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Financial Services: What SEAR means for Irish Firms

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Financial Services: What SEAR means for Irish Firms

The Senior Accountability Framework Regime (SEAR) presents a major shift in the world of Irish financial services – are firms prepared to meet the implementation challenges?

Enacted on March 9th after a long and deliberative five years, the SEAR is a core element of the Central Bank’s Individual Accountability Framework. The regime carries similarities to the UK’s SMCR (Senior Managers and Certification Regime), launched back in 2016.

Despite their significant differences, those on the SEAR journey are in a prime position to learn from (and avoid) the challenges the UK had in applying the new regulations. What can we expect from the changes?

Which Businesses Does it Apply To?

In its current state, the new SEAR legislation has a tighter scope than the UK’s SMCR, although this could evolve as the regulations are applied in practice. The SEAR applies to a select range of financial providers, unlike the SMCR, which applies to all of the UK’s regulated firms.

As it stands, the SEAR covers 150 businesses, comprised of:

  • Insurers

  • Credit Institutions (but not unions)

  • Banks

  • Some MiFID firms

The Central Bank plans to widen the lens of the SEAR to encompass other financial services companies after a review of the initial implementations, much like the SMCR did after two years in action.

Which Employees Does it Cover?

While the SEAR does not place any targeted responsibility on senior executives, it does require organisations to establish a system that holds those executives accountable to their actions.

The SEAR applies to senior executives performing Controlled Functions (CF) roles. This could change with future review from the Central Bank.

There are also a few vital differences worth noting in terms of enforcement – the SEAR does not give the Central Bank of Ireland enforcement powers, although it does grant them the ability to apply findings from SEAR investigations when making decisions about action.

What’s it All For?

The introduction of the much-anticipated Individual Accountability Framework marks a positive step towards a more transparent financial services industry, provided businesses are equipped to observe the new guidelines.

Companies and consumers are poised to gain from the governance reforms, but whether or not the SEAR can avoid becoming excessively complex (a common complaint of the SMCR) remains to be seen.

In theory, greater accountability means better financial products and a smoother customer journey. Are businesses equipped to build foundations of consumer trust? Bringing the right people on board is essential for success in a changing regulatory world.

Broadgate can Help

If you’re feeling unprepared for the regulated future, we can support you. You’re not alone either, fortifying your business is no mean feat in financial services, particularly in the face of large regulatory changes. Broadgate’s recruitment specialists have the industry knowledge necessary to accurately advise you on where to turn next.

Whether you’re hoping to bring the right talent on board, upgrade your recruitment processes, or glean some insight into the shape of the current market, reach out to the Broadgate team today, we’re here to help.