CBI Consultation Paper 160 – updated fitness and probity guidance

Following the recommendations arising from the Enria Report published in July 2024, the Central Bank of Ireland (CBI) has launched a consultation regarding updates to the Fitness and Probity (F&P) regime. The CBI is seeking to increase transparency and provide enhanced clarity regarding the application of the F&P standards and will be accepting feedback on the proposed changes until 10 July 2025.

Under the consultation, the CBI has published several new documents:

• Consultation Paper 160

• Draft Guidance on the Standards of Fitness and Probity

• A Report on the Implementation of Recommendations made under the Enria Report

• Fitness and Probity Gatekeeper Process Manual

The CBI has consolidated its F&P guidance into a single document and has introduced several enhancements.

Changes to the list of PCFs

The CBI has stated that it will be taking a two-stage approach to its review of the overall number of pre-approval controlled function (PCF) roles:

• An initial targeted re-structure of the PCF regulations has been proposed under CP160 to make the PCF list more manageable and clearer for firms, including the removal of sector-specific categorisations. This has resulted in the merging of several roles, as well as the renaming of certain functions, reducing the number of PCF roles from 59 to 45 (see CP160 annex).

• The CBI will work throughout 2025 and 2026 on a more substantive review to be coordinated with the planned three-year review of the Senior Executive Accountability Regime (SEAR) in 2027.

Due diligence – inclusion of objective measures

The CBI has incorporated objective measures (specific qualifications, previous experience requirements and time commitments) and role summaries for certain PCFs that will be used within the assessment process, including:

• The requirements regarding time commitments for PCF/CF roles and the number of directorships that an individual can hold, including reference to the relevant regulation/guidance (corporate governance, European legislation and guidance);

• Inherent responsibilities as derived from SEAR;

• Role summaries of certain PCFs, focusing on non-executive directors (NEDs) and independent non-executive directors (INEDs)); and Guidance on the expected level of knowledge and experience required for PCF/CF roles.

Collective suitability, diversity and inclusion

The CBI has reaffirmed the importance it places on the collective suitability and diversity in the make-up of the boards of firms within the draft guidance.

The CBI has noted that, to provide effective oversight, the board of a firm must have an adequate level of collective knowledge and diversity of skills/experiences to understand the risks facing the firm and the broader financial context.

The draft guidance also acknowledges that, while the diversity of the board is not a criterion for the assessment of an individual’s fitness and probity, diversity should be considered by firms when selecting and assessing members of the board in the context of collective suitability.

Additional changes to the F&P regime

Fitness and Probity Gatekeeper Process Manual  

The CBI has published a new Fitness and Probity Gatekeeper Process Manual, which provides an overview of the fitness and probity gatekeeping process. It is intended to be used as practical guidance for regulated entities and proposed appointees.

Dedicated F&P unit within the CBI

In response to the risks highlighted by the Enria report regarding fragmented governance, the CBI has formed a new Fitness and Probity unit effective from 1 January 2025. This unit will have ownership of F&P gatekeeping, including handling F&P applications and conducting assessments with a view to enhancing consistency. In cases of potential refusal, the F&P unit will now refer cases to a senior committee, the Gatekeeping Decisions Committee, within the CBI for consideration.

Key actions firms can take today

In light of CP160 and the draft guidance, firms should:

• Review the revised guidance to ensure internal policies and procedures align with the CBI’s expectations;
• Ensure that individuals in PCF and CF roles meet the standards set out under the draft guidance; and
• Engage with the consultation process before 10 July 2025 by submitting comments or concerns regarding the proposed changes to the CBI at CP160@centralbank.ie.

We’re here to help

If your firm is navigating the implications of CP160 and the Central Bank’s new draft fitness and probity guidance, our expert team is here to help. With deep regulatory insight and hands-on experience supporting financial institutions, we can offer practical support to help you interpret regulatory expectations, strengthen internal frameworks, and respond confidently to the evolving fitness and probity landscape.