NSF-2013-MM - National Supervisors Forum

Report
W E LO O K AT TH I N G S D I F F E R E NTLY
Implementing Fitness & Probity
Michael Mullen
National Supervisors Forum
City Hotel
2nd November 2013
W E LO O K AT TH I N G S D I F F E R E NTLY
The Purpose of this Seminar is to:
Provide an overview of the Fitness and Probity
regime for credit unions
Highlight the roles involved
Provide an F&P implementation plan for credit
unions
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Fitness & Probity
Phase 1: 1st August 2013
> 10m assets
National Supervisors Forum 2013
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What is F&P?
For key credit
union officers
to….
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What is F&P?
Fitness
Probity
Honesty
Ethical
Competence
Integrity
Capability
Financially
Sound
Minimum Standards
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What are the F&P Standards? - Assess key officers
under three categories:
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Who are PCFs & CFs?
Pre-approved Controlled Functions
• CUPCF-1: the chairman of the board
• CUPCF-2: the manager of the credit union
Controlled Functions
• CUCF-1: a function that exercises significant
influence on the conduct of the affairs of the
credit union; and
• CUCF-2: a function which relates to ensuring,
controlling or monitoring compliance within a
credit union.
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CUPCF -1
CUPCF -2
Chairman
Manager
CUCF-1
Board of Directors
CUCF-2
Risk Mgmt Officer
BOC
Credit Committee
Compliance Officer
Credit Control Committee
Membership Committee
Money Laundering Officer
Nomination Committee
Internal Audit positions
Management Team
•CF regardless of whether full-time, part-time, contract,
voluntary or consultancy
•CF lists above not exhaustive
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How do I know who the CF’s are?
• Look at the specific competencies required for
the role (job description)
• Assess the role and functions of each person
in line with the definitions prescribed in the
legislation
• What decisions is the person involved in
making?
• Are they part of management team?
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What is Due Diligence?
An internal process carried out by the
credit union to ensure that all CFs meet
and agree in writing to abide by the F&P
Standards
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What is Due Diligence?
• IQ form can be used as template
• Seek and obtain written confirmation from CF as
to whether any of Section 4.1 (a) – (l) and Section
5.2 (a) – (e) apply to that person
• Is the matter material to the performance of the
CF?
• Largely based on self-declaration
• CF must provide CU with required information
• CF must comply with the Standards
• CF must agree in writing to abide by the Standards
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When should DD be Carried Out?
• New PCF’s (1 August 2013)
• On in-situ PCF’s now ( 1 December confirm to
CBI)
• New CF’s 1 November 2013
• In-situ CFs completed by 1 August 2014
• Re-elected/re-appointed PCF (prior to
election/appointment and pre-approval)
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Who does Due Diligence?
• BOC – a member of BOC and a member of Nomination
Committee
• Manager – member of BOD or member of Nomm
Comm
• Nomination Committee – member of Board or member
of Nomm Comm
• Executive CF’s - Manager
• Other CF’s – matter for the CU
*Be aware of conflicts of interest
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What is Pre-Approval?
Process carried out by CBI on PCF’s to
assess whether they meet the F&P
Standards. It involves the completion
of the Individual Questionnaire (IQ)
Form and submitting it to the CBI.
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What is Pre-Approval?
• On PCF’s only who are new, going for reelection, re-appointment, transfer, promotion
after 1 August 2013 (not for in-situ)
• IQ form can only be submitted online
• Must be completed in full with relevant
information
• Sections 1-11 by applicant
• Section 12 by CU (Chair of NC, Chair of BOD,
Manager)
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What is Pre-Approval?
• Interview may be requested by CBI with applicant
pending pre-approval – risk based approach
• Pre-approval will take approx. 15 working days
• Must be pre-approved in writing in advance of
appointment, elections etc.
• Once pre-approved PCF will not require approval
by CBI again, once they stay in that role without a
break and they continue to meet the F&P
Standards
• Need to confirm upon re-election that they
continue to meet the standards
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What is Pre-Approval?
