Ifsra invites proposals on probity rules for executives

The Irish Financial Services Regulatory Authority (Ifsra) has launched a public consultation on how it should ensure that the people appointed to senior positions in the financial services industry are people of integrity and competence.

The consultation will feed into the development of a framework for testing directors and senior managers of financial services firms for "fitness and probity".

The regulator is asking interested parties for their views on the scope and operation of a "fit and proper" test; the role of the appointing firm in vetting job candidates; and the role of firms in fostering a culture of ethical behaviour and compliance.

It will also examine the extent to which old offences or past incidents such as bankruptcy should be taken into account.

"Fit and proper" tests currently apply to the directors and managers of most financial services firms. The tests are based on the completion of individual questionnaires; however, the form of the questionnaire varies from sector to sector.

The Ifsra review is likely to lead to a more comprehensive framework of testing, including a requirement for people in senior positions to file tax clearance certificates with the Revenue Commissioners each year.

According to Ifsra, if information comes to light that casts doubt on the fitness or probity of a director or manager in the course of his or her career, it will be necessary for the appointing firm or the financial regulator to take appropriate action.

"Customers must be able to trust their financial services providers to protect their interests and treat them fairly," Ifsra chief executive Liam O'Reilly said yesterday.

"Responsibility in individual firms for delivering financial services that meet these standards rests with directors and managers. These individuals are placed in a position of leadership and trust in firms and must act honestly, ethically and with integrity in every aspect of their business." The closing date for submissions is April 30th.