From top: The Central Bank in Dublin; Opening page of a letter from the Central Bank to the heads of financial institutions in Ireland
The Central Bank wrote a seven-page letter to the CEOs of financial institutions in Ireland about their obligations under the Fitness and Probity Regime introduced by the Central Bank under legislation in 2010.
Essentially, the letter reminds the CEOs that their responsibility to ensure staff adhere to fitness and probity laws does not stop after they hire a person – but that they must ensure staff adhere to these rules “on an ongoing basis”.
The letter states that while the obligations of individuals within the industry appear to be “well known”, firms appear to have a “less understanding” of these obligations.
The authors of the letter – Director General of Financial Conduct at the Central Bank Derville Rowland and Deputy Governor of Prudential Regulation at the Central Bank Ed Sibley – say that one issue of “particular concern” is due diligence on an “ongoing basis” in respect of certain employees who have a “controlled function” [CF].
The letter states:
“We have seen instances where serious issues have arisen which should have prompted a firm to ask itself if a particular person in a CF role was still ‘fit and proper’.
“In one example, an individual had a significant judgment registered against them, such that questions arose over that individual’s financial soundness, but the firm failed to take any steps to satisfy itself that the individual still complied with the standards.
“Similarly, we have seen examples where individuals have been criticised publicly by other regulators and/or the courts for past actions. However, their current firms have failed to take any steps to assess whether those individuals are still fit and proper, and it has been left to the Central Bank to intervene.”
In addition, the letter raises concerns about institutions not informing the Central Bank about individuals who’ve been dismissed for fraud.
“We also see instances where Firms have identified fitness and probity concerns about an individual and have taken steps to address these, but have failed to
report those concerns to the Central Bank.
“In some cases, the firms have gone so far as to suspend or dismiss the individuals for fraud but have neglected to report this to the Central Bank.
“In that scenario, the Central Bank is unable to consider an individual’s misconduct, in particular in respect of any future PCF [pre-approval controlled function] application that an individual might submit.
“To be clear therefore, where your Firm has any fitness and probity concerns regarding a person who is performing a CF role, and takes action on foot of those concerns, you must notify the Central Bank without delay.”
The letter also states that the Central Bank, under its ‘gatekeeper’ remit, is supposed to approve the promotion of people to certain senior positions in writing – after this approval is sought by the firm.
But, the letter states, some firms have not sought the Central Bank’s approval and, in certain cases, the individuals who were promoted “have been those roles for a considerable time“.
The letter adds:
“You, your board and any relevant committees play a critical role in ensuring that the right people are proposed as PCFs. It is crucial that you ask not merely whether a given candidate is competent, but also whether the individual acts with integrity at all times.”
The letter can be read in full here
Earlier: Nothing To See Here Ever
INM logo; Denis O’Brien (right) and former INM chairman Leslie Buckley
Further to an alleged data breach at Independent News and Media.
It’s being reported that INM has written to individuals who may have had their data searched.
David Murphy, of RTE, has seen one of these letters.
He told Claire Byrne on RTE’s News At One earlier:
Claire Byrne: “What does it [the letter] say?”
David Murphy: “Basically Clare, what it is is INM setting out the timeline of events, what it knew, what it didn’t know and it has also outlined the new information it got from the Office of Director of Corporate Enforcement which is hoping to appoint inspectors to investigate business affairs at Independent.
“So, in a nutshell, really what it says is that the letter says to people that their data may have been searched.
“Initially the company was informed that this search was looking for a long-term service contract but now it’s been informed by the Director of Corporate Enforcement that the search may have been more extensive and for a different purpose.
“And it says that there was a list of names and or people of interest and that the individuals who’ve received the letter were on that list.”
Murphy: “This is the 19, exactly.”
“The company says it doesn’t know if any searches were undertaken or for what purpose but it says, based on the limited information currently available to INM, it seems possible that there were searches done.
“The company said it didn’t know to whom any of the searches, search results, would have been provided.
“It says, in the letter, that information related to you may have been put at risk of an unauthorised disclosure which would have consisted of emails to and from INM and also digital files held on its servers where any reference to a named individual, as of October 2014.
Byrne: “So if you’re one of the 19, if your name popped up anywhere on their system, regardless, outside of your email exchanges, they’re saying, that’s included as well.”
Murphy: “That’s included. So it’s not just emails sent by an individual in INM, it’s also emails they would have received or emails sent by an external person who’s on the list going into INM, so you can see it’s actually quite broad in terms of the way the search could have been conducted.”
Byrne: “OK, and the email [letter] aswell firmly points the finger at who they believe was responsible here?”
Murphy: “That’s right so what it says here is very clearly that the information was provided to a third party service provider under the instruction of the then chairman of INM. Now Leslie Buckley, last Friday, who was the chairman at the time, issued a statement because a lot of this material has arisen from an affidavit which is being lodged in the High Court by the head of Corporate Enforcement Ian Drennan.
“And Mr Buckley has said that he is going to defend robustly each and every allegation and he also was very disappointed by the way in which this information had come into the public domain as opposed to being raised in court where it could be perhaps challenged by someone’s legal representative.
“But today he’s saying he’s not commenting on the letter.”
Byrne: “Ok, but we will hear more about this in five days time, if not before, but in five days time, we have that court hearing.”
Murphy: “So, in five days time, the Director of Corporate Enforcement is due to go into court and outline his reasons why he thinks inspectors should be appointed into INM. With any court case, you never really know, sometimes, they’re adjourned, but that’s the date that’s in the legal diary.”
Byrne: “OK, David Murphy, thank you very much for that.”
Listen back in full here
Mick Minogue writes:
This little crumpled heart beat blew against my foot as I walked down Camden Street yesterday. Must have been making its way since Friday night. No name, no number, just the question of an IBAN and the search to a salt n’ vinegar heart. Hopefully this lost lad makes the valuable lodgement.
An independent water commission? Is the “Great Irish Fudge” now being served up with mugs of Irish Water? This traditional political confection contains generous amounts of common and exotic nuts.
It looks inviting, tastes sweet at first, but has a sticky consistency, a bitter aftertaste and inevitably costs more than the initial price tag suggests.
Regularly repackaged to appeal to the whimsy of its target market, its familiar scent wafts once again from Ireland’s “can’t stand the heat” political kitchens. As any time-pressed chef knows, serving up a tried and tested favourite, when all that’s left on the menu are old chestnuts and red herrings, guarantees at least some measure of reprieve in the last-chance saloon.