In March 2013, the Central Bank updated its Fitness and Probity
– Frequently Asked Questions
("FAQs") publication to include two
additional questions in section three, ie, the section dealing with
pre-approval controlled functions.
The Central Bank's response to the new question 3.17 confirms
that individuals who were in-situ at the time the fitness and
probity regime was introduced and thus were not required to submit
an individual questionnaire ("IQ"), will
be required to receive approval from the Central Bank through the
submission of an IQ if they are subject to re-election or
re-appointment (eg, directors). The Central Bank states that
once an individual has been approved to a role that is subject to
re-election or re-appointment provisions, it is the Central
Bank's intention that he or she will not be required to undergo
the approval process again as long as he or she remains in that
role. However, upon re-election or re-appointment of such an
individual, the board of directors of the firm will be required to
confirm to the Central Bank that the individual's circumstances
have not change since pre-approval.
The Central Bank's response to the new question 3.18 confirms
that individuals who were in-situ in pre-approval controlled
functions who are subject to employment contract renewals after the
introduction of the fitness and probity regime may also be subject
to the approval process. However, the Central Bank noted that
there may be situations where the terms of a particular contract
mean that a contract renewal does not constitute a re-appointment.
The Central Bank stated that it is for the regulated financial
service provider to determine, based on the contract terms and
legal advice if appropriate, whether it is required to comply with
the approval process. As above, it is intended that the
initial approval will cover any subsequent contract renewals
subject to the board of directors providing a confirmation to the
Central Bank that the individual's circumstances have not
changed.
Click here to view the updated FAQs.
Central Bank reminds intermediaries of consumer protection obligations
In February 2013, the Central Bank published its first issue of the Intermediary Times for 2013 which focuses on the updated guidance on the Consumer Protection Code (the "CPC") issued in December 2012.
CPC Guidance
The Central Bank notifies firms of the publication of an updated
guidance document on the CPC. In particular, the Central Bank
notes that in order to comply with provision 7.4 of the CPC, prior
written consent must be obtained from a consumer each time an
intermediary intends to deduct any charge from a premium
rebate. Further, the Central Bank notes that a firm which
sends a text message to a consumer outside of the permissible hours
for telephone contact set down in provision 3.43 of the CPC would
not be a violation of this provision.
The Central Bank also reminds intermediaries of the CPC provisions
relating to advertising, in particular, provisions 2.4, 4.10, 4.16,
4.17, 9.2, 9.6 and 9.7. Some of the Central Bank's
specific concerns include: the incorrect use of regulatory
disclosure statements; the failure to clearly distinguish between
regulated and unregulated activities; the use of the term
"independent" without satisfying the relevant
criteria; and the use of phrases such as "savings
of", "prices from", "save up
to" without prominently displaying qualifying criteria in
the main body of the advertisement. The Central Bank also
emphasises that key information and eligibility criteria should be
prominently stated with the minimum or maximum price or potential
maximum saving in the main body of the advertisement.
Grandfathering under MCC
The Central Bank emphasises that regulated firms cannot undertake any further grandfathering assessments as the deadline has passed. All regulated firms should now have a Statement of Grandfathered Status (the "Statement") on file for each grandfathered individual acting on its behalf. This Statement must be provided to an individual when he or she ceases employment with the firm, or on request, and new employers are advised to obtain an original Statement for the purposes of confirming the functions for which an individual has availed of grandfathering arrangements. Finally, the Central Bank emphasises the importance of keeping the Statement in a safe and secure location and states that firm contributions to the Investor Compensation Scheme should ensure that they are in a position to issue a duplicate Statement.
Contributions to Investor Compensation Scheme
Finally, the Central Bank reminds regulated firms of their legal
obligation to make an annual contribution to the Investor
Compensation Scheme pursuant to the Investor Compensation Act
1998. The Central Bank notes that it has recently taken
successful legal proceedings against non-compliant firms and that
interest may be imposed on late payments.
Please click here to view the full text of the Intermediary
Times.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
