New Pre-Approval Controlled Functions (PCFs) Planned by the Central Bank
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The Central Bank of Ireland (“CBI”) has published a Notice of Intention document which signals its intention to make a number of amendments to the list of PCF roles. This latest Notice of Intention follows on from the publication last June of the Fitness and Probity Interview Guide and the decision in October 2020 to introduce three new PCFs roles (Chief Information Officer and two banking specific roles: Head of Material Business Line, and also Head of Market Risk).
We now briefly consider the changes that are being proposed by the CBI in its current Notice of Intention document.
Branch managers of branches outside Ireland (of Irish Regulated Financial Service Providers)
The first proposed change relates to the PCF-16 role. This role currently relates to “Branch Manager of branches in other EEA countries”. The CBI is proposing to extend the pre-approval requirement for the existing PCF-16 role to all branch managers of regulated financial services providers outside Ireland (i.e. not just in EEA countries). Therefore in practice, if implemented this change would result in persons who are Branch Managers in any jurisdiction of an entity that is authorised in Ireland being required to secure fitness and probity approval from the CBI.
Splitting of PCF 2 Role - INEDs
The existing PCF-2 role relates to persons serving as a “Non-Executive Director”. CBI intends to split PCF-2 to reflect the distinction between Non-Executive Directors (to become PCF-2A) and Independent Non-Executive Directors (to become PCF-2B). This proposed distinction seems to reflect the CBI’s view of the increasing importance of the role played by INEDs in financial services firms.
Splitting the PCF-15 Role – AML/CTF
The existing PCF-15 role relates to persons serving as “Head of Compliance with responsibility for Anti-Money Laundering and Counter Terrorist Financing Legislation”. According to the CBI, due to the increasing importance of the role of individuals with responsibility for Anti-Money Laundering and Counter Terrorist Financing, and the number of appointments of individuals to carry out this role in its own right, it believes that it is necessary to replace PCF-15 with a dedicated role for Anti-Money Laundering and Counter Terrorist Financing. This newly designated role will be referred to as a PCF-52, entitled “Head of Anti-Money Laundering and Counter Terrorist Financing”.
Removal of PCF-31 – Head of Investment
Owing to the duplication between PCF-30 (“Chief Investment Officer”) and PCF-31 (“Head of Investment”), the CBI is proposing to remove the PCF-31 role.
For persons who are in-situ when the changes proposed by CBI come into effect, helpfully the CBI has spelled out what action if any is required by those persons/firms which are affected. Firms will have a period of 6 weeks within which they must submit the in-situ confirmation to the CBI.
Timeframe for Implementation of Proposed Changes
While the CBI has not indicated the likely date upon which this proposed series of changes will take effect, our experience of the last round of PCF changes was that it took approximately 7 months from the publication of the CBI’s notice of intention up until the time that the proposed changes became effective. It may be that a similar timeframe might apply to the latest changes that are being proposed.
The CBI has invited comments on this series of proposed changes. The consultation process closes on 20 October 2021.