The Central Bank of Ireland has recently released regulations and guidance on the Individual Accountability Framework (IAF).

Here are 6 things you need to know about the updated regulations

What is the Individual Accountability Framework (IAF)?

The IAF is made up of four different elements:

• Senior Executive Accountability Regime (SEAR)
• Conduct Standards
• An enhanced fitness & probity regime
• An amended Administrative Sanctions Procedure (ASP)

What firms are in the initial scope of SEAR?

Firms within the initial scope of SEAR include:

• Credit Institutions (excluding credit unions)
• Insurance Undertakings (excluding reinsurance undertakings, captive (re)insurance undertakings and Insurance SPVs)
• Investment Firms which underwrite on a firm commitment basis and / or deal on own account and / or are authorised to hold client assets
• Incoming third country branches

What is the Management Responsibilities Map?

Each in-scope firm must maintain a comprehensive Management Responsibilities Map that describes it management and governance arrangements.

It should:

• Be maintained and legal entity / firm level
• Identify the individuals in PCF roles
• Describe the allocation of Prescribed Responsibilities and Other Responsibilities among PCF roles
• How does SEAR interact with the existing Fitness & Probity regime? Following the implementation of SEAR, those seeking PCF approval will need to submit a Statement of Responsibilities alongside their Individual Questionnaire (IQ).

What are the Conduct Standards?

There are three ‘sets’ of standards:

• Business Standards -> the CBI now has the power to prescribe standards which ensures that firms act with due skills, act honestly and in the best interests of consumers
• Common Conduct Standards -> these standards apply to all CFs (and PCFs). They act as a benchmark to guide individuals as to the standards of behaviour expected of them.
• Additional Conduct Standards -> these standards apply to individuals performing PCF roles and other individuals who exercise significant influent on the conduct of a firm

When does this come into enforcement?

• The Conduct Standards and enhancements to the Fitness & Probity Regime will become applicable on the 29^th December 2023
• SEAR regulations that describe responsibilities of specific roles (CFs and PCFs) apply to in-scope firms from the 1^st July 2024 and to (Independent) Non-Exec Directors from the 1^st July 2025.

To learn more about the Individual Accountability Framework and CalQRisk, contact us today.