Ireland: Minimum Competency Code To Be Updated

Last Updated: 29 November 2016
Article by Orla O'Connor, Maedhbh Clancy and Robert Cain
Most Read Contributor in Ireland, October 2018

The Central Bank is consulting on changes to its Minimum Competency Code 2011. Amended twice already to cover both debt management services and credit servicing, the existing Code sets out minimum professional standards that must be met in respect of the staff of financial services providers when dealing with consumers in relation to retail financial products.


Some of the updates are to address changes in professional knowledge and competency requirements arising from:

The Central Bank's proposed changes are more wide-ranging than those required by the above laws and guidelines. Its Director of Consumer Protection, Bernard Sheridan, commented that the proposed changes "...are aimed at increasing professional standards for staff of financial service providers, in particular for staff dealing directly with consumers in relation to retail financial products and also those designing products that are ultimately sold to consumers."


Since 2011, the Central Bank's requirements in relation to minimum competency have taken the form of the existing Code. However, the Central Bank proposes to divide the new requirements into a new Code together with set of Regulations.

The new Code will deal with fitness and probity standards, additional requirements for the provision of advice on MiFID investment services and activities, and recognised qualifications.

The Regulations will deal with general requirements on regulated firms, including:

  • providing services online;
  • the conditions that must be met where a prescribed script function is performed on behalf of a regulated firm;
  • establishing and maintaining the register of accredited persons;
  • supervising individuals who are carrying out a relevant function for the first time, or carrying out a new type of relevant function for the first time;
  • record-keeping;
  • carrying out internal annual reviews; and
  • continuing professional development.


The Central Bank intends to make the following changes but, as these changes are necessary to meet EU requirements, it is not specifically consulting on these. The changes on which it is consulting are listed later in this Briefing in the "Specific Consultation Questions" table.

  • Competencies

As the competencies listed in the Mortgage Credit Regulations, MiFID II Guidelines and the IDD are broader than those listed in the existing Code, the new Code will reflect a more expansive EU-based list of competencies.

  • Advice

The definition of "advice", until now based on the definition set out in the Investment Intermediaries Act 1995, is being amended in the new Code to bring it into line with the equivalent definitions contained in the Mortgage Credit Regulations, MiFID II Guidelines and the IDD.

  • "Advice" means the provision of a personal recommendation or information to a person, whether at the person's request or at the initiative of the firm, in the course of performing a relevant function. For the avoidance of doubt, this does not include any of the following:
  • the provision of a brochure or booklet or other information to a person, without the provision of advice to that person;
  • information given in a newspaper, journal, magazine or other publication, including electronic publications, where the principal purpose of the publication taken as a whole is not to lead persons to use any specific retail financial product or any specific provider of such products;
  • information given in a lecture, seminar or similar event or series of such events, where the principal purpose of the event or events taken as a whole is not to lead persons to use a specific retail financial product or any specific provider of such products and where persons engaged in the organisation or presentation of such events will earn no remuneration, commission, fee or other reward as a result of any particular decision, by a person attending such event and arising out of such attendance, to use any particular retail financial product or any specific provider of such products;
  • information given in sound or television broadcasts where the principal purpose of such broadcasts taken as a whole is not to lead persons to use any specific retail financial product or any specific provider of such products;
  • providing information on an incidental basis in conjunction with some other professional activity (which professional activity is not subject to the new Code), so long as the purpose of the activity is not to assist a person to enter into or to become entitled to benefit under, terminate, exercise any right or option under, or take any benefit from one or more retail financial products.
  • MiFID II

The list of "retail financial products" is being broadened to cover structured deposits and financial instruments as defined in MiFID II.

To date, the existing Code applied to the provision of advice on, arranging or offering to arrange, retail financial products for consumers. This is being widened to cover the provision of advice to, and arranging or offering to arrange retail financial products for, retail clients and elective professional clients.

Additional requirements will be imposed in respect of the provision of advice on particular MiFID services and activities which, until now, have been outside the scope of the existing Code. These include the operation of multilateral trading facilities and organised trading facilities, the placement and underwriting of financial instruments, and the provision of advice to undertakings on capital structure.

  • Staff of mortgage creditors and mortgage intermediaries

Staff carrying out relevant functions in relation to mortgage credit agreements must obtain a recognised qualification by 21 March 2019, or act as new entrants working towards a recognised qualification.

  • Investment products

Staff carrying out relevant functions in relation to financial instruments and structured deposits (as defined in MiFID II) must have at least 6 months' experience and obtain a recognised qualification by 3 January 2018, or with effect from that date may act under the direction and supervision of a qualified and experienced person for up to 4 years while working towards meeting the experience and qualification requirements.

  • Annual reviews

All in-scope firms will now have to conduct annual reviews which take into account employees' qualifications, development and experience requirements, taking into account regulatory developments and any new retail financial products offered by the regulated firm.

  • Freedom to provide services

Those who provide services in the State in respect of mortgage credit will be required to meet certain competencies regarding:

  • knowledge of relevant laws (in particular, consumer protection law);
  • the process for purchasing real property;
  • how the Land Registry and Registry of Deeds systems work; and
  • the Irish mortgage market,

through a recognised qualification for the purposes of the new Code.


QUALIFICATIONS AND EXPERIENCE Should those who carry out a relevant function in respect of any in-scope retail financial product have a minimum level of experience before they can work without supervision? If so, is 6 months' experience sufficient or should experience depend on the role and the product?

The Central Bank is seeking views on its proposal that regulated firms keep supporting documents and sign Certificates of Experience confirming the relevance and level of individuals' experience.

DEVISING/CREATING PRODUCTS The Central Bank has proposed that regulated firms, at a minimum, ensure that one person with material influence on the final decision regarding product design have a relevant qualification for the purposes of the new Code. It is seeking feedback on this proposal, and views on whether there are alternative ways in which compliance with the new EU-based competencies and standards could be demonstrated.

(To date, the existing Code has not applied to those involved in designing or approving products however, in light of EU-based changes (in particular, the Mortgage Credit Regulations) this is now in scope.)

CREDIT UNIONS The Central Bank is seeking views on whether the new Code should apply to credit unions in respect of any retail financial product offered by them that is within the scope of the new Code, and what the timeframe should be for such an extension of scope.

(The existing Code already applies to credit unions when carrying out insurance intermediation activities and the new Code will apply to credit unions when providing mortgage credit agreements.)

MORTGAGE CREDIT INTERMEDIARIES The Central Bank is seeking views on ways in which board members of mortgage credit intermediaries could meet the competencies set out in the Mortgage Credit Regulations (other than obtaining a recognised qualification for the purposes of the new Code).
REINSURANCE The Central Bank is seeking views on what qualifications are suitable for the carrying out of reinsurance distribution activities.


The closing date for submissions is 15 February 2017. We will issue a further update once the Central Bank publishes its feedback on responses received to this consultation.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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