Supervision Process for MiFID Firms

General

The supervision process for MiFID Investment Firms mirrors the general supervision process of the Central Bank.

This general supervision approach seeks to ensure that all regulated financial services providers meet their responsibilities to have strong management, internal control and compliance procedures in place, and have people of integrity and competence at all levels in their organisations.

All Irish authorised financial service providers, whether engaged in international or domestic activities, are expected to implement best practice.

Supervisory Process

The Central Bank's supervision process is underpinned by its Probability Risk and Impact SysteM (PRISM). PRISM is a risk-based framework which supports our challenge of firms and our judgement of the risks they pose to the economy and the consumer. The Central Bank of Ireland serves the public interest by safeguarding monetary and financial stability and by working to ensure that the financial system operates in the best interests of consumers and the wider economy. PRISM supports the mitigation of perceived risks within firms to achieve this mission. For more information regarding PRISM, see PRISM Explained. Supervisory processes undertaken by the Central Bank include, but are not limited to, the following:

  • Analysis of returns submitted to the Central Bank
  • Risk-rating of firms
  • Themed inspections
  • Review meetings

Fitness & Probity

The Fitness & Probity regime came into effect on 1 December 2011. The prior approval of the Central Bank of Ireland is required before an individual can be appointed to a Pre-Approval Controlled Function (PCF), to ensure that staff appointed to these roles possess the skills to properly discharge of their responsibilities.

Individuals must evidence they meet the requirements of the Fitness & Probity Standards and this is assessed by the Central Bank through an Individual Questionnaire (‘IQ’).

“Fitness” requires that a person appointed as a Director or Manager has the necessary qualifications, skills and experience to perform the duties of that position. “Probity” requires that a person is honest, fair and ethical.

Further information is available on the Fitness and Probity section of our website.

Consumer Protection

One of the key responsibilities of the Central Bank’s mandate is consumer protection. The Asset Management Supervision Directorate has a dedicated conduct team which monitors investment firms’ compliance with the conduct of business requirements.

The Conduct Team works in collaboration with the Consumer Protection Directorate. Further information on the Consumer Protection Directorate is available on their webpage.

Conduct of business under MiFID covers areas such as:

  • Client categorisation
  • The provision of information to clients
  • Suitability and appropriateness
  • Best execution
  • Inducements
  • Conflicts of interest
  • Complaints handling

The Central Bank monitors compliance with MiFID and other conduct of business requirements by way of:

  • Advertising monitoring
  • Themed inspections
  • General inspections
  • Full Risk Assessments
  • Mystery shopping