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CBI Sets Out Expectations for Financial Services Firms

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In a move to ensure effective control of financial services entities, the Central Bank of Ireland (CBI) has outlined its expectations regarding the governance and oversight of these firms.

According to CBI guidelines, decision-making at board and committee level must take place within Ireland, accompanied by significant senior management presence with responsibility for financial control, compliance, and risk management. This ensures that the entity is effectively controlled from within the country.

Regulatory Framework

The CBI’s jurisdiction is based on the Central Bank Acts 1942-2018 (as amended), which provide a legislative basis for the bank’s authority. The Central Bank Reform Act 2010 introduced new standards of fitness and probity applicable to key individuals in financial services firms, while the Central Bank (Supervision and Enforcement) Act 2013 enhanced enforcement powers.

Principal Laws and Rules

Financial services firms are subject to various laws and rules, including:

• Central Bank Acts 1942-2018 (as amended)
• EU legislation, such as:
  • Capital Requirements Directive
  • Regulation
• Domestic Irish legislation, such as:
  • Investment Intermediaries Act 1995
• Guidance issued by EU bodies, such as:
  • European Supervisory Authorities

Scope of Regulation

The CBI regulates various areas, including:

• Authorisation and supervision of credit institutions (banks)
• MiFID II-authorised investment firms
• Non-retail investment firms
• Payments services
• E-money institutions
• Anti-money laundering and countering the financing of terrorism legislation

Additional Requirements

Regulated financial services firms are subject to additional requirements, including:

• Fitness and probity regime for individuals appointed to key positions
• Conduct of business supervision
• Minimum capital requirements
• Reporting requirements and regular review meetings
• On-site inspections
• Oversight by Irish regulatory bodies, such as:
  • Data Protection Commission
  • Financial Services and Pensions Ombudsman

Correct on Date

The information above is accurate as of January 26, 2021.