in the supervision of significant supervised banking entities and made other improvements in how the Bill will operate". He clarified that these amendments "did not represent any substantive change in the policy objectives of the Bill".
Some technical amendments were also made to the Bill at report stage to take account of some typographical errors in the text.
The Bill now moves to the Seanad for consideration.
Once the Bill is enacted, the Central Bank intends to publish the relevant draft regulations and supporting guidance along with a consultation paper. These are expected to be published throughout 2023. Accordingly, it is expected that both the SEAR and the Conduct Standards will be commenced in February 2024, after the Central Bank Regulations and Guidance have been finalised. The Central Bank has previously indicated there will not be a long implementation period following the publication of the final regulations and guidelines as, in its view, firms will have had a good lead in time to consider the proposals and to prepare accordingly.
The Minister noted that the Central Bank's consultation process presents "an important opportunity for all industry participants to engage with the bank on the detail of how the new regime will operate" and he strongly encouraged everyone concerned to "engage constructively with this consultation process".