The Central Bank has backed away from plans to force bank workers to gain at least six months' supervised experience for each financial product they may be involved in, following lobbying from the financial industry.
The regulator outlined new rules on minimum competency requirements on Friday for financial firms dealing with customers, having put its current code, introduced in 2011, out to consultation last November.
The requirements, which take effect from January 3rd next year, are designed to reflect existing and incoming European Union rules, including guidelines from the European Securities and Market Authority for knowledge and competence surrounding complex investment products under the Markets in Financial Instruments Directive II, which also comes into force in January.
As reported by The Irish Times in early July, the Banking and Payments Federation Ireland said in a submission to the Central Bank that the original plan for bank staff to gain at least six months’ supervised experience for each financial project would deter banks coming into the market in the Brexit exodus and lead to a “range of unintended consequences”.
“Based on a literal interpretation of the proposal, in order for an individual to meet the minimum standards for all [eight] retail financial products covered by MMC [minimum competency code], that person would need to work under supervision for a period of four years,” the submission said.
However, this requirement did not feature in the final rules, published by the Central Bank on Friday.
Instead the bank said firms must “ensure a person performing a relevant function on its behalf has obtained the competence and skills appropriate to the relevant function, through experience or training gained in an employment context”.
Key staff member
The incoming rules also place a requirement for at least one “key” staff member involved in the design of a retail financial product to meet a prescribed standard of minimum competency.
They also specify that board members of a mortgage credit intermediary undergo six hours of “continuous professional development each year”, while companies also carry out an annual review of staff members’ development and experience needs.
In response to a question on how the final rules differ to the original plan, a spokeswoman for the regulator said: “The Central Bank regularly publishes consultation papers with a view of seeking submissions and feedback from interested parties. All submissions received in response to consultations by the Central Bank are reviewed thoroughly and considered and, where appropriate, amendments can be made to proposals based on these submissions.”
The Banking and Payments Federation Ireland had warned that the code, if introduced as originally planned, would set more onerous requirements in Ireland than other EU jurisdictions, increase barriers for overseas firms seeking to enter the market and “conflict with the current passporting regime” for financial services across Europe.
