On 25 February, the Central Bank published a notice of intention to remove the existing Designated Person ("DP") pre-approval controlled function ("PCF-39") and replace it with six new pre-approval controlled functions ("PCF"), each aligned to the specific managerial functions set out in the Central Bank's Fund Management Company Guidance (commonly referred to as "CP86").
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The new PCF designations are:
|PCF-39A||DP with responsibility for Capital and Financial Management|
|PCF-39B||DP with responsibility for Operational Risk Management|
|PCF-39C||DP with responsibility for Fund Risk Management|
|PCF-39D||DP with responsibility for Investment Management|
|PCF-39E||DP with responsibility for Distribution|
|PCF-39F||DP with responsibility for Regulatory Compliance|
The changes will be introduced by amendment to the existing regulations designating PCFs (and controlled functions). The Central Bank has advised that DPs in situ on the date the amended regulations come into effect will not be required to seek the approval of the Central Bank to continue to perform the new PCF roles. However, fund boards will be required to review their PCF assessments conducted under section 21 of the Central Bank Reform Act 2010 in respect of the in situ DPs and submit confirmation of this assessment to the Central Bank.
Fund boards must conduct these assessments and provide their confirmations to the Central Bank within six weeks of the amended regulations taking effect. Should the DP change after the new PCF roles have been introduced by the amended regulations, he/she will be required to seek the Central Bank's prior approval in writing to that appointment by means of a new IQ submission.
Three new categories of PCF are also being introduced, one of which PCF 49: Chief Information Officer may be relevant to fund companies depending on their PRISM impact rating and if IT is a key enabler or core element of their business model.
Once the amended regulations take effect, the fitness and probity assessment conducted by the fund board prior to the appointment of a DP will have to be reviewed and a confirmation provided to the Central Bank that the assessment has been carried out within the six week timeframe. The exact timings and specifics of the confirmation remain unclear. However, it is likely that a refresh of the fitness and probity assessments for the DPs will need to be done (notwithstanding that the annual PCF confirmations will have been filed by 28 February) and these subsequent confirmations will be required during Spring/Summer 2020.
The Central Bank is inviting comments from stakeholders on this proposal until 26 March 2020. Comments should be submitted by email to email@example.com.
If you have any questions on, or would like to discuss the foregoing in more detail, please do not hesitate to contact a member of our team.
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.