Irish Funds welcome the Central Bank of Ireland’s (CBI) heightened focus on enhanced governance through the Individual Accountability Framework (IAF) which was signed into law on 9 March 2023. In comprehensive responses to Consultation papers 153, Enhanced governance, performance, and accountability in financial services and 154, Consolidated Guidelines in respect of the Central Bank’s Administrative Sanctions Procedure, Irish Funds expresses support for the core principles of IAF, emphasizing its potential to bolster corporate culture, enhance individual accountability, mitigate risks, and fortify consumer protection.
In our responses to the consultations submitted earlier this year, we highlighted the following:
Implementation Timing: The commencement of the Common Conduct Standards, Additional Conduct Standards (Conduct Standards), and enhancements to the Fitness and Probity (F&P) regime, scheduled for December 31, 2023, raised legitimate timing concerns for the industry. Irish Funds contends that the current timeline doesn’t provide firms with a sufficient preparatory period to comprehensively meet their obligations by year-end. The publishing of the feedback statements on the two consultation papers later this year should help to alleviate the current ambiguity surrounding these proposed changes.
Proportionality: Irish Funds commends the introduction of a proportionality approach for low impact in-scope investment firms and third country branches. This approach entails a reduced set of Prescribed Responsibilities, based on the firm’s intrinsic nature, scale, and complexity. It mirrors the Senior Managers and Certification Regime (SMCR) in the United Kingdom, and Irish Funds urges the CBI to maintain this principle as the regime expands to various entities within the financial services sector.
Clarification and Guidance: We encourage the CBI to furnish fundamental principles and unequivocal guidance in a timely manner. This would enable individuals falling within the scope of IAF/SEAR to align themselves effectively with the prescribed rules. Such guidance is viewed as crucial for preparing Directors, Pre-Approval Controlled Functions (PCFs), and Control Function holders (CFs) to meet the expectations under the framework.

Balancing Power and Protection
Irish Funds acknowledges the paramount importance of robust investigative and enforcement mechanisms in deterring misconduct, fostering public trust, ensuring investor and consumer protection, and upholding market integrity. However, in the pursuit of these crucial objectives, Irish Funds underscores the equal significance of preserving the principles of independence, fairness, proportionality, and transparency within regulatory and supervisory regimes. These principles not only attract financial services firms to Ireland but also cultivate an environment that attracts and retains talent within the industry.

Irish Funds raises concerns about the current envisaged operation of the amended Administrative Sanctions Procedure (ASP), emphasizing the imperative recognition of individuals’ natural and constitutional rights to due process and fair procedures. Of particular concern is the potential divergence between the interests of individuals and those of regulated financial service providers. The forthcoming additional powers for the CBI carry significant weight, necessitating a careful equilibrium between these powers and the safeguarding of individuals’ constitutional rights.

Conclusion
As of early October 2023, Irish Funds eagerly awaits the Central Bank’s feedback statement on CP153. Additionally, we expect a response to CP154 on the Enhancements to the Central Bank’s Administrative Sanctions Procedure in December 2023. Collaborating with the Institute of Bankers, Irish Funds is developing a comprehensive training program for professionals falling under the scope of IAF and SEAR, set to commence on October 25, 2023. An implementation path where expectations are clear, appropriately timed and proportionate will enable firms to comply effectively and further enhance Ireland’s reputation as a centre of excellence for funds and asset management.