Public 'put at risk' by financial rules failure
Central Bank critical of firms
THE public is being put at risk as some banks and financial services firms flout fitness and probity rules designed to protect them.
The Central Bank has warned of a "number of instances" of failures to ensure that senior executives appointed to key roles in regulated financial firms are competent and honest.
It has cautioned the regulated entities - which include banks, credit unions, insurance firms and investment firms - to toe the line or face consequences. It wants to see "demonstrable change" in how firms and individuals are engaging with the process.
In a damning assessment, the Central Bank said it identified some cases where individuals have not provided material information in their applications to the Central Bank for approval for senior roles in financial firms.
"On occasion, applicants have failed to disclose material facts which are either known to proposing firms, or would have been known if proper due diligence of their proposed candidates had been conducted," it said.
There is also evidence that some firms have identified fitness and probity concerns about an individual who has been subsequently suspended or fired, but the concerns and actions have not been reported to the Central Bank.
Derville Rowland, the Central Bank's director-general for financial conduct, said the fitness and probity scheme introduced in 2010 is "central to our role as a gatekeeper for the financial system".
She added that the regime is "critical to the protection of the public interest and to ensuring that there is public trust and confidence in the financial system".
But some regulated firms have been ignoring them.
"Staff must be competent, but must also act with integrity at all times," Ms Rowland warned financial firms.
"Where we see evidence that firms are falling short in their obligations, we will take appropriate action, including removing individuals from those roles."
The Central Bank has written to all regulated financial firms reminding them of their legal obligations under the fitness and probity rules.
"We expect that firms review the issues set out in the letter and, together with their boards, review their own fitness and probity policies, procedures and practices and address any shortcomings," said Ms Rowland.
"Firms should be able to demonstrate how the issues we have raised have been considered, and to explain and evidence any remedial actions taken. We expect to see a demonstrable change in how firms and individuals engage with the process over the coming period."
The Central Bank has also warned UK investment funds selling into Ireland not to market products here or in the rest of the EU after Brexit.