The Central Bank of Ireland has updated its Minimum Competency Code 2017 and Minimum Competency Regulations 2017 Q&A

The Central Bank of Ireland has updated its Minimum Competency Code 2017 and Minimum Competency Regulations 2017 Questions and Answers, in order to take account of the Mortgage Credit Directive, MiFID II and the Insurance Distribution Directive. 

The Minimum Competency Requirements were first introduced in 2007 to establish minimum professional standards for the staff of financial service providers. There is a particular focus on staff dealing with consumers in relation to retail products. These requirements were replaced in 2011 by the Minimum Competency Code. Following the Review of the Minimum Competency Code Consultation Paper (CP106) the Minimum Competency Code was reviewed and the Minimum Competency Code 2017 (MCC 2017) issued alongside the Minimum Competency Regulations (MCR). The Questions and Answers were previously updated in 2018 and in early 2019.

The most recent updates on 6 December 2019 relate to the amendment of Q7.4 and the insertion of Q9.5 and Q9.6.

Q7.4 was initially added in February 2018 and asked if the MCC and MCR 2017 apply to insurance undertakings and intermediaries and reinsurance undertakings and intermediaries that are authorised, licensed or registered with the Central Bank, when providing services, either on a freedom of establishment or freedom of services basis, in other EU/EEA Member States. The Central Bank response confirms that when services are provided in other EU or EEA Member States that the appropriate competency standards are those applying to those Member States in which the services are provided. The Insurance Distribution Directive does require Member States to ensure that in-scope firms possess appropriate knowledge and ability and comply with relevant continuing professional training and development requirements. Accordingly, the Central Bank requires firms to demonstrate compliance with the knowledge and competence requirements and relevant employees must complete 15 hours of professional training or development per year.

Q9.5 is a new addition to the Central Bank's Questions and Answers and relates to persons exercising certain controlled functions, the question requests clarification on whether it is possible to complete more than one hour of CPD per year relating to ethics. The answer from the Central Bank confirms that there is a minimum of one hour in ethics to be completed per year and that although this is not a limit the overall CPD must cover a range of the competencies required for the role of that individual. The general principle is also set out in the Central Bank's answer that it is not appropriate for the bulk of the CPD completed by an individual to focus only on one topic. 

Q9.6 is the final addition to the Central Bank's Questions and Answers and also relates to CPD requirements. This question queries whether modules on the topics of culture, inclusion and diversity are eligible for CPD hours under the MCC. The Central Bank's answer is that CPD on these topics will not meet the requirements for CPD under the MCC. The importance of culture, inclusion and diversity is acknowledged by the Central Bank in its response but as these topics relate to the general operation of a firm rather than the technical knowledge of the individual undertaking a controlled function within the scope of the MCC, these types of modules will not meet CPD requirements.

These updates relating to the MCC occur in the wider context of ongoing enhanced regulatory emphasis on the responsibility of individuals.  The MCC is closely linked to the Central Bank's Fitness and Probity regime which has been the subject of a Dear CEO letter to all Regulated Financial Service Providers in April 2019. The Central Bank's proposals for a new individual accountability framework and senior executive accountability regime are also topical at the moment as the Minister for Finance has previously indicated that he will present draft heads of Bill to Cabinet before the end of the year. 

For further information please contact the Commercial & Technology team.

Date published: 17 December 2019