The Central Bank of Ireland (“CBI”) UCITS Regulations, AIF Rulebook requirements and Fund Management Companies – Guidance 2016 (CP86) require that the board of directors of each management company and self-managed fund be responsible for the performance of six managerial functions. Under CP86, the CBI provides detailed guidance on the role of designated persons. It makes clear the ultimate oversight role of directors and identifies that designated persons are responsible for monitoring and control of each of the six managerial functions on a “day-to-day” basis.
In 2010, the CBI introduced the Fitness and Probity Regime under the Central Bank Reform Act 2010 (“the 2010 Act”). Under the 2010 Act, the CBI operates a gatekeeper regime to assess whether persons who perform pre-controlled functions (“PCFs”) are fit and proper. The functions of executive and non-executive directors fall under PCF-1 and PCF-2 respectively while the function of a designated person falls under PCF-39. In 2019, the CBI issued “Dear CEO” letters to regulated firms to remind them of their obligations under the Fitness and Probity regime.
On February 25th 2020, the CBI issued a notice of intention to split PCF-39 into six new PCF roles aligned to the specific managerial functions as follows:
- PCF-39A – designated person with responsibility for capital and financial management
- PCF-39B – designated person with responsibility for operational risk management
- PCF-39C – designated person with responsibility for fund risk management
- PCF-39D – designated person with responsibility for investment management
- PCF-39E – designated person with responsibility for distribution
- PCF-39F – designated person with responsibility for regulatory compliance
The CBI has given industry stakeholders until March 26th 2020 to provide feedback on this proposal.
Under the amended rules, persons in situ will not be required to seek approval from the CBI to continue to perform one of the new PCF roles. Regulated firms will however be required to complete an assessment that a PCF holder complies with the Fitness and Probity requirements (as required under Section 21 of the 2010 Act). Regulated firms will have six weeks to provide these confirmations after the amended rules come into effect
Download your copy of Central Bank of Ireland – Split of the Designated Person (PCF-39) Role here
KB Associates Services
KB Associates provides a range of services to investment funds including:
- The provision of third party management company services
- The provision of designated person services
- The provision of general operational and compliance support services to both UCITS and AIFMD compliant structures
If you would like to discuss any items in this document or KB Associates’ services in general, please contact:
- Mike Kirby (+353 1 667 1980, firstname.lastname@example.org)
- Andrew Kehoe (+353 1 613 6396, email@example.com