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Central Bank and Controlled Functions
PRACTICE AREA GROUP: Financial Institutions
The Central Bank has issued a reminder of the requirement to comply with due diligence provisions regarding certain positions in regulated entities by 31 March 2012.
Regulated entities are required to confirm compliance in relation to all persons carrying out Pre-Approval Controlled Functions (PCFs) who were doing so as at 1 December 2011.
To assist the process, the Bank has published Guidance - In Situ Pre-Approval Controlled Functions: Confirmation of Due Diligence undertaken
The Central Bank Reform Act 2010 provides the Central Bank with a range of powers regarding fitness and probity for persons in certain positions within the financial services sector. The Bank is empowered to:
- approve or veto the appointment of people to certain positions
- investigate and where appropriate remove or prohibit certain provisions holders; and
- set statutory standards of fitness and probity across the financial services sector.
Persons in “pre-approval controlled functions” (PCFs) will require Central Bank approval before they can take these senior positions. The Regulations also prescribe specific categories of staff as “controlled functions” (CFs) which are positions from which individuals can be temporarily or permanently removed or prohibited.
The new requirements are being introduced on a phased basis. From 1 December 2011 existing and new staff in PCFs will be subject to the regulations and standards. Firms are required to notify the Central Bank of each individual in the organisation in a PCF by 31 December 2011. From 1 March 2012 new appointments to less senior positions (CFs) will be subject to the Regulations and standards. From 1 December 2012 the Regulations and Standards will apply to all staff and existing CFs.