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Central Bank of Ireland (“CBI”) publishes new Fitness and Probity Interview Guide

  • Ireland
  • Financial services and markets regulation
  • Financial services disputes and investigations

10-06-2021

On 10 June 2021, the CBI issued a new Fitness and Probity Interview Guide (“Guide”). This Guide provides practical guidance for individuals who may be interviewed as part of an assessment by the CBI of their fitness and probity in the context of their pre-approval controlled function (“PCF”) application process.

Introduction

Under the Central Bank Reform Act 2010  (“2010 Act”), a regulated financial services provider may not offer to appoint an individual to certain specified senior roles (so-called PCF roles) without the prior written consent of the CBI. For certain key positions in a significant credit institution, prior consent of the European Central Bank is required – the Guide states that it only applies to the CBI prior approval process and not to the separate European Central Bank approval process.

As part of the PCF application process, applicants must complete and submit to the CBI an Individual Questionnaire (“IQ”) and other documentation evidencing their fitness and probity for the PCF role in question.

It must always be borne in mind that it is a matter for the applicant to satisfy the CBI of their fitness and probity for the role. Under the 2010 Act, the CBI may refuse to approve the appointment of an individual to a PCF role where (i) the CBI “is of the opinion” that the applicant is not of such fitness and probity for the role in question or (ii) the CBI is “unable to decide on the basis of the information available to it”, whether the individual is of such fitness and probity.

The CBI has, in recent years, made considerably increased use of interviews of individual applicants as a means of delving in more detail into the fitness and probity of applicants. The experience can be very stressful and challenging for individuals.

The Guide – key points   

  • The CBI routinely interviews applicants for certain PCF roles, eg the Chair and CEO in higher impact firms. Our experience is that the CBI is also reasonably likely to interview PCF applicants who previously held an influential role in a regulated financial service provider that has been the subject of a significant CBI investigation and/or sanction.
  • The CBI carries out two different types of PCF interviews:

- “Assessment interview”: This is the more frequent type of interview. It typically lasts about 60-90 minutes and the CBI interviewers are likely to be from the CBI supervisory division that supervises the proposing firm. The interviewee will be informed in advance of the interview of the types of topics that are likely to be covered at the interview (these are likely to be wide-ranging and high-level) and the names of the CBI interviewers (together with date, time and location of the interview). The interview will usually be wide-ranging in scope. It is not recorded.

The individual may be approved by the CBI following that interview or may be invited to a “specific interview”.  

- “Specific interview”: The CBI will proceed with this type of interview if it has specific potential concerns about the fitness and probity of the individual that it wishes to probe (it does not necessarily need to be preceded by an assessment interview). The interviewees will include representatives from the CBI’s Enforcement division and the interview will be recorded. The duration of these types of interview will depend on the particular circumstances. Our experience is that they can last for at least most of a day. Applicants may bring a legal or other representative with them to this interview.

Applicants may be provided with documentation by the CBI in advance of the interview and invited to comment on the documentation at the interview. Our experience is that individuals may also be presented with documentation at the interview and invited to comment on it.

Following the specific interview, the individual may be approved by the CBI. Alternatively, the CBI may seek further information before reaching a decision or may issue a “minded to refuse” letter, in which it sets out its preliminary opinion that the application should be refused and invites submissions on this preliminary opinion before making a final decision.

A decision refusing the application is appealable to the Irish Financial Services Appeals Tribunal.

- For either of these two types of interview, the Guide states:

“You should not read directly from a script or pre-prepared answers during an interview. You may only refer to notes intermittently as a prompt during an interview.”

  • The proposing firm is the CBI’s point of contact for the application, as it is for the regulated firm to seek the CBI’s approval for the PCF appointment. Accordingly, all CBI communications about the PCF application will in general include the firm.

Conclusions

Regulated financial services firms and applicants for PCF positions must accept that PCF interviews are becoming an increasing feature of the PCF application procedure, in particular for the most senior PCF positions in higher-impact firms and for individuals who previously had an influential role in a regulated firm that has been the subject of a significant CBI investigation and/or sanction.

PCF applicants need to prepare meticulously for these interviews, in order to demonstrate to the satisfaction of the CBI their fitness and probity for the role.

For further information about the CBI’s fitness and probity process and how we can assist you with this process, please contact: