Recent enforcement actions have renewed focus on the Central Bank of Ireland (“CBI”)’s proposals for an Individual Accountability Framework (“IAF”) and Senior Executive Accountability Regime (“SEAR”) originally proposed in 2018. The Irish government has confirmed that the legislative agenda will address the proposed legislation in Q3 2021. We expect that it will cover banks, insurers and medium to high risk investment firms.
Given that the proposals have been known since July 2018, and that the CBI has released the results of its thematic inspections on Fitness and Probity (“F&P”) we expect that there will not be a significant lead-in time allowed for implementation. Therefore, banks, insurers and medium to high risk investment firms should be preparing now.
Are you fully meeting the CBI’s expectations on Fitness and Probity compliance, as outlined in its Dear CEO letters of April 2019 and November 2020?
Communication and Planning:
Have the CBI Individual Accountability /SEAR proposals been communicated appropriately? Have you identified your steering committee and created a project plan?
Have you conducted an impact assessment on how the Individual Accountability requirements will affect your business? Have you identified potentially impacted documentation?
Are you aware of the weaknesses or deficiencies in your underlying control environment? Are you satisfied with your outsourcing control environment and third party risk management?
Do you understand your governance structures and are these clearly documented (including any overseas entities where significant influence exists)? Have you started to look at the roles and responsibilities of Senior Managers?
Do you understand the concept of “reasonable steps” and have you the appropriate frameworks and governance in place to demonstrate that “reasonable steps” are taken in the event of a potential regulatory breach?
KPMG’s Risk and Regulatory Consulting team comprise of experts in Fitness & Probity, Conduct Risk, UK SMCR and Australian. SMCR and Australian BEAR specialists who have assisted clients in the design and implementation of individual accountability regimes in the UK and Australia.
Our team has unparalleled experience in financial services risk and regulation. We can help firms to understand the implications of the CBI’s Dear CEO F&P letters in April 2019 and November 2020, their obligations under the IAF and how to practically implement any changes into the existing business model in order to ensure the requirements are properly embedded and remain fit for purpose.
Technology changes will likely be required to support the regime including enhancements to as-is systems to ensure an interlock with platforms introduced to administer the regime. We can provide BAU support and manage the on-going requirements as a service using our bespoke technology solution that is adaptable for your needs.
We can assist you with the design and implementation of the regime across the four pillars using the output of a gap analysis. This includes target operating model design and implementation.
We can assist you to ensure that you are in adherence with the new requirements prior to implementation or post implementation, leveraging our experience with the UK SMCR, Australian BEAR/FAR and current CBI F&P regime.
COVID-19 is challenging leaders like never before. To find out more about how KPMG perspectives and fresh thinking can help you focus on what’s next for your business or organisation, please get in touch with our team below. We’d be delighted to hear from you.