Key Points to Note:
- Splitting PCF-2 role.
- New Head of AML/CTF role and removal of PCF role relating to Head of Compliance with responsibility for AML and CTF.
- Expansion of PCF-16 to include non-EEA branch managers.
- 3 June 2022 deadline for confirmation of PCF designations and assessments.
In September 2021, the Central Bank of Ireland (the "Central Bank") issued a Notice of Intention ("Notice") to amend its list of PCFs based on its supervisory experience around the use and numbers of existing PCFs, with the proposal to create, remove and reclassify certain PCF roles. The Central Bank invited feedback from industry, and upon consideration of same the Central Bank published its Feedback Statement along with the Central Bank Reform Act 2010 (Sections 20 and 22) (Amendment) Regulations 2022 in which the list of PCFs is revised as follows:
- Introduction of PCF-2A – Non-Executive Director;
- Introduction of PCF-2B – Independent Non-Executive Director;
- Introduction of PCF-52 – Head of Anti-Money Laundering and Counter Terrorist Financing;
- Removal of PCF-15 - Head of Compliance with responsibility for Anti-Money Laundering and Counter Terrorist Financing Legislation;
- Expansion of PCF-16 – Branch managers of branches established outside the State (to include managers of non-EEA branches);
- Removal of PCF-31 – Head of Investment; and
- Any roles relating to the chairing of a board or committee have been amended to refer to the "Chair" as opposed to "Chairman".
PCF-2 Segregation: PCF-2A and PCF-2B
As highlighted in the Notice, the PCF-2 role has now been separated out into two roles, namely PCF-2A for the role of non-executive director and PCF-2B introducing the newly specified role of independent non-executive director ("INED") which was created for the purposes of providing the Central Bank with greater clarity and for record-keeping. It does not introduce any additional or amended requirements regarding the appointment of INEDs.
It is noted that all individuals currently performing the PCF-2 role will automatically be re-designated by the Central Bank as a PCF-2A. Where an individual performing the PCF-2 role is considered independent, the relevant Irish regulated financial service provider ("RFSP") will be required to notify the Central Bank that such person's status is required to be designated as PCF-2B by 3 June 2022.
Any new appointments to the role of PCF-2A or PCF-2B after 5 April 2022 will proceed through the usual application process.
Removal of PCF-15 and introduction of PCF-52
The Central Bank has removed the role of PCF-15 (Head of Compliance with responsibility for Anti-Money Laundering and Counter Terrorist Financing Legislation) and introduced a new PCF-52 role. This amendment was deemed necessary to introduce an AML specific compliance role and for that role to be named "Head of Anti-Money Laundering and Counter Terrorist Financing Compliance".
The Central Bank confirmed that this change does not impose an obligation to appoint separate individuals to PCF-12 (Head of Compliance) and PCF-52 roles meaning that one individual can be identified as discharging both functions. It also notes that a specific PCF-52 role may not be required for each RFSP. However, RFSPs are reminded that they will need to review its functions to determine if a role within the RFSP meets the substance of PCF-52.
For a person currently performing PCF-15, this role will be end-dated, and the RFSP will be required to notify the Central Bank by 3 June 2022 as to how that person's role should now be designated (i.e. as a PCF-12, PCF-52 or both). Where an RFSP decides that a PCF-52 role exists, an assessment as required under Section 21 of the Central Bank Reform Act 2010 (the "Act") should be carried out and confirmation of such an assessment must be submitted to the Central Bank by 3 June 2022.
For any new appointments to perform the role of PCF-52 after 5 April 2022, the individual must be approved by the Central Bank in respect of the performance of such role in accordance with the usual application process.
PCF-16: Expansion of to include managers of non-EEA branches of RFSPs
The PCF-16 role has been expanded to include branch managers of RFSPs in non-EEA countries with the Central Bank taking the view that this is a necessary amendment given the number and size of branches of RFSPs outside of the EEA and due to the level of control that managers of these branches may have.
RFSPs with branches located outside of the EEA (including the UK) must submit confirmation that they have assessed any in situ person performing the role of PCF-16 (being a branch manager) in accordance with Section 21 of the Act and submit confirmation of such assessment to the Central Bank by 3 June 2022.
For any new appointments to the role of branch manager of any non-EEA branch of an RFSP after 5 April 2022, the individual must be approved by the Central Bank in respect of the performance of any such role in accordance with the usual application process.
Removal of PCF-31: Head of Investment
The PCF-31 role has been removed as the Central Bank found that RFSPs, when considering the roles of PCF-30 and PCF-31 for an individual, tend to select PCF-30 and as such, there is no need to maintain the use of the PCF-31 role as the Central Bank considers that these are duplicative roles. No action is required from RFSPs in this regard.
Individuals that hold the role of PCF-31 will be automatically re-designated as PCF-30.
The Central Bank have confirmed that the titles of roles relating to the chairing of a board or committee have been amended to refer to the "Chair" as opposed to "Chairman" in line with a focus on diversity and inclusion at RFSPs. No action is required from RFSPs to which this change affects, the titles of individuals occupying such roles will automatically be amended.
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.