Presentation on Fitness & Probity and Minimum Competency Codes - Anne Moylan and Deirdre Norris, Central Bank of Ireland - Hays
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Presentation on Fitness & Probity and Minimum Competency Codes Anne Moylan and Deirdre Norris, Central Bank of Ireland December 2012
Contents • Fitness & Probity Regime. • Minimum Competency Code. • Submission of the online Individual Questionnaire (IQ) to take up a PCF (Pre approval controlled function) role.
FITNESS AND PROBITY
Regulations In-Situ
New Online
confirmation
Standards and Individual
of Due
Guidance Questionnaire
DiligenceREGULATIONS, STANDARDS AND GUIDANCE
Regulations Standards Guidance
• Define Pre- • A PCF / CF is • Good Practice on
Approval Control required to be: how to comply
Function (PCF) • Competent and
and Controlled Capable
Function (CF • Honest, Ethical
and to act with
Integrity
• Financially
SoundKey Dates for PCFs and CFs
1 December 2011 Commencement of Regulations
Commencement of Standards for new and existing PCFs only
31 December 2011 RFSPs to provide a list of PCFs to the Central Bank
1 March 2012 Commencement of Standards for new CFs (to include new
offers of employment and internal transfers/promotions
which may involve a CF role) after that date.
31 March 2012 Due Diligence for in situ PCFs to be complete and
Section 21 Confirmation submitted to CBI.
1 December 2012 Commencement of Standards for all existing CFs. Due
Diligence for CFs to be completed by RFSPs and records to be
maintained.
5Who does Fitness & Probity apply to? PCF – Pre Approval Control Functions • PCF1-8 : Member of a Board / Committee / CEO • PCF9-10 : Member of a Partnership / Sole Trader (FSP) • PCF11-17: Senior Management Positions (Core - FSP) • PCF18-40: Senior Management Positions (Industry specific - FSP) • PCF41: Non-EEA Firm - branches in the State CF – Control Functions • CF1 : Significant Influence function • CF2 : Compliance function • CF3-9: Customer facing function • CF10-11: Dealing in property function
Fitness and Probity Standards (1)
Conduct to be competent and capable
• Professional or other Qualifications
• Training and/or Experience
• Proficiency through performance of previous functions
• Comprehensive understanding of the regulatory and legal environment
• No personal conflicts of interest
• Concurrent Responsibilities do not impair ability to perform
• Compliant with Minimum Competency Code, where applicable
Conduct to be honest, ethical and to act with integrity
• Refused, prohibited, restricted or suspended licence
• Subject of complaint to Central Bank, Financial Services Ombudsman or equivalent body
• Dismissed or asked to resign and did resign from any profession
• Been director of a company struck off the register of companies on involuntary basis
• Been convicted of an offence relevant to persons ability to perform the relevant function
7Fitness and Probity Standards (2)
Financial Soundness
• Person has defaulted upon payment due arising from a compromise or scheme of
arrangement with creditors
• Person is subject to a judgement debt which is unsatisfied, either in whole or part
• Person is or has been the subject of bankruptcy petition
• Person has been adjudicated a bankrupt and the bankruptcy is undischarged
• Person was a director of an entity which has been the subject of insolvency
Continuing obligation
• A regulated financial service provider (RFSP) shall not permit a person to before a CF unless:
• RFSP is satisfied that the person complies with the code
• The person has agreed to abide by the standards
8Non Statutory Guidance
Fitness Due Diligence
• Evidence of qualifications and CPD
• Record of interview and references
• Record of previous experience
• Concurrent responsibilities assess if there is adverse impact
Probity Due Diligence
• Written confirmation on any issues arise
• Person to demonstrate ability to perform role not adversely affected to material degree
• If RFSP not satisfied on reasonable grounds, then person may not continue in PCF / CF role
Due Diligence
• Supporting documentation can vary depending on level of PCF / CF (Appendix 1)
• Declaration to abide by standards (Appendix 2)
Offers of appointment – section 23 of Central Bank Reform Act 2010
• RFSP can indicate ‘intention to offer of appointment’, but must wait for CBI approval
9Minimum Competency Code 2011 5 December 2012
Background • Minimum Competency Requirements introduced 1 January 2007 • Review in 2010 • Link with Fitness and Probity Regime • Minimum Competency Code 2011 effective 1 December 2011
Scope • Providing advice • Arranging or offering to arrange • Specified functions • Includes: – Restructuring and rescheduling of loans – Amendments to insurance cover – Services provided over the internet
Retail Financial Products
• Retail financial products:
– Life assurance
– Pensions
– Savings and investments
– Personal general insurance
– Commercial general insurance
– Private medical insurance and associated insurances
– Housing loans, home reversion agreements and associated
insurances
– Consumer credit agreements and associated insurances.Specified Functions
• Specified functions:
– assisting consumers in making a claim
– determining the outcome of claims by consumers
– reinsurance mediation
– direct management or supervision of accredited
persons
– adjudicating on complaintsThe Minimum Competency Standards a) Recognised qualification, or b) Grandfathering arrangements, or c) New entrant, or d) Prescribed script function, and in the case of a) and b), CPD requirements.
