On 28 July 2022, the Central Bank (Individual Accountability Framework) Bill 2022 (the Bill) was published by the Department of Finance (here).
The Bill, which establishes the Senior Executive Accountability Regime (SEAR) was brought forward to Cabinet on Monday, 4 July 2022. The Bill must now come before the Oireachtas to be approved by the Dáil and Seanad before it can be enacted.
The Minister for Finance, Paschal Donohue, has previously stated that SEAR :
“… is a key element of the Bill, which will drive positive change in terms of culture, greater delegation of responsibilities and enhance accountability while simplifying the taking of sanctions against individuals who fall short in their financial sector roles.”
SEAR will set out additional standards and responsibilities for senior financial executives. It is due to apply to around 150 in-scope credit institutions, insurance undertakings and investment firms. Its application may be extended to additional firms over time.
The Bill was published together with an Explanatory Memorandum (here). The Bill contains information on the four pillars of the Individual Accountability Framework, namely (i) SEAR, (ii) fitness and probity reforms, (iii) conduct standards and (iv) administrative sanctions. Our previous briefing (here) discusses these pillars in greater detail.
In a statement (here), the Central Bank of Ireland welcomed the publication of the Bill and noted its intention to publicly consult on the implementation of the Individual Accountability Framework. The Bill extends the Central Bank of Ireland’s regulation-making powers regarding regulated financial service providers to facilitate the implementation of the Individual Accountability Framework and SEAR.
The Bill will continue through the legislative process of the Oireachtas in September, after the summer recess. It is therefore possible that the Bill will be passed before the end of 2022. The Minister for Finance previously estimated the Bill to be enacted by the end of January 2023, which appears to be on track for now.
LK Shields is available to assist regulated financial service providers during this process, by assessing their current frameworks and implementing the requirements of the legislation. If you would like to discuss how your firm can prepare for the introduction of the SEAR, please get in touch with a member of our team at LK Shields.
For more information, contact our team:
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