CBI Sets Out Expectations for Financial Services Firms Seeking Authorisation

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In a move aimed at ensuring effective control and oversight of financial services firms operating in Ireland, the Central Bank of Ireland (CBI) has outlined its expectations for entities seeking authorisation. The guidelines cover key areas including organisation, business plan, financial information, initial capital and own funds, nature of services proposed, operational procedures and processes, outsourcing arrangements and oversight, internal governance, controls, risk management, and operational resilience.

Key Expectations

• Effective Control: Effective control of the entity must lie within Ireland, with decision-making at board and committee levels taking place in-country. A significant senior management presence with responsibility for financial control, compliance, and risk management is also expected.
• Compliance: Financial services firms must comply with:
  • Central Bank Acts 1942-2018
  • Domestic Irish legislation
  • EU legislation
  • Secondary legislation
  • Codes issued under the Central Bank Acts
  • Guidance from EU bodies such as the European Supervisory Authorities
• Capital Requirements: Firms must hold a minimum level of capital specified in relevant EU and domestic legislation, submit capital returns to the CBI on a periodic basis, and maintain prudential standards through reporting requirements, regular review meetings, and on-site inspections.

Regulatory Framework

The CBI’s jurisdiction is based on the Central Bank Acts 1942-2018, which provide the legislative basis for its authority. The Central Bank Reform Act 2010 created a new structure for financial regulation in Ireland, introducing new standards of fitness and probity applicable to key individuals in financial services firms.

Scope of Regulation

Financial services firms are subject to: + Authorisation requirements + Conduct of business supervision + Prudential standards + Anti-money laundering and countering the financing of terrorism legislation + Regulation by other Irish bodies, including: - Data Protection Commission - Financial Services and Pensions Ombudsman - Competition and Consumer Protection Commission - Professional regulatory bodies such as the Law Society and the Institute of Bankers

Additional Requirements

In addition to CBI oversight, financial services firms are subject to oversight from other Irish regulatory bodies. The CBI’s guidelines aim to ensure that financial services firms operating in Ireland are subject to robust oversight and regulation, protecting consumers and maintaining market stability.

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