TOUGH new rules to ensure finance professionals are up to the job have been delayed by up to 15 months after industry heavyweights warned the original timeline was "extremely challenging if not impossible".
The Irish Independent has also learnt that the scope of the new 'fitness and probity regime' has been narrowed significantly following protests from banks, insurers and other finance firms.
The news comes four months after Central Bank deputy governor Matthew Elderfield unveiled proposals to vet 'control function' in finance firms.
At the time, the rules were due to come in force on September 1. In a statement yesterday, the Central Bank confirmed that the new rules would be published on September 1, but would be phased in.
Senior officials already working and new senior appointments will come into the new system by December 1, new appointments to less senior roles will be covered by March 1, 2012, and incumbent staff in less senior positions will follow that December.
In a statement, the Central Bank said the extended timeline was "to allow institutions the time to introduce the necessary internal controls and procedures" to comply with the new regimes.
The Irish Bankers Federation said the original timeframe was "extremely challenging if not impossible". Finance giants also railed against the scope of the proposals, which appeared to encompass a vast array of posts including call centre manager and other roles not traditionally thought of as 'control functions'.
HSBC said the definition of 'control function staff' in customer-facing roles was "very broad, and in some instances would include the majority of employees of a firm", while Davy said there was a "real risk firms may reduce the number of staff working in client-facing roles" if the proposals were implemented as drafted.
In yesterday's statement, the Central Bank confirmed that the "control function which relates to customer facing activities will be narrowed" and the Irish Independent understands call centre managers will now fall outside the rules' remit. The new 'fitness and probity' regime also encompasses a review of the performance of all bank bosses who were at the helm of their institutions when they were forced to seek bailouts. The delay in implementation of the broader rules will have no impact on that review, which could see bank bosses sacked if they were found to have "contributed" to their institutions' demise. A spokeswoman for the Central Bank yesterday confirmed letters were sent to 50 bank directors on June 8 asking them whether they intended to remain in office beyond January 1. "The Central Bank is still at the preliminary stage of reviewing all incumbent directors who plan to stay in post before deciding whether to launch a formal statutory investigation with respect to any particular individuals," she added.