For those UK based organisations that have been closely watching developments from the Central Bank of Ireland (CBI), will know that the Individual Accountability Framework Bill was initially published for debate in July 2021. Whilst this will not be news to most readers of this blog, it is worthwhile re-capping on what this means for Registered Financial Services Providers (RFSP) and how (and most importantly) when this is likely to affect them.
So, the story so far is that for some time now the CBI has been looking to implement a legislative framework that will allow it to implement several measures to introduce greater accountability for senior leaders within RFSP amongst other things. It has been working with the Department of Finance in Dublin to develop the framework. But before it can hold individuals to a higher level of accountability the legislation needs to be enacted that will then allow the CBI to write the rulebooks with which it will oversee the myriad of regulated entities that operate under its oversight. (At the last count this was more than 10,000 regulated firms.)
It’s worth noting that the key focus for the CBI here is all about producing better outcomes for investors and consumers, which of course is no difference in essence to why SM&CR was implemented here in the UK. Having obviously watched the development of SM&CR in the UK with interest, there was of course likely to be some real similarities between what is expected of regulated firms overseen by the PRA and FCA in the UK, and what the likely make up of any new regime under the CBI will be.
Whilst at the time of writing this, there is not yet a final statement on the finalised legislation that will enact this change, as we understand that there are a few finer legal points to be concluded. All commentators on this CBI initiative point towards the summer of 2022 as being the time period when we might expect to see a Consultation Paper on the topic.
If that is the expected timeline, what might this means for RFSP, their senior managers and their wider pool of employees?
At the highest level, the current framework that is being finalised allows for the following:
On that basis, what might RFSP and affected individuals be doing now in preparation for the consultation and subsequent implementation of this new regime?
As an award winning RegTech provider in the UK who has supported clients with the introduction of other accountability, governance and certification regimes not only in the UK but also in Singapore. Our knowledgeable and established team have a wide range of resources available including podcasts, blogs, fact sheets and downloads to name but a few.
On a final note, RFSP should look no further than the recently published ‘Consumer Protection Outlook 2021′, to see how important this initiative is to the CBI. Within this document the CBI refer to their desire to “deliver intrusive risk-based supervision and intensify their targeted assessment of firms and sectors that pose the greatest potential harm to consumers and investors.”
If that isn’t a clear message about the long-term plans for supervision of the market not only now but also when SEAR is introduced, then I don’t know what is!
But having the most up-to-date regulatory information and knowledge is only part of the battle when it comes to SM&CR. Without the relevant tools to do the job, then the knowledge in itself will not allow firms to demonstrate the cultural change the regulators are looking for and indeed the reasonable steps that senior management will need to demonstrate.
Accord Ireland is part of our award-winning SM&CR solutions. Our team are available to you as a resource. Click here to arrange a free and no obligation consultation and start that conversation about the value that RegTech can add to your organisation.
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