Amendments to List of PCFs

PUBLISHED: 11th May 2022

Photo to illustrate article

On 10 May, the Central Bank of Ireland (the Central Bank) published a revised timescale and guidance for the re-designation of PCF-2s into PCF-2B (Independent Non-Executive Director) (INED).  A summary of the requirements is as follows:

  • Existing PCF-2s: are being re-designated as PCF-2A (Non-Executive Director) (NED).
  • Notification of PCF-2B Re-Designations: boards must notify the Central Bank of proposed PCF-2B designation(s), and confirm they have undertaken the relevant due diligence on INEDs to assess independence.
  • The In Situ Processthe “PCF In Situ Return – 2022 Regulations” will open via the Central Bank’s Online Reporting System (ONR) on 18 May 2022, and the in situ return template and guidance have been posted to the following location on the Central Bank’s website.  The Central Bank is allowing six weeks for submissions and the revised deadline is 30 June 2022.
  • New Applications: IQs submitted on the ONR should specify whether the application is for PCF-2A or PCF-2B, and independence should be considered as part of the Fitness & Probity due diligence conducted prior to submission of the IQ.
  • PCF-2 Applications in Progress: for applications not yet approved, an email should be sent to quoting the IQ Reference and requesting for the IQ to be unlocked so that the role can be amended to PCF-2B (subject to the assessment of independence having been conducted).  Please note that the Central Bank cannot liaise with anyone other than the Point of Contact or Proposer as listed in an IQ application.

Assessment of Independence:  

There must be documentary evidence that an underlying assessment was carried out by the board in respect of a PCF-2B’s independence.  There are a number of ways in which this could be documented and approved.  Ultimately, it is for the board to collectively agree the appropriate approach, and to discuss and make the relevant determination.  A suggested checklist of questions prepared by LK Shields is available on request.  There is no requirement to submit this due diligence to the Central Bank but it should be available on request, along with any other supporting evidence. 

Actions to Re-designate In-Situ PCF-2s as PCF-2B:

  1. Boards must conduct an assessment of independence on their INEDs, to be documented and approved in advance of notifying the Central Bank of PCF-2B re-designations.  This could be done in the following ways:
    • formally at a board meeting in advance of the deadline (with a checklist or spreadsheet included in board packs for this purpose); or
    • by completion and signature of a checklist, which could be subsequently formally ratified at the next board meeting.
  2. The Business Administrator within the RFSP must (i) upload the completed “PCF In-Situ Return File” to the ONR under the “PCF In-Situ Return – 2022 Regulations” option, (ii) provide confirmation that the information is correct by selecting the tick box and stating the necessary due diligence has been performed; and (iii) submit the file and confirmation, by 30 June 2022.   


This memorandum provides an update in relation to the Central Bank’s recent amendments to the list of PCFs, with specific focus on the segregation of PCF-2.

In September 2021, the Central Bank issued its Notice of Intention to amend its list of PCFs containing proposals to create, remove and re-designate certain PCF roles. The Central Bank invited and considered feedback from industry and subsequently published a Feedback Statement along with the Central Bank Reform Act 2010 (Sections 20 and 22) (Amendment) Regulations 2022 in which the list of PCFs is revised as follows:

  1. the segregation of PCF-2 into:
  2. the introduction of PCF-52 (Head of Anti-Money Laundering and Counter Terrorist Financing);
  3. the removal of PCF-15 (Head of Compliance with responsibility for Anti-Money Laundering and Counter Terrorist Financing Legislation);
  4. the expansion of PCF-16 (Branch managers of branches established outside the State (to include managers of non-EEA branches));
  5. the removal of PCF-31 (Head of Investment); and
  6. the title of roles relating to the chairing of a board or committee (PCF-3 to PCF-7) have been amended to reference “Chair” as opposed to “Chairman”.

With the exception of the removal of PCF-31 (only relevant to investment firms), the amendments to the PCF list are applicable to all Irish Regulated Financial Service Providers (RFSPs) other than credit unions.  

The segregation of PCF- 2

This amendment was proposed in the interest of greater clarity and for record-keeping purposes only.

The Central Bank does not envisage any impact on the functioning of the board or on the interaction between the Central Bank’s Fitness and Probity Regime and its Corporate Governance Requirements, and Irish company law requirements, given that it is an existing practice for directors to be categorised as NEDs or INEDs. 

Required Action - Assessment of Independence in PCF-2A and PCF-2B Roles

All existing PCF-2s will be automatically re-designated as PCF-2A.

Boards will need to assess and consider whether any members of the board should be designated as PCF 2-B.

In Situ Process:

  • The re-designation of in situ PCF-2s to PCF-2A has not yet occurred, although once completed they will be noted as amended in line with the regulations; i.e. with effect from 5 April 2022.
  • The ‘PCF In Situ Return – 2022 Regulations’ will open via the ONR on 18 May 2022, and the in situ return template and guidance for same has been posted to the Central Bank website here. RFSPs will be given six weeks from the date on which the process opens to submit their return(s).   

Accordingly, the original 3 June 2022 deadline for submissions (per the Central Bank’s Feedback Statement) has been pushed out to 30 June 2022, by which time RFSPs must notify the Central Bank which INEDs, if any, should be designated as PCF-2B, and confirm that they have undertaken the relevant due diligence to assess independence. 

The INED – Consideration of “Independence”

When assessing the independence of a NED, the board should take into account everything from previous, and where relevant, current employment to business relationships, directorships, and objectivity.

The Central Bank considers the use of the definition of, and criteria for use in assessing, director independence contained within the Central Bank’s Corporate Governance Requirements[1] (for Credit Institutions, for Insurance Undertakings and for Investment Firms and Market Operators) (the Corporate Governance Requirements) as best practice. However, the Central Bank acknowledges that these Corporate Governance Requirements do not apply to all sectors and has confirmed that existing definitions and criteria in sectoral requirements, codes and guidelines can be used when assessing independence.

Whilst there are a number of sources and materials to consider, to assist in the assessment and determination of whether an individual is to be designated as an INED in respect of an RFSP, we have set have set out a summary (targeted primarily at fund boards) at Appendix 1 of the definitions and criteria from:

  1. the Corporate Governance Requirements;
  2. the Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body and key function holders (the ESMA/EBA Guidelines);[2] and
  3. the IF Corporate Governance Code for Collective Investment Schemes & Management Companies (the Code).[3]

What Next?

Where an existing PCF-2 is categorised as an INED, the RFSP will be required to notify the Central Bank of that individual’s PCF-2B designation, and submit confirmation of the due diligence undertaken by the board in its assessment of the independence of the individual.

The assessment should be documented and approved by the board in advance of making the return by the relevant deadline (30 June 2022).  

Any new directorship appointments within RFSPs will need to be categorised as either PCF-2As or PCF-2Bs, subject to the aforementioned assessment of independence.

For more information, please contact Katrina Smyth at or Mina Dawood at




For more information, please contact Katrina Smyth at or Mina Dawood at

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