- Minimum competency standards an important part of consumer protection framework since 2007
- Changes introduced following recent EU developments in professional knowledge and competence requirements
- New changes will apply to regulated firms and persons carrying out certain controlled functions
The Central Bank introduced minimum competency standards in 2007, which were subsequently updated in 2011 when the current Minimum Competency Code (MCC) was issued. They are a long-standing feature of the regulatory regime in Ireland and set out statutory minimum professional standards for staff of financial service providers when they are dealing with consumers in relation to retail financial products.
Changes to these standards are now being introduced following recent EU developments in the area of professional knowledge and competence requirements contained in the Mortgage Credit Regulations, Markets in Financial Instruments Directive II (MiFID II) and Insurance Distribution Directive (IDD).
Following publication of a consultation paper in November 2016, the Central Bank is now issuing a revised MCC Code and new Minimum Competency Regulations 2017 (the Regulations), which together replace the former Code. The changes will take effect on 3 January 2018.
The changes arising from these developments include:
- In addition to obtaining a relevant recognised qualification, a requirement on a regulated firm to ensure that staff have obtained the competence and skills appropriate to the relevant function, through experience or training gained in an employment context.
- 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.
- A requirement of six hours of continuous professional development each year for board members of a mortgage credit intermediary.
- A requirement on regulated firms to carry out an annual review of staff members’ development and experience needs.
Following publication of a consultation paper on the Review of the Minimum Competency Code 2011 (CP106) in November 2016, the revised MCC and the Regulations have been issued.
The EU requirements referred to are contained in the following pieces of legislation:
Mortgage Credit Directive which has been transposed into Irish law by the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (Mortgage Credit Regulations):
- Markets in Financial Instruments Directive II (MiFID II) and associated European Securities and Markets Authority Guidelines for the assessment of knowledge and competence (ESMA Guidelines);and
- Insurance Distribution Directive (IDD).