In February this year the Central Bank of Ireland (the “Central Bank”) issued a notice of intention to make amendments and additions to the list of Pre-Approved Controlled Functions provided for in the Central Bank Reform Act, 2010 and subsequent regulations. The Central Bank has now published the Central Bank Reform Act 2010 (Sections 20 & 22) (Amendment) Regulations 2020 which amends the Central Bank Reform Act 2010 (Sections 20 and 22) Regulations 2011 (S.I. No. 437 of 2011) as amended by the Central Bank Reform Act 2010 (Sections 20 and 22) (Amendment) Regulations 2015 (S.I. No. 545 of 2015). The changes feature three new PCF roles and the splitting out of the PCF-39 Designated Person function into 6 different areas in line with the Central Bank’s requirements on Fund Management Company Effectiveness (CP 86).
Splitting out of PCF-39
The role of Designated Person under PCF-39 has now been split out to six sections with each new role (A-F below) covering a separate managerial function under CP86. Current Designated Persons in situ will not be required to seek Central Bank approval for the new range of roles under PCF-39. The six new PCF-39 roles are as follows:
PCF-39A: Designated Person with responsibility for Capital and Financial Management
PCF-39B: Designated Person with responsibility for Operational Risk Management
PCF-39C: Designated Person with responsibility for Fund Risk Management
PCF-39D: Designated Person with responsibility for Investment Management
PCF-39E: Designated Person with responsibility for Distribution
PCF-39F: Designated Person with responsibility for Regulatory Compliance
Management Companies and Self-Managed Investment Funds are required to submit a list of the individuals performing each of the PCF-39 roles (A-F) through an ‘In Situ’ return to the Central Bank. This process will commence after the Amending Regulations 2020 came into effect (5th October 2020) and a period of six weeks will be provided to submit the In Situ return. Therefore, the relevant filing must be made by 16 November 2020.
PCF-49
Following from its notice of intention on 25th February 2020, the new Regulations have introduced three new Pre-Approved Controlled Functions.[1] Of relevance to the Funds Industry is PCF-49 which concerns the new role of Chief Information Officer.
The introduction of such a role signifies the growing importance of and reliance on information technology in financial services. Regulated Financial Service Providers (‘RFSPs’) (other than credit unions) will be required to consider this PCF role and the Central Bank expects the role will typically apply to “the most senior individual at the RFSP with responsibility for IT matters”. In determining the circumstances where the PCF-49 will likely be necessary, the Central Bank has provided the following sample situations where it expects the role to apply:
- The RFSP has a PRISM impact rating of High or Medium High.
- IT is a key enabler or core element of the RFSP’s business model.
The Central Bank has noted that the onus will be on the RFSP itself to determine if its IT function meets the substance of a Chief Information Officer role.
Next Steps
Carne will be in contact with our clients to assist them with the ‘In Situ’ return which is due by 16 November 2020.
[1] PCF- 50 Head of Material Business Line & PCF-51 Head of Market Risk concern Banking
