On 9 March 2023, the President of Ireland signed the Central Bank (Individual Accountability Framework) Act 2023 (Act) into law.

Now that the Act has become law, regulated firms should review and progress their plans for implementation of the individual accountability legislation. The launch of the Central Bank's consultation on the individual accountability framework and SEAR and the publication of its draft implementing regulations and guidance gives firms a more solid basis for ramping up their IAF/SEAR implementation projects.

Individual Accountability Framework

The individual accountability framework aims to increase levels of individual and personal accountability and responsibility in the Irish financial services sector. The Act provides a legislative basis for the introduction, by the Central Bank, of an individual accountability framework comprising:

  • a Senior Executive Accountability Regime (SEAR),
  • standards of conduct for regulated financial service providers (RFSPs) and individual controlled function (CF) and pre-approval controlled function (PCF) holders in RFSPs
  • enhancements to the existing regime fitness and probity regime
  • increased enforcement powers for the Central Bank to facilitate the direct pursuit of individuals for contraventions of the conduct standards or responsibilities under SEAR.

The individual accountability framework is given legal effect by the Act and by regulations to be issued by the Central Bank (drafts of which are set out in Annex 1 of the Consultation Paper). The primary and secondary legislation will be supported by Central Bank guidance (drafts of which are set out in Annex 2 to the Consultation Paper).

Commencement of Act

On 1 March 2023, when the Act was passed by Dáil Eireann, the Minister for Finance, Michael McGrath, stated that all sections will be commenced as soon as possible, except for sections on SEAR, the conduct standards and the fitness and probity certification requirement. These sections are expected to commence following completion of the Central Bank's public consultation, which runs for a three-month period from 13 March 2023 to 13 June 2023.

We await publication of the Act and commencement orders.

Central Bank Consultation and Implementation Timeline

The Consultation Paper includes the Central Bank's proposals for draft implementing regulations and guidance and proposes the following implementation timeline.

Next steps

Now that the Act has become law, regulated firms should review and progress their plans for implementation of the individual accountability legislation. The launch of the Central Bank's consultation on the individual accountability framework and SEAR and the publication of its draft implementing regulations and guidance gives firms a more solid basis for ramping up their IAF/SEAR implementation projects.