In-situ CUPCF1 (Chair):
• In-Situ Chairs are only exempt from pre-approval until the next AGM when
they are up for re-election (November this year). At that stage they must
complete due diligence and the online IQ form and wait to receive written
confirmation from CBI that they have been approved (or not)
• The four year term of office is retrospective – therefore Chair cannot
stand if they have four years in office, may stand for one year if three years
in office, etc…
• After an in-situ Chair is re-elected this year they can then hold onto that
approval (unless something changes to a material degree) for the
remainder of their four year term, so long as the CU confirms to the CBI
that nothing has changed since pre-approval i.e. that they still abide by
the F&P Standards
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Who are the Key Officers Involved?
Board of Directors
Ensure Policy & Succession Plan
Oversee
Nomination Committee
•
•
•
Manager
Due Diligence for – directors,
manager, BOC members, (internal
audit, RM officer, compliance officer?)
Facilitate pre-approval for applicants
to Chair & Manager role
Due Diligence for staff CF roles
•
Maintains necessary documentation
•
Implement controls
Compliance Officer
Maintains necessary documentation
• Ensures CU acting in compliance
w/ Regs.
Internal Audit
• Independently audits controls
associated w/ F&P
TLO
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How Can I Prepare/Implement?
• To achieve compliance we recommend:
– Strategy (objective on recruitment of key officers)
– Succession Plan
– Training & Standards Policy
– Board Rotation Policy
– Nominations procedure
– Role Descriptions (all CFs and PCFs)
– Terms of reference for the Nomm Comm
– Contracts of employment
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How Can I Prepare/Implement?
 Active Nomination Committee / Training Liaison Officer
 Succession Plan in place
 Develop a long-term approach to attracting suitable
volunteers
 Training Needs Analysis – identify officers that need
qualifications and training
 Ensure all staff and volunteers are provided with relevant
training on an ongoing basis
 Define who the CF’s are
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How Can I Prepare/Implement?
Provide all CF’s with copy of F&P Guidance and
Standards
Ensure your Board, Nomination Committee and
Manger are aware of their roles
Commence Due Diligence plans for PCF’s and CF’s
 Keep records of due diligence
Only propose a suitable person for a position
Monitor persons (on-going)
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Timeline –Phase 1
Date
Development
1 Aug 13
•
•
•
1 Nov 13
• Standards will apply to all newly appointed CFs
1 Dec 13
•
•
Next AGM •
1 Aug 14
CU >10m assets
Standards of F&P apply to all in-situ PCFs
All new PCFs will require due diligence carried out and pre-approval from
CBI
Due diligence to be carried out on in-situ PCFs
List of in-situ PCFs (as of 1 Aug 13) to CBI, confirming they comply with
standards (DD has been carried out) and agree to abide by standards
Ensure that all candidates for role of Chair have been through DD and Preapproval
• Standards apply to all CF roles. Due diligence will have to be conducted by
this date
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Breaches
Failure by a person to comply, or satisfy the CBI as to an
ability to comply, with F&P Standards may lead to:
• Refusal to appoint a PCF by CBI
• Where a person is performing a CF, lead to an
investigation being conducted in relation to the F&P of
that person to perform the relevant functions
• Suspension or prohibition of a person from carrying
out a CF or PCF
• Apply administrative sanctions procedure to credit
unions
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Appeals
• IFSAT – appealable decision, if CBI refuse to
grant written permission for appointment of
PCF
• Appeal can be made by an “affected
person”...” a person whose interests are
directly or indirectly affected by an appealable
decision”
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Further Support
CU Learning & Development Guidance
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Dedicated F&P webpage www.creditunion.ie
Guidance on Developing a Training and Standards Policy
Management of Training in the Credit Union
Volunteer Recruitment Strategy
Fitness & Probity Checklist
Recording of recent roadshows
Pathways
E-learning
CU CPD Scheme
Training Courses
HR Guidance
• Succession Plan Guidance
• CF & PCF Role Descriptors
• Guidance on Contracts of Employment
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Further Support
www.centralbank.ie
www.creditunion.ie
www.culearn.ie
+353 1 614 6754/6932
[email protected]
Suzanne Ryan, Kevin Loughnane, or
Michael Mullen
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