Prescribed Script Function • Script devised by accredited person • Initial and ongoing training • Outside script – refer to accredited person • Supervision by accredited person • Monitoring and records
Recognised Qualifications • Restructure of CIP and QFA • Accredited Product Adviser – for each category of retail financial product
Grandfathering
• Grandfathering arrangements retained
• Assessments up to 31 December 2012 subject to:
– Carrying out activity on 1 January 2007
– Four years’ experience in eight-year period prior to 1
January 2007
– Assessment and certification by regulated firm
– Completion of all CPD from 1 January 2008 to date of
assessmentGrandfathering • Documentation to be retained: – Documented assessment – Certification of compliance – Supporting documentation – Confirmation from previous employer, if relevant – Reason for delay in assessment
Grandfathering
• Statement of Grandfathered Status
– Standard format
– Completed by 1 January 2013
– Completed by firm on whose behalf the grandfathered
person is currently acting
– Signed by firm
– Retained on file by firm
– Statement provided to grandfathered person when
ceasing employment or if requestedNew Entrants • Training programme that includes: – Initial training – Supervision by accredited person – Working towards a recognised qualification – Timeframe – maximum four years
New Entrants
• A regulated firm must:
– inform new entrant of requirement to obtain
qualification;
– agree a plan;
– monitor; and
– document the reasons why an opportunity to sit an
examination is not availed of.New Entrants
• Detailed supervision requirements, including:
– All documentation checked and signed off
– New entrant accompanied by accredited person for a
period
– Regular meetings and contact
– No more than seven new entrants per supervisor
– Reduction in supervision based on documented
assessment
– Supervision of tied agents by product producerContinuing Professional Development (CPD) • Change from three-year cycle to annual requirement • 15 formal hours per year • At least one hour for each function undertaken • At least one hour relating to ethics • Person who is qualified and grandfathered – 15 formal hours
Continuing Professional Development (CPD) • Surplus hours may not be carried forward • Shortfall may be made up by end of following year provided no other shortfall within previous five years • Firm must have procedures to ensure compliance with CPD requirements
Register and Certificate of Competency
• Register of Accredited Persons
– removal from Register for failure to complete CPD
more than once in five years
• Certificate of Competency
– confirmation for consumers that person meets the
standardsFinally… • Minimum competency standards are a key component of our consumer protection measures • The Code builds on the framework introduced in 2007 and provides more clarity in a number of areas • A wider range of professional development opportunities
PCF Appointments & Individual Questionnaire
New PCF Appointments from 1 December 2011
• Approval process is managed by the Regulatory Transactions
Division (RTD), within the Central Bank established to centralise,
streamline and automate regulatory transactions.
• Requires the submission of an online IQ with facility to attach
supporting documentation such as:
• Evidence demonstrating the applicant meets the MCC including supporting
documentation evidencing CPD, where appropriate.
• Supporting documentation relevant to Section 5.
• Garda disclosure Forms.
– Publication of target turnaround times for processing IQs to
commence in January 2013.
29New PCF Appointments
The system has the following key features:
• IQ Form completed online by proposed holder of PCF (including pre-formatted CV
sections);
• Sections appropriate to applicant only to be filled / certain sections locked;
• Ability to attach additional supporting documentation;
• Ability to export core data which can be imported for a subsequent PCF application;
• Online Declaration by proposed holder of PCF as to accuracy / veracity of information
provided;
• Online Declaration by officer from the proposing firm confirming that checks of the
individual were undertaken and that the firm is satisfied that the proposed holder of
the PCF is fit and proper;
• Possible to download a copy of the IQ for your records.
30Completing the online IQ form
The Central Bank wishes to stress the importance of providing and attaching the appropriate
information/documentation when making a submission as this will reduce the probability of the IQ
being returned. Examples of possible reasons for an IQ being returned/rejected are as follows:
• Section 3 relating to experience and training not being fully completed;
• Incomplete documentation in relation to compliance with the MCC such as evidence of qualifications,
grandfathering status, new entrant status, and/or continuing professional development;
• Lack of documentation to demonstrate than an issue disclosed in Section 5 (Reputation & Character)
does not have a material impact on the applicants ability to perform the role;
• IQ completed by and/or submitted by a person other than the applicant and/or the proposer;
• IQ submitted by a proposer who is not an approved person within the entity with the authority to submit
the IQ;
• Incorrectly advising whether the proposing entity is currently authorised/approved or a new entity
seeking authorisation/approval.
31Thank you
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