Firms may recently have noticed that CARB has posted revised  Regulations for investment business activities and advice caught by the Investment  Intermediaries Act on its website, these became effective on the 1 July 2011.

CARB has taken this as an opportunity not only of bringing the regulations up to date by ensuring that definitions and procedures are aligned to those in the  CARB Regulations in relation to, for example, affiliates and the appeal process but has also attempted  to produce a more user friendly and less lengthy set of Regulations by separating the guidance into a standalone document.

New regulations have been included to ensure that the Central Bank’s Minimum Competency requirements are reflected.  In particular this has lead to a restructuring of the lower categories, Categories IA1 and IA2.  In addition to the restructuring a new activity of acting as a post box to pass cheques from a client to a product provider has been added at 9(b).  In addition they should note that advice may only be provided on deposit accounts that are for terms of less than 12 months in this category.

Firms in the lowest category that of IA1 may now only carry on activities 1 to 9 – this means they are no longer able to write business where they hold a letter of appointment with the product provider  at this lower category.  Whilst a firm in this category is not required to have an accredited individual as recognised by the Central Bank’s Minimum Competency Requirements, and although the majority of the requirements in relation to knowledge and continuing professional development are not applicable, those in this category will still need to have a knowledge of, for example the Central Bank’s various registers, etc.

However this is where many firms may now find themselves  asking for a higher category of authorisation than that previously held, as prior to this amendment firms could actually write business in the lowest category where they held appropriate letters of appointment, and could show that they had researched the market fully to ensure that the product and the product provider where in the clients best interests. 
Many firms hold letters of appointment and will they have to consider whether they wish to retain them and move into a slightly higher category where the Minimum Competency Requirements apply or whether they do not wish to retain them and remain in a lower category.  (Firms should remember that where they are intending to relinquish a letter of appointment with a product provider that they are required to advertise this fact in local and/or national papers.)

Once Minimum Competency Requirements apply then the firm must have someone who is grandfathered or has obtained one of the recognised ‘Accredited’ qualifications, and in addition must obtain the requisite 40 hours of investment business related cpd over the  3 year cycle  (or 15 per year), and that cpd must be directly related to the activities that are being conducted.

Firms are reminded to look at the Central Banks Minimum Competency Requirements to ensure they are aware of those qualifications that are deemed to be ‘Accredited’. Minimum Competency Requirements can be accessed on the Central Bank’s website  www.financialregulator.ie .

If you have any queries in relation to the Investment Business Regulations, require bespoke training in the Regulations, or require an external Investment Business Compliance Review contact Michelle Kane at OmniPro Practice Support who will be happy to assist.

Michelle Kane,
OmniPro,
Block D,
Iveagh Court,
Harcourt Road,
Dublin 2.

Tel: 01 411 0000

mkane@omnipro.ie
www.omnipro.ie