November 2016 - IFSAT decision on Fitness & Probity
IFSAT Upholds CBI decision under Fitness & Probity
The Central Bank Reform Act 2010 (“the 2010 Act”) gave the Central Bank a consolidated power to approve senior appointments to regulated firms and powers to investigate, suspend, or prohibit persons from the financial services industry where concerns arise about their fitness and/or probity.
On 24 October 2016, the Irish Financial Services Appeals Tribunal (“IFSAT”) upheld a decision by the CBI to refuse an applicant for authorisation as a sole trader retail intermediary. Matters relevant to the refusal by the CBI included:
- The applicant had failed to satisfy the Central Bank as to his knowledge of the business of a retail intermediary, and also failed to demonstrate a clear and comprehensive understanding of the legal and regulatory obligations applicable to a retail intermediary;
- A retail intermediary firm, of which the applicant was formerly a director, failed to comply with the Central Bank’s requirements in relation to the online reporting of regulatory returns. The firm also failed to submit a list of pre-approval controlled functions (“PCFs”) to the Central Bank, and to confirm that it had carried out due diligence in relation to the persons performing those PCFs, as required under the Central Bank’s fitness and probity regime;
- The applicant failed to investigate and take action in relation to allegations he had made of irregular conduct by a co-director of his, namely allegations that his co-director had forged his signature. Neither the Central Bank nor IFSAT made any findings of fact in relation to these allegations.; and
- The firm, of which the applicant was formerly a director, was convicted in the District Court for failing to file an annual return with the Companies Registrations Office, as required under company law.
The Central Bank sought and was awarded its costs in the matter.