Globally, there has been an increasing move towards individual accountability, for example, in the UK, Australia, Singapore and Hong Kong. Over recent years in Ireland, a lack of trust in the financial services industry, and in particular within the banking industry, has heightened the need for clear responsibility and accountability within organisations. In July 2018, the Central Bank of Ireland announced that it would introduce an Individual Accountability Framework (“IAF”) in Ireland. The Heads of the Central Bank (Individual Accountability Framework) Bill were released in July 2021. The draft legislation was published on 28 July 2022. The Bill will be debated when the Dáil returns in September 2022, and once it is enacted, the Central Bank has indicated that a consultation process will follow. The IAF will then be implemented in late 2023.

The proposed framework will result in significant changes across the entire organisation impacting all business lines and at all levels. The Central Bank said that it expects firms to comply with the spirit and not just the letter of the law, to drive positive cultural change across organisations. 

The key elements of the proposed Framework are:

  1. A Senior Executive Accountability Regime (SEAR) for individuals occupying prescribed Senior Executive Functions (SEFs). The Central Bank has proposed that, in the first instance, this will apply to credit institutions, insurance undertakings, certain investment firms, and third country branches. It has stated that it is likely to cover board members, executives reporting directly to the board, and heads of critical business areas
  2. Common conduct standards for staff, with Additional Standards for senior management as well as overall Standards for Business focussing on customers, market conduct, integrity, and controls
  3. Enhancement of the current Fitness and Probity Regime, including the introduction of a Certification Regime, directed at individuals occupying Control Functions (“CFs”) under the current F&P Regime
  4. A unified enforcement process to sanction any breaches of the conduct standards.  The CBI will be able to bring enforcement against individuals directly

We expect the consultation process to commence in late 2022, following enactment of the legislation. 

Read our insights on the Individual Accountability Framework (“IAF”):

Draft legislation to introduce these requirements is expected in Q3 2022


How we can help

  • KPMG has experience in leading large-scale regulatory change programmes within Ireland and have experience in implementing similar regimes across the globe, particularly in the UK (Senior Manager and Certification Regime) and Australia (Banking Executive Accountability Regime). Members of our Irish team were involved in design and implementation for large, medium and small scale organisations. We will use our knowledge within these jurisdictions, coupled with our extensive knowledge of the Irish financial services market, to support firms in this process.
  • Our team is supplemented by our inhouse legal team who can assist clients with any HR or contractual issues as a result of the legislation.

In addition, to help clients implement and maintain these obligations, we are using technology (our Accountability Manager tool) to manage and track all relevant SEAR requirements. This technology assists clients in ensuring that they are compliant (day 1 and into the future) with obligations as a result of the new legislation as part of implementation and in BAU. This technology solution can be tailored to individual client requirements and can be integrated with your HR system to ensure key operational changes impacting the regime are addressed in a real-time manner.  

Why KPMG?

With KPMG, you can have confidence that you’re partnering with the best team in the market, with unrivalled experience, insight and commitment. We incorporate the latest global thinking into the provision of our services in the financial services sector and provide best practice advice.

Our team - get in touch

SEAR - our insights

Conduct Standards - our insights

Fitness and Probity - our insights

Individual Accountability Framework - our insights

Visit pages related to Individual Accountability