Fitness And Probity: CP160 - Central Bank Publishes Feedback Statement And Revised Guidance

On 24 November 2025, the Central Bank of Ireland (Central Bank) published a Feedback Statement on Amendments to the Fitness and Probity (F&P) Regime, following a consultation with industry (CP160). For further information on CP160, please see our article here.

The Central Bank also published:

• the Fitness and Probity Standards 2025, which consolidates the Fitness and Probity Standards 2023 and the Fitness and Probity Standards for Credit Unions 2024 into one document; and
• the revised Guidance on the Standards of Fitness and Probity (the Guidance) (effective 20 November 2025).

Under the consultation process, industry respondents sought clarity on specific elements of the application of the F&P framework including the approach to identifying the Controlled Function (CF) population, additional granularity in relation to the F&P due diligence to be undertaken by firms and greater flexibility in the Central Bank's expectations of the factors to be considered within F&P assessments. Having considered the industry feedback, the Central Bank published its feedback statement and revised Guidance to provide additional detail, and to reflect the application of the principle of proportionality and the appropriateness of case-by-case assessments. The revised Guidance also reflects that while legislative references have been included to highlight what, in the Central Bank's view, constitutes best practice, these references are not intended to extend such legislation and/or requirements to sectors to which they do not currently apply.

Key changes outlined in the Feedback Statement

Temporary Officer

Whilst the draft Guidance allowed for the appointment of a Temporary Officer when a PCF role became vacant, it could only be used in exceptional circumstances. The revised Guidance provides that when a PCF role becomes vacant a Temporary Officer may be allowed to perform a PCF role by way of an arrangement agreed in writing with the Central Bank, for a period of up to six months upon certain conditions being satisfied. The firm must notify the Central Bank of the following:

• information on the circumstances which have given rise to the need for the Temporary Officer appointment;
• confirmation that the proposed Temporary Officer has agreed to comply with the F&P Standards and will continue to do so whilst performing the PCF role;
• confirmation of the duration for which the appointment of the Temporary Officer is requested;
• confirmation of the succession plans for the role where appropriate, noting there may be circumstances whereby the original PCF resumes the role within the permitted six-month period;
• confirmation that the firm has satisfied itself that the person proposed to perform a role as Temporary Officer is suitable to perform that role for the temporary period;
• confirmation that the firm has satisfied itself on reasonable grounds that the person complies with the F&P Standards and is in a position to certify same.

An appointment of a Temporary Officer will not take effect until the Central Bank has confirmed in writing that it agrees to the appointment. In addition:

• Where a Temporary Officer is appointed to fill a role that has been permanently vacated, a firm will have to submit to the Central Bank a PCF application in respect of the role within three months from the date of the appointment. Such a PCF application may be in respect of the Temporary Officer fulfilling the role on a permanent basis or may be in respect of another person.
• A Temporary Officer may perform the role while the firm is awaiting the outcome of the Central Bank's assessment of a PCF application, with a maximum six-month period for a Temporary Officer appointment.
• If a PCF application is not submitted in respect of the role within the initial three-month period, the agreement of the Central Bank will lapse, and the Temporary Officer will no longer be approved to carry out the role.
• The Central Bank may agree to an extension of the appointment of the Temporary Officer in exceptional circumstances.
• A PCF application will not be required where it is known that the previous PCF role holder will return to the role within six months.
• Where the previous PCF role holder returns to a role following an absence, their PCF approval remains valid, and another application will not be required.

Although Temporary Officers are not technically PCF role holders, they are considered to hold a CF-1 role on the basis that they can exert significant influence on the conduct of the affairs of the regulated firm. Whilst the Common Conduct Standards and the Additional Conduct Standards introduced under SEAR will apply to the Temporary Officer, they will not be required to have a Statement of Responsibilities under the Senior Executive Accountability Regime (SEAR). Nonetheless, firms should ensure that the role and responsibilities of the Temporary Officer are appropriately set out and understood.

Guidance on the Standards of Fitness and Probity

Following feedback, the Central Bank has revised the Guidance to provide additional detail, and to reflect the application of the principle of proportionality and the appropriateness of case-by-case assessments.

PCFs as a subset of CFs

In the context of the dual classification of all PCFs as CF-1s, and the designation of all compliance-focused PCFs as CF-2s (as well as CF-1s) respondents to the consultation queried whether there were additional requirements or expectations in respect of this dual classification. The Central Bank has confirmed that there are no new requirements or expectations associated with this dual classification and the dual classification does not introduce any additional due diligence requirement for PCFs. Additionally, where a firm certifies that an individual complies with the standards of fitness and probity in respect of a PCF role, the firm does not have to make certifications in respect of the CF-1 (and/or CF-2) aspects of that role.

The role of company secretary

The Central Bank confirms that the designation of a company secretary as a CF-1 should be determined on a case-by-case basis based on whether the functions carried out by the individual enable them to exercise a significant influence on the conduct of the affairs of the firm. Where a firm determines that the role carried out by their company secretary is purely the administration of company law matters, such individuals need not, for those activities alone, be designated as a CF-1.

CF-2

Where the functions performed by an individual constitute "ensuring, controlling or monitoring" compliance by a regulated financial service provider with its relevant obligations, that individual is occupying a CF-2 role, regardless of their seniority. However, it is important to note that this does not extend to administrative or support staff in a compliance function. Similarly, with regard to firms that have an outsourced internal audit function, and have therefore a nominated Head of Internal Audit (PCF-13), to the extent that other members of the outsourced internal auditor are directly involved in ensuring, controlling or monitoring compliance by the regulated financial service provider with its relevant obligations, those individuals are occupying a CF-2 role, but this does not extend to administrative or support staff in an audit function.

F&P due diligence

In response to requests from industry for additional granularity in guidance on applying a proportionate approach to F&P due diligence and in light of difficulties outlined by industry in performing F&P due diligence, such as gaining references and conducting criminal record checks, and when using public databases to search for personal financial information or cross-jurisdictional references; the Central Bank has clarified that it expects firms to carry out F&P due diligence on a best-efforts basis and will take into account the limitations of public records. The revised Guidance on due diligence does not differentiate between different sectors or firms, however the revised Guidance does remind firms that they can apply an approach consistent with the nature, scale and complexity of the firm and the roles therein. In addition, Appendix 4 of the revised Guidance points to where firms may rely on self-certification by individuals in CF3 – CF11, CUCF-3 – CUCF-8 and CURICF-3 – CURICF-11 roles. As noted in the revised Guidance, the principle of proportionality cannot be applied in relation to probity, and the assessment must be conducted for all firms in the same manner. The Central Bank also acknowledges the suggestion for a register of PCF holders and has said it will consider this suggestion when reviewing the PCF list, including assessing what benefit any such register could provide weighted against potential disadvantages including the costs of implementation and maintenance.

Look-back period

In response to requests for clarity in relation to the specifics of the ten-year look-back period, the Central Bank has noted that notwithstanding that ten years is given as a guide to relevance, firms should nevertheless seek information in relation to all criminal, civil or regulatory actions in respect of an individual regardless of when they may have occurred. The Central Bank considers that if ten years have passed since the date of the final decision or finding in respect of the relevant action (save where a custodial sentence may have been imposed) and there are no other factors that raise material concerns about the F&P of the individual, the individual is likely to meet the F&P standards. The exception is if there are aggravating circumstances that come to light during the course of assessing due diligence that could materially impact a person's F&P. The Central Bank expects that this is investigated and disclosed even if the event occurred more than ten years ago.

Financial soundness

The Central Bank has confirmed that it does not expect PCF applicants/CFs to provide bank statements as part of the assessment of financial soundness. In addition, the Central Bank has confirmed that, in general, the absence of a judgement or default will suffice, and checks should be performed on a best efforts basis. It is the Central Bank's view that, unless there are further disclosures made by the applicant or concerns arise that warrant investigation, public records should be sufficient. The reference to the need for the provision of "evidence of financial soundness in order to uphold expected standards" has been removed from the updated Guidance.

Capacity to perform a role

• Time commitments – In relation to the assessment of time commitments, the Central Bank reaffirms that a case-by-case approach is appropriate, and that case-by-case assessments will be made based on the firm and the role in question. In this regard, the revised Guidance contains factors for consideration when considering time commitments (e.g. other directorships, other CF/PCF roles, other mandates and the responsibilities attached to those mandates). While it notes the requests for examples of acceptable arrangements, given the Guidance applies to a wide range of firms from small, non-complex firms to large international firms, the Central Bank has declined to attempt to provide illustrative cases.
• Executive PCF roles – Regarding executive PCF roles, while the Central Bank expects that in many cases these are carried out on a full-time basis, it recognises that there are circumstances where this is not necessary or practical, and further that there will be circumstances where there are synergies between roles. In such circumstances, firms should be able to explain why a full-time role is not considered necessary. Regardless, applicants will have to meet the required competency standards for each role and to have sufficient time to properly carry out the role. However, Sections 4.4 and 4.13 of the Guidance have been amended to remove the reference to the default expectation that executive PCF roles are carried out on a full-time basis.
• Availability and accessibility of a PCF to the Central Bank – The Central Bank has reiterated that regulated firms are expected to demonstrate a sufficient degree of substantive presence in the State and that effective strategic direction, decision-making, governance and risk management is sufficiently present in the State and that regulated firms must ensure that the Central Bank has access to key decision makers to ensure that the regulated firm is capable of being effectively supervised. However, the Central Bank has also confirmed that requests for persons performing PCF roles to reside outside the State will be assessed on a case-by-case basis taking into consideration the nature, scale and complexity both of the firm and of the PCF role in question. The Guidance has been amended to reflect that in the overall assessment of fitness of a proposed PCF role-holder, the capacity of an individual to meet the Central Bank's expectations while residing outside the State will be taken into account, as will the residence of other PCF role holders in the firm.

Independence of Mind and Independence

The Central Bank expects independence of mind of board members to be taken into account by firms when assessing the F&P of board members. Firms should be able to satisfy themselves that board members possess the requisite attributes, such as the ability of board members to make their own sound, objective and independent decisions and judgments when performing their functions and responsibilities. In the normal course, save where there exists evidence to suggest otherwise, a firm can assume that a person sufficiently qualified and experienced to act as a board member will have sufficient independence of mind to carry out the role. The Central Bank encourages firms to select suitable independent non-executive directors (INEDs) in a manner in which they see fit for their sector, whilst giving due consideration to the criteria set out in Section 4.34 of the updated Guidance.

Inherent responsibilities

Industry sought confirmation that the reference to "Inherent Responsibilities" within the draft Guidance was not an extension of the SEAR to sectors that are not yet within scope of the regime. In response the Central Bank has retained Inherent Responsibilities within the revised Guidance but for the avoidance of doubt the reference to the SEAR has been removed.

Level of knowledge and experience

• Board members – While the objectivity of setting out a minimum number of years of experience has been retained, the Guidance has been amended to allow for greater flexibility in the types of knowledge and experience considered appropriate. It should be noted that an individual who does not possess the level of experience set out may still be considered fit and proper where there is an appropriate justification.
• Head of control functions – The Guidance has been amended to reflect the fact that it is the Central Bank's general expectation that the Head of Finance (PCF-11) has an appropriate qualification, recognising that where an individual holds an actuarial qualification that qualification may suffice. The Central Bank has also taken the opportunity to clarify the level of knowledge and experience for a similar role in a credit union. As a result of the consolidation of all F&P related guidance into a single document the revised Guidance includes Central Bank's expectations for (re)insurance undertakings in relation to the role of the Head of Actuarial Function (PCF-48). The Central Bank has confirmed that it will consider applications for all roles with qualifications issued and/or professional membership of associations within or outside of Ireland.

Collective Suitability, Diversity and Inclusion

The variety of circumstances and individual characteristics that go to collectively make up the board of a firm does not allow the Central Bank to give particular examples for the benefit of all firms. How collective suitability and diversity can be improved in any given situation is highly dependent on cases of individual firms. The Central Bank will, in its ongoing supervision of firms, apply the principles and expectations set out in sector-specific Corporate Governance Requirements and in the revised Guidance in a flexible, proportionate and constructive way. As regards extending diversity expectations beyond board members, firms may promote diversity expectations, as they see fit, via internal organisational policies.

Review of the PCF list

Following feedback from industry, the Central Bank has decided not to conduct a two-stage review of the PCF list or to remove the sector specific categorisations. It will instead undertake a substantive review of the PCF list and consult on its proposed changes in 2026, with the introduction of revisions being implemented mid-2027 to coincide with a review of the SEAR.

In the meantime, the Central Bank is progressing with other specific changes to the PCF list identified within CP160. These include the removal of two roles (namely, Head of Traded Markets (PCF-24) and Head of International Primary Markets (PCF-25)) and the addition of two new PCF roles highlighted in CP160 (i.e. a Head of Safeguarding for payment institutions and electronic money institutions and a Head of Safeguarding for crypto asset service providers). For clarity, the Central Bank confirms, that as set out in CP160, the separate PCF list will remain for credit unions.

The Central Bank will issue amending Regulations to reflect the above changes. On the role of Head of Safeguarding, the Central Bank will apply its in situ process for any individuals occupying such a role at the time the amended Regulations become applicable. New appointments to this role will be subject to the PCF approval process.

The Central Bank portal – F&P section

The Central Bank refers to its Fitness and Probity Individual Questionnaire, Applications and PCF Roles Guidance, which details steps on how to complete a PCF application on the Portal.

The Central Bank also states its intention to further streamline the guidance and highlight key points, including clarification on user roles and responsibilities and their access.

The Central Bank also highlights plans to host webinar sessions to enhance clarity and understanding of the PCF application process and to provide portal users with a better understanding of how to use the system and how to avoid common errors, which it will advertise via the Central Bank's usual communication channels.

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.