Ireland secures agreement to draft Central Bank (Individual Accountability Framework) Bill

Ireland’s Minister for Finance has received agreement from his Cabinet colleagues to approve the drafting of the Central Bank (Individual Accountability Framework) Bill.

Ireland’s Minister for Finance has received agreement from his Cabinet colleagues to approve the drafting of the Central Bank (Individual Accountability Framework) Bill.

There are four main aspects to the proposed Heads along with necessary technical changes to existing legal processes. All of these make up the Individual Accountability Framework.

This draft legislation provides for the introduction of a Senior Executive Accountability Regime (SEAR), which places obligations on firms and senior individuals within them to set out clearly where responsibility and decision-making lies.

SEAR will apply to those in management roles within credit institutions (excluding credit unions), insurance undertakings, investment firms which underwrite on a firm commitment basis and/or deal on own account and/or are authorised to hold client monies/assets, and third country branches of the above.

The introduction of conduct standards will give the Central Bank powers to set and impose binding and enforceable obligations on all Regulated Financial Service Providers (RFSPs) and individuals working within them with respect to expected standards of conduct.

SEAR’s focus is on preventing misbehaviour or mismanagement by senior management. By requiring individual accountability from senior management, supported by enforcement powers, there is an incentive for senior management to comply with financial services law.