Practical Law Global 2025: Approval of Employees in Regulated Financial Institutions

Derbhil O'Riordan, Partner, and Edward Kevin, Solicitor, in our Asset Management and Investment Funds Group, have contributed to the Practical Law Global: Ireland Finance Quick Compare 2025.

Below, they outline the requirements for employees in regulated financial institutions in Ireland.

Do any employees working in a regulated financial institution need approval from a regulator before starting their role?

Individuals holding key positions (referred to as “controlled functions” (CFs) and “pre-approval controlled functions” (PCFs)) in a regulated financial service provider (RFSP) must be reviewed and approved by the RFSP before being appointed by the RFSP.

PCFs must be reviewed and approved by the RFSP and the Central Bank of Ireland (CBI) before being appointed by the RFSP.

Is a regulated financial institution responsible for approving or certifying any of its employees before they start their role?

Regulated financial institutions must approve individuals in controlled functions and pre-approved controlled functions before they start their role. This is to ensure that they are competent, capable, honest, ethical, have integrity and are financially sound.

Prospective CF and PCF role holders must also certify their compliance with the conduct standards set out in the Central Bank (Individual Accountability Framework) Act 2023 (IAF).

Which authority has responsibility for approving employees working in regulated financial institutions?

The Central Bank of Ireland (CBI).

Do regulated financial institutions need to pay a fee when applying for approval of an employee?

Regulated financial institutions do not pay a fee when applying for approval of an employee.

Is there a public register containing information about the approval status of employees working in regulated financial institutions?

There is no public register containing information about the approval status of individuals in pre-approved controlled functions.

Do regulator approved employees, or any other employees, working for regulated financial institutions have to comply with any conduct rules or standards?

Employees in controlled functions and pre-approved controlled functions must comply with ongoing fitness and probity standards, and attest to complying with these to their employer (the regulated financial service provider) on an annual basis.

Employees must also certify their compliance with the conduct standards under the IAF regime on an annual basis.

Can regulator approved employees, or any other employees, working in regulated financial institutions be subject to disciplinary action for breaching individual conduct rules or standards?

Breaching fitness and probity rules potentially means that a person is guilty of misconduct. If so, the Central Bank of Ireland (CBI) can impose fines and restrict the individual from performing any control function within a RFSP for a period determined by the CBI.

The senior executive accountability regime (SEAR), which has applied to in-scope firms since 1 July 2024 and to (Independent) Non-Executive Directors at in-scope firms since 1 July 2025, has enhanced the CBI’s powers to sanction individuals performing pre-approved controlled functions in RFSPs.

What disciplinary sanctions are available to the regulatory authorities for employee misconduct?

A range of sanctions is available, including private warnings, public censures, and fines. In addition, the Central Bank of Ireland (CBI) can restrict individuals from performing any controlled function, or pre-approved controlled function, in a regulated financial service provider for a period determined by the CBI.

Reproduced from Practical Law with the permission of the publishers. For further information, visit practicallaw.com.

Law stated as at 1 July 2025.