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Financial firms should plan ahead as Irish regulator publishes final SEAR regulations

Financial services firms in Ireland should prepare now to ensure their senior executive accountability regime (SEAR) compliance plans are in place before these obligations enter into force for senior executives, an expert has said.

The Central Bank of Ireland (CBI) recently signed the SEAR regulations (20 pages / 173 KB) into law, and published the final guidance for implementation of the Individual Accountability Framework (IAF).

SEAR is one pillar of the wider IAF which is aimed at embedding a culture of responsibility and effective governance in the financial services industry.  SEAR is designed to ensure there are clear lines of responsibility within financial services firms’ senior management. The SEAR regulations require in-scope firms, which include credit institutions, insurers and investment firms, to set out these responsibilities clearly.

Lisa Carty, financial services expert at Pinsent Masons, said: “This is another significant step in the implementation of the Individual Accountability Framework for Irish financial services firms. It is important that firms consider their compliance plans ahead of the obligations under SEAR entering into force later this year.”

Under the SEAR regulations, firms are required to allocate prescribed and inherent responsibilities to individuals in pre-approval ‘controlled function’ roles – including chief executives and directors.

“While there are not substantive changes in the final SEAR regulations from the draft regulations, published last November, firms may notice that the final text provides further clarity as to how the regulations will apply”, Carty said.

Alongside the final SEAR regulations, the CBI also published its final guidance on the IAF (146 pages / 1.5 MB) setting out its expectations regarding how firms should comply with the requirements of SEAR as well as the other pillars of the IAF, including the conduct standards, certification and the updated fitness and probity regime. The guidance will be updated periodically by the CBI.

SEAR will apply to most senior executives of in-scope firms from 1 July and will apply to non-executive directors and independent non-executive directors of in-scope firms from 1 July 2025.

In addition, the CBI intends to issue two further guidance documents shortly which should provide additional support to firms as they navigate their implementation processes. The new documents will be IAF Frequently Asked Questions to assist firms in their ongoing implementation of the IAF and a system “How To” Guide for submitting IAF documentation.

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