Update from the Central Bank of Ireland / Changes to PCF roles
12th May 2022
This blog explores a recent update from the Central Bank of Ireland (the “Central Bank”) regarding changes to the list of pre-approval controlled functions (“PCFs”) applying to Irish Regulated Financial Service Providers (“RFSPs”) other than credit unions
Summary of changes
The PCF list has been updated to include the following changes:
- Expansion of PCF-16 (Branch manager in other EEA countries)
The PCF-16 role, up until now, has applied to managers of branches that are located in other EEA jurisdictions. This is now being expanded to include jurisdictions globally, including the UK, due to the number of branches in non-EEA jurisdictions.
PCF-16 holders are subject to supervision by the fit and proper requirements of the host regulator responsible for the supervision of the branch, as well as by the Central Bank.
RFSPs now captured by the expansion of PCF-16 (i.e. branches outside of the EEA, including in the UK) must submit confirmation of their assessment in respect of individuals appointed as branch managers of non-EEA branches to the Central Bank by 3 June 2022.
- PCF-2 now split into two categories
PCF-2 (non-executive director) is now being separated into two functions:
- PCF-2A (Non-Executive Director); and
- PCF-2B (Independent Non-Executive Director).
The new PCF-2B category will not result in any new or amended requirements regarding the appointment of independent non-executive directors (“INEDs”).
All individuals currently occupying PCF-2 will be automatically redesignated as PCF-2A.
Where an existing PCF-2 is an INED, RFSPs will be required to notify the Central Bank of the individuals’ status as PCF-2B by submitting a confirmation of any PCF-2B designations by 3 June 2022.
- Compliance and AML/CTF: Split of PCF-15 into PCF-12 and PCF-52
The Central Bank will abolish PCF-15 (Head of Compliance with responsibility for Anti-Money Laundering (“AML”) and Counter-Terrorist Financing (“CTF”) Legislation).
The applicable functions in the area of compliance and AML/CTF will now be as follows:
- PCF-12 (Head of Compliance), which was already in existence; and
- PCF-52 (Head of Anti-Money Laundering and Counter-Terrorist Financing Compliance) – a new function.
The Central Bank has determined that PCF-52 is a necessary amendment to introduce an AML-specific compliance role.
It is the responsibility of the RFSP itself to review its functions to determine whether the role meets the substance of PCF-52, noting that it is possible that an RFSP may not require a specific PCF-52. An individual can hold more than one PCF role, e.g. PCF-12 in addition to PCF-52. If a PCF-52 role exists, confirmation of the assessment must be submitted to the Central Bank by 3 June 2022. Any new appointments of individuals to carry out PCF-52 following 5 April 2022 must be approved by the Central Bank.
Individuals currently performing PCF-15 roles must notify the Central Bank by 3 June 2022 regarding how that individual’s role should now be designated, i.e. whether this will be PCF-12, PCF-52 or both.
- Investment firms: removal of PCF-31 (Head of Investment)
The PCF-31 role has now been removed. The Central Bank has found that this role overlaps with PCF-30 (Chief Investment Officer). As PCF-30 is more frequently selected, there is no need to maintain the use of the PCF-31.
No action will be required from RFSPs in respect of this update. Individuals holding the role of PCF-31 will be designated as PCF-30 role-holders automatically.
General Next steps
A process for submitting the confirmations referred to above will be available shortly on the Central Bank’s Online Reporting (“ONR”) System and an individual questionnaire (“IQ”) will not be required to be completed.
For additional queries in respect of the above, please do not hesitate to reach out and contact a member of our Legal Services Division.