Individual Accountability Framework
The Central Bank (Individual Accountability Framework) Act 2023 (the IAF Act) was signed into law on 9 March 2023 and was partially commenced on 19 April 2023. The remaining parts of the IAF Act were commenced on 29 December 2023. Some aspects of the IAF Act did not take effect until the Central Bank issued enabling regulations.
The Individual Accountability Framework (IAF) includes the following key elements:
- Senior Executive Accountability Regime (SEAR):
The SEAR requires in-scope firms to set out clearly and fully where responsibility and decision-making lie within the firm’s senior management, and imposes a legal Duty of Responsibility on persons carrying out Pre-Approval Controlled Function (PCFs) roles in such firms.
The SEAR will apply in respect of executive PCF roles within in-scope firms from 1 July 2024.
The Central Bank has issued the SEAR Regulations and the related final Guidance on the IAF, and has also published Questions from Stakeholders to provide responses to queries received to-date.
- Conduct Standards:
These include the Common Conduct Standards, which are a set of expected standards of conduct which apply to all individuals carrying out Controlled Function roles (CFs) in all regulated firms, and the Additional Conduct Standards, which apply to all individuals carrying out Pre-Approval Controlled Function roles (PCFs) or any other role that may exercise a significant influence on the firm’s affairs (CF-1), in all regulated firms.
The Conduct Standards have applied since 29 December 2023.
The Central Bank of Ireland has issued guidelines on the Conduct Standards within the Guidance on the IAF.
- Enhancements to the current Fitness & Probity (F&P) Regime:
These enhancements require regulated firms to proactively certify that individuals carrying out CF and PCF roles meet the Central Bank’s standards of F&P.
The Certification Regulations have applied since 8 January 2024.
Please see the following links for more information:
- Enhancements to the Administrative Sanctions Procedure (ASP).
The Central Bank now has the ability to take enforcement action under the ASP directly against individuals who have breached their personal legal obligations, including those under the Conduct Standards, rather than only for their participation in breaches committed by a regulated firm. We have also made changes to how we run our ASP.
The Central Bank has published consolidated Administrative Sanctions Procedure Guidelines(ASP Guidelines) in December 2023
Links to Consultations and Feedback Statements
13 March 2023: Public consultation and feedback statement (CP153) on the enhanced governance, performance and accountability in financial services Regulation and Guidance under the Central Bank (Individual Accountability Framework) Act 2023
22 June 2023: Public consultation and feedback statement (CP154) on consolidated guidelines in respect of the Central Bank’s Administrative Sanctions Procedure
See also: