On 22 September 2021, the Central Bank published a notice of intention to amend the Pre-Approval Controlled Functions (PCF) list by bringing managers of branches Irish regulated financial services providers (RFSPs) in non-EEA countries into scope, creating a stand-alone PCF for independent non-executive directors, introducing a PCF for a dedicated Head of Anti-Money Laundering and Counter-Terrorist Financing role, and removing the Head of Investment PCF.

SUMMARY

The Central Bank’s proposals will:

  • Expand PCF-16 (Branch Manager of branches in other EEA countries) to include branch managers in non-EEA countries;
  • Introduce stand-alone PCFs in respect of:
    • Independent Non-Executive Directors (“INEDs”) (which will now be a separate PCF to the general Non-Executive Director PCF);
    • The Head of Anti-Money Laundering and Counter-Terrorist Financing (“AML/CFT”) (where that function isn’t being performed as part of the broader Head of Compliance role); and
  • Remove PCF-31 (Head of Investment) (on the basis that it is already covered by PCF-30 (Chief Investment Officer)).

The changes will be introduced by way of amendment to the Central Bank Reform Act 2010 (Sections 20 and 22) Regulations 2011, which designate PCFs (and controlled functions). The Central Bank considers the amendments to be warranted based on its supervisory experience and in view of the changing structure of, and landscape surrounding, the Irish financial services industry.

SCOPE

With the exception of the removal of PCF-31 (which is only relevant to investment firms), the proposed amendments to the PCF list will apply to all Irish RFSPs other than credit unions.

The Central Bank has advised that the PCFs in situ on the date that the amended regulations come into effect will not need to seek the approval of the Central Bank to continue to perform the amended PCF roles. However, boards of RFSPs will be required to review the fitness and probity assessments conducted under Section 21 of the Central Bank Reform Act 2010 in respect of those in situ PCFs and submit confirmation of those assessments to the Central Bank.  Those assessments and confirmations must take place within six weeks of the amended regulations taking effect. The full PCF application process will apply to any new appointment to the expanded or new PCFs after the amended regulations come into effect.

The latest briefing from our Financial Regulation Group sets out more detail on the Central Bank's proposals, which close for feedback on 20 October 2021.