Central Bank finds lapses by firms on fitness of key staff

Regulator wars of failure to comply under Fitness and Probity Regime

The Central Bank noted that it has fined firms in recent years, including Merrion Stockbrokers, Appian Asset Management and E-Services & Communications Credit Union, at least partly due to failings under its fitness and probity regime.

The Central Bank noted that it has fined firms in recent years, including Merrion Stockbrokers, Appian Asset Management and E-Services & Communications Credit Union, at least partly due to failings under its fitness and probity regime.

 

The Central Bank has warned financial firms of their responsibility to ensure people working in key roles are fit for those jobs, having uncovered instances of lapses such as a case where an individual had a “significant judgment registered against them”.

“First have the first line of responsibility under the Fitness and Probity Regime,” said Derville Rowland, director general for financial conduct, and Ed Sibley, deputy Central Bank governor, in a letter issued to financial firms on Monday, referring to rules that was introduced in 2010.

“Further, this responsibility does not end following the hiring of staff; you must ensure that your staff are fit and proper on an ongoing basis. Where firms fall short, the Central Bank will take appropriate action.”

The regulator said that the unidentified case where a person had a significant judgement against them showed that the firm involved “failed to take any steps to satisfy itself that the individual still complied with the requirements” under fitness and property rules.

The main reason behind the rules is to make sure people in senior positions in financial firms are competent, honest, ethical and financially sound.

The Central Bank also found cases where firms had suspended or dismissed individuals for wrongdoing but had failed to report the issue to the Central Bank, as required.

“We have also observed a number of instances where individuals have not provided material information on their applications to the Central Bank for approval to senior roles,” they regulator said. “On occasions, applications have failed to disclose material facts which are either known to proposing firms, or would have been known if property due diligence of their proposed candidates had been disclosed.”

The Central Bank noted that it has fined firms in recent years, including Merrion Stockbrokers, Appian Asset Management and E-Services & Communications Credit Union, at least partly due to failings under its fitness and probity regime.