Central Bank of Ireland outlines new minimum competency standards in tune with MiFID II

Maria Nikolova

The new rules specify, inter alia, that at least one key staff member involved in the design of a retail financial product will be required to meet a prescribed standard of minimum competency.

The Central Bank of Ireland continues with its efforts to adapt its existing regulations to the Markets in Financial Instruments Directive II (MiFID II), which is set to come into force in January 2018.

On Friday, September 1, 2017, the Irish financial regulator said it was introducing new minimum competency standards in tune with the new MiFID II requirements. These standards have been a longstanding feature of the regulatory regime in Ireland. In their essence, they represent the 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 has issued a revised Minimum Competency Code and new Minimum Competency Regulations 2017. Together, they replace the former Code and take effect on January 3, 2018.

In summary, the changes to the above-mentioned documents include:

  • In addition to obtaining a relevant recognised qualification, a requirement on a regulated firm to ensure that staff have obtained the competence and skills appropriate to the relevant function, through experience or training gained in an employment context.
  • 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.
  • A requirement of six hours of continuous professional development each year for board members of a mortgage credit intermediary.
  • A requirement on regulated firms to carry out an annual review of staff members’ development and experience needs.

The amendments to the Minimum Competency Code and the Minimum Competency Regulations 2017 are introduced shortly after the Central Bank of Ireland published an Addendum to the Consumer Protection Code 2012, also in line with the upcoming MiFID II rules. The changes affected the chapters on Provision of Information and on Advertising. For instance, in cases where a regulated entity providing MiFID Article 3 services offers information about the past performance of the advertised product or service, the company should make sure that the information is not selected so as to exaggerate the success or disguise the lack of success of the advertised product or service and guarantee that this information is based on actual performance. Moreover, the period should be stated clearly and it must cover the preceding five years, or the whole period for which the advertised product or service has been provided, where less than five years.

Last week, the Central Bank of Ireland published a “Dear CEO” letter, in which it provided a summary of the findings of a recently completed themed review of suitability processes of investment firms. That review has provided an insight into how firms were progressing with the significant challenge of preparing for MiFID II. The review focused on the information-gathering phase of the suitability process and the firms were assessed for compliance with the ESMA “Guidelines on certain aspects of the MiFID suitability requirements”.

The Bank has found that most of the inspected firms failed to fully comply with the ESMA Guidelines.

Read this next

Executive Moves

Avelacom appoints Timothy Wong to run new Hong Kong office toward APAC expansion

Avelacom helps to achieve sub-millisecond speed of market data and order execution across both derivatives exchanges and crypto markets.

Executive Moves

XS.com hires Ahmed Negm, a popular market analyst on CNBC, Sky News, Bloomberg’s Asharq

“Ahmed’s expertise and passion for understanding the intricacies of the financial markets will be invaluable as we continue to grow our client base and expand into new jurisdictions.”

Institutional FX

ATFX uses blockchain to help clients verify IBs and vice versa

ATFX said it has been working on the IB verification project for a few months.

Industry News

Research market in dire straits as SEC’s ‘no-action’ letter on MiFID II lapses in June – survey

“Of all the regulatory news that has hit the research market in the last few months, this is the one change that will fundamentally impact what fund managers can access and pay for in future.”

Executive Moves

Wombat appoints ex-abrdn Richard Charnock as UK platform turns to Europe

Launched in 2019, Wombat provides a dedicated mobile investing platform – available on both iOS and Android – offering users both range and choice.

Institutional FX

Broadridge integrates Point Focal’s pre and post-market reports

“Point Focal provides a unique lens on the market which will help add alpha to the trading process and these new insights will rapidly improve performance while mitigating execution risk and simplify trading.”


XCritical integrates with Brokeree Solutions, allowing its clients to launch copy trading 

The forex software provider – XCritical, has integrated Social Trading by Brokeree Solutions into their CRM system.

Industry News

HKEX partners with Saudi exchange for cross listings, ESG, Fintech

“The Kingdom of Saudi Arabia, and the broader Middle Eastern region, are one of the world’s most dynamic and exciting economic and innovation hubs and also home to some of the fastest growing investor groups in the world. Hong Kong and HKEX’s markets offer significant opportunities for international investors and corporates, including unrivalled connectivity to the Mainland Chinese markets through our unique Connect programmes. This agreement signals the beginning of even greater collaboration between our companies and our home markets, and we look forward to exploring many future areas of cooperation.”

Executive Moves

CMC Markets Connect relocates APAC team led by Peter Foster to Singapore

“Singapore is a vibrant city and is now undoubtedly seen as Asia’s leading financial hub. The decision to bolster the CMC Markets Connect team here will help us cement the company’s position as a leading provider of multi asset liquidity and comprehensive trading solutions across the region.”