The Financial Regulator issued a consultation paper on proposals for a common fit & proper test for directors and managers of all financial services firms in February 2005. Having analysed the responses, the Regulator has re-issued its original consultation paper, in an amended form, and commenced another, shorter consultation process. This process is due to be completed by the end of April 2006, before the final regime is implemented in June 2006.  | | IFSRA building |
In its earlier consultation paper, the Regulator said that ‘approved persons’ would need to update the Individual Questionnaire (IQ) annually, and that even previously approved people would be subject to the IQ. The IQ covers the person’s qualifications and experience, asks questions about any professional censures or criminal convictions, the conduct of the person’s financial affairs and the person’s financial history, including any involvement, either personal or professional, with insolvencies or bankruptcies. The IQ also seeks information about the person’s employment history since leaving full time education.
The industry expressed its concern over this detail, with Financial Services Ireland saying, ‘FSI believes that the depth and detail of the obligations imposed on candidates and companies in the proposed framework are far too onerous and go well beyond what is required in other jurisdictions’.
The Regulator appears to have taken on board such concerns, in its latest document, saying, ‘there will be no requirement for regular formal updates of the information provided in the Individual Questionnaire (IQ). However, if there is any material change at any time to the information provided to the regulator at the time of entry, such change should be provided to the Financial Regulator immediately. In the same spirit, existing Approved Persons will not be asked to complete the new IQ’.
The IQ has also been considerably shortened, and has been customised so that parts of the form need only be filled by particular sectors or industry types (e.g. wholesale and retail).
Moreover, the Regulator has shortened the amount of employment history ‘approved persons’ now need to give, to the last 10 years. ‘However, material information falling outside that period should be disclosed’.
The regulator has also clarified who should be subject to the fit and proper test:
1. The Board of Directors, including the executive members of the Board and senior managers of the larger institutions;
2. In the case of small sole trader firms or unincorporated firms, those who direct the affairs of the firm (usually the owner/manager).
All of those to be covered by the test will be referred to as ‘Approved Persons’.
To see the full document go to www.financialregulator.ie |
