What is a Fitness & Probity Search?
In response to the banking failures during the 2008 global financial crisis, a ‘fitness and probity’ mechanism was established by the Central Bank of Ireland under the Central Bank Reform Act (2010).
Post recession it was identified that shortcomings in regulatory oversight for governance structures in certain financial bodies had aggravated an already parlous situation. This in turn motivated legislators to enact laws that were deemed essential to provide ‘…protection of the public interest and to ensuring there is public trust and confidence in the financial system…’
As such, the guiding mechanisms behind the fitness and probity regime are there to ensure that individuals in key and customer facing positions (Controlled Functions (CFs) (*) and Pre-Approval Controlled Functions (PCFs) (†),) are ‘…competent and capable, honest, ethical and of integrity and also financially sound…’.
In practical terms, the Act mandates the creation of a statutory code of standards for significant role holders. It requires proposed individuals for these sensitive functions to complete an online Individual Questionnaire (IQ). The proposing firm then endorses same and submits the IQ electronically to the Central Bank for assessment.
While some sections of the IQ deals with an ‘…applicant’s competence capacity, probity and management of conflicts of interests…’, this explainer’s focus homes in on reputational and financial soundness matters, including related money matters should an applicant be in a position of authority for a firm.
It is primarily with regards to these latter issues that Ellis & Ellis are commonly requested to provide our specialised search facilities.
What searches might an applicant (or their proposer) conduct as part of a Fitness and Probity Individual Questionnaire (IQ) process?
In practice the Individual Questionnaire (IQ) process corrals the applicant through a series of questions and declarations. However, in doing so, it also places an onus on the both the individual and the proposing firm to provide evidence to support what is effectively a joint application.
On reputational matters this means investigating whether there are any refusals, prohibitions, restrictions, suspensions, or investigations (past or ongoing) from an authorisation/ licensed body.
Typically, this element invites searches against, but is not restricted to the following: –
| Search Type | Broad Function of Search |
| Restricted/Disqualified Persons – (Companies Registration Office (CRO) | To establish if an applicant has been restricted or disqualified from acting as an officer to a company by the High Court or has accepted disqualification or restriction by the Corporate Enforcement Authority (CEA) without the necessity to go to the High Court. |
| Directorship Search (Companies Registration Office (CRO) | This should perform a few tasks, that is, to see if there are potential conflicts of interest or contentious shareholding for the applicant. Secondly, it should highlight whether the applicant was a director/ officer at the time a company was put in either voluntary or involuntary liquidation, examinership, or receivership. |
| Prohibition Notices (Central Bank of Ireland Registers) | This search should determine whether an applicant is prohibited from performing a controlled function for ‘…a specified period or indefinitely’. |
With regards to the Financial Soundness of an applicant, a lack of financial health could leave the applicant susceptible to outside influence on their judicious decision-making. Moreover, it may also call into question their ability to make sound financial choices. As such, the following (but not limited to) searches are usually conducted to establish an applicant’s monetary fortitude: –
| Search Type | Broad Function of Search |
| Registered Judgment (Debt/ Money) | This search will highlight any potential money judgments which have been registered with the Courts. |
| Bankruptcy | As a bankrupt, an applicant would be deemed a person who is wholly or partially unable to repay their debts (both secured and unsecured). This search would establish if an applicant appeared on the bankruptcy register (for the last 12 months only), the Deeds of Arrangements Register from 14th day of April 1922 and the Register of EU Personal Insolvencies from the 14th April 2004. |
| Insolvency Service of Ireland (ISI) | The ISI process is intended to reach personal insolvency solutions short of bankruptcy itself, with the ultimate goal being ‘…to restore insolvent persons to solvency….’. A set of searches with the ISI will cover the registers for Debt Relief Notices, Protective Certs, Personal Insolvency Arrangements, and Debts Settlement Arrangements. |
| Proceedings Searches | The intention of this examination is to flag any current court cases registered in the High Courts which may impact on an applicant’s financial soundness or reputational standing. |
| Revenue Tax Defaulters List | Searches against the list of published Revenue Defaulters will pick up on matters on tax, possession or sale of certain restricted goods, and licensing failures. |
| Sheriff (Civil) | Once a Judgment (Debt/ Money) has be made, it may be registered in a number of places. One such locale is with the Sheriff (Civil). Judgment (Debt/ Money) are not always registered in the Judgments Register. Hence the need to confirm herein. |
| Revenue sheriff | Typically, Revenue will first obtain a Court judgment (stemming from the High Court, Circuit Courts and District Courts) against a recalcitrant taxpayer. Subsequently a warrant to enforce judgment may be lodged with the Sheriff (Revenue) against whose registers are recorded all such executable judgments. |
| Receiver of Fines | At present, all taxes, interest, and duties owed to the government are gathered through the Office of the Revenue Commissioners. From time to time, Revenue may delegate their powers to local sheriffs to execute certificates issued for enforcement. Again, Judgment (Debt/ Money) are not always registered in the Judgments Register. Hence the need to confirm on the Receiver’s registers. |
How might an applicant (or their proposer) conduct such searches as part of a Fitness and Probity Individual Questionnaire (IQ) process?
Ellis & Ellis provides to Regulated Financial Service Providers (RFSP) aka Regulated Firms (but not to individuals) access to our proprietary website. While the bulk of the above search types can be turnaround instantly, a number of them involve manual intervention. Nonetheