On 10 April 2025, the Central Bank of Ireland launched a consultation on revisions to its Fitness and Probity (F&P) regime.
The consultation follows recommendations made by Mr Andrea Enria, former Chair of the European Central Bank Supervisory Board, who was requested by the Central Bank to undertake an independent review of the F&P approval process in 2024. For further information on the Enria report and the background to this, please see here and here.
Documents
- CP160 – Consultation Paper on Amendments to the Fitness and Probity Regime (CP160) outlines revisions to the F&P regime regarding supervisory expectations and the list of prescribed pre-approval controlled functions (PCFs).
- Guidance on the Standards of Fitness and Probity (F&P Guidance). This consolidates existing F&P guidance into a single document and includes enhancements (the proposed guidance is in draft form and is set out in an Appendix to CP160).
- Fitness and Probity Review – Report on Implementation of Recommendations (Implementation Report) provides details on the progress made regarding the recommendations in the Enria report.
- F&P Gatekeeper Process Manual clarifies the stages of the fitness and probity process, including the engagement that regulated firms and proposed appointees can expect from the Central Bank, in terms of notification of interviews, interview length, time to process applications and availability of feedback.
Consultation – Key proposals
1. Enhancement of industry understanding of the F&P assessment relating to the following:
- Identifying and incorporating objective measures (e.g. specific qualifications, experience requirements and time commitments) and role summaries for certain PCFs to the extent that they are used within the assessment process.
- Conflicts of Interest. The draft Guidance clarifies the Central Bank's expectations regarding the assessment of conflicts of interest.
- Collective suitability, diversity, and inclusion. Although the diversity of the board is not a criterion for assessing an individual's fitness and probity, the collective suitability of the board is the responsibility of regulated firms. The F&P Guidance has been amended to reaffirm the importance the Central Bank attaches to the collective suitability of boards and to diversity within the collective suitability of the board.
- Relevance of past events to an application. The F&P Guidance provides an outline of the approach to be adopted when considering past events in the context of a PCF application. For example, subject to the relevant facts, a lookback period of 10 years will generally be acceptable.
2. Central Bank expectations. The consolidated F&P Guidance incorporates:
- high-level expectations for relevant persons regarding the:
- inherent responsibilities derived from the Senior Executive Accountability Regime (SEAR) Regulations;
- role summaries of certain PCFs and clarification on the definition of independence (derived from the Central Bank's corporate governance requirements);
- high-level expectations with regard to the role of heads of control functions, which emanate from existing corporate governance requirements, sectoral requirements or European guidelines;
- level of experience required for specific PCFs (although there are several factors to be considered by the Central Bank in assessing appropriate levels of experience, Chapter 4 sets out a guideline benchmark which may be useful for firms);
- level of knowledge/qualifications required for specific PCFs;
- time commitments of specific PCFs.
3. Review of PCF roles. The Central Bank has committed to undertaking a substantive review of PCF roles. However, given that the list of PCFs is embedded in SEAR, which is in its early stages of implementation, the Central Bank has opted to wait for a more appropriate time to change the list of PCFs within SEAR.
- The Central Bank proposes a two-stage approach to reviewing the overall number of PCF roles. This comprises an initial targeted revision of the PCF list followed by a more substantive review to be coordinated with the planned three-year review of the SEAR in 2027.
- First stage. This first stage includes removing sector-specific categorisations so that there will be one list of PCFs that applies to all regulated firms (other than credit unions). Some roles will be merged, and certain functions renamed, reducing the number of PCF roles (from 59 to 45). The proposed revised list is as set out in an Annex to CP160.
Implementation Report
Coinciding with the publication of CP160, the Central Bank has published a report outlining the progress made in implementing the Enria recommendations.
The Implementation Report details the actions taken to date, highlighting key measures in strengthening fitness & probity gatekeeping processes. These include:
- CP160. Engagement with industry stakeholders, launching a consultation paper on the Standards guidance and designated PCFs.
- The consolidation and enhancement of F&P Guidance (as outlined). The Central Bank has incorporated and addressed feedback that greater certainty on its expectations for persons performing key roles is desirable.
- Establishing a new dedicated Fitness and Probity Unit
in the Central Bank, streamlining operations, and ensuring
a more cohesive assessment framework. The F&P Unit became
operational in January 2025. Its core responsibilities include to:
- – conduct assessment work across all fitness and probity gatekeeping applications with a view to enhancing the consistency of assessments. Close engagement with sectoral supervision teams will occur;
- – approve fitness and probity applications;
- – for cases of potential refusal, the F&P Unit will refer cases to a senior committee, the Gatekeeping Decisions Committee within the Central Bank for consideration. The Gatekeeping Decisions Committee will not have been directly involved in the assessment process;
- – deliver and ensure adherence to established processes and the progression of decisions in a timely manner.
- F&P Gatekeeper Process Manual. This process document aims to clarify each stage of the fitness and probity process, including the process that regulated entities and proposed appointees can expect from the Central Bank.
- Training. The Central Bank has also delivered enhanced training to supervisors, complemented by the development of an online training tool to support ongoing professional development for supervision teams.
- Future stakeholder engagement. In Q2 2025, the Central Bank will host an industry stakeholder meeting on fitness and probity gatekeeping, alongside ad hoc sectoral engagements when required.
F&P Gatekeeper Process Manual
This document provides an overview of the fitness and probity gatekeeping process drawing on the experience of the Central Bank and relevant insights from peer regulators. The document is intended as practical guidance for regulated entities and proposed appointees. The new manual explains the PCF application and approval process and includes information on:
- notifications for interview;
- duration of interviews;
- a commitment to a 90-day timeframe for the fitness and probity gatekeeping process. Regulated entities and proposed individuals will have clear visibility of the current stage of their assessment;
- the provision of feedback post-interview.
Timeline
The consultation will remain open until 10 July 2025.
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.
