- Proposed changes build on existing platform of strong protections
- Recommended enhancements go beyond minimum EU requirements
- Views sought by 15 February 2017
The Central Bank has today published a Consultation Paper – ‘Review of the Minimum Competency Code 2011’ (MCC). The Central Bank introduced minimum competency standards in 2007, which were subsequently updated in 2011 when the current MCC was issued. The MCC sets out statutory minimum professional standards for staff of financial service providers when they are dealing with consumers in relation to retail financial products.
The Central Bank is proposing changes to minimum competency standards where it believes increased standards are in the best interests of consumers. Some of the proposed changes incorporate recently published EU requirements. The proposals will build on the existing platform of strong protections, with key new enhancements including:
- In addition to obtaining a relevant recognised qualification, a requirement on staff to also obtain at least six months’ experience carrying out a particular activity.
- A requirement for regulated firms to carry out an annual review of staff members’ qualifications, development and experience needs.
- 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.
- New EU legislation requires that minimum competency requirements must now apply to the board members of a mortgage credit intermediary. The Central Bank is consulting on the appropriate standard of minimum competency that such board members should meet.
- The MCC currently applies to credit unions acting as insurance intermediaries. The Central Bank is consulting on extending the application of the MCC to all credit union activities that fall within the scope of the MCC and the timing of such application.
Director of Consumer Protection, Bernard Sheridan, said: “Minimum competency standards are a long-standing feature of the regulatory regime in Ireland having been first introduced in 2007. The objective of these standards is to strengthen consumer protection by requiring staff of financial service providers to achieve minimum professional standards of knowledge and competence.
Recently published EU knowledge and competence requirements build on our existing minimum competency framework. However, we believe that there is scope for increasing aspects of the minimum competency standards beyond what is required by those EU requirements. The measures we are proposing today are aimed at increasing professional standards for staff of financial service providers, in particular for staff dealing directly with consumers in relation to retail financial products and also those designing products that are ultimately sold to consumers”.
Submissions to the consultation paper, along with comments and queries, can be made by email to [email protected] and the closing date for submissions is 15 February 2017. All submissions will be published on www.centralbank.ie. Further information on the MCC is available here.
Notes to editors
For the purposes of this consultation paper, 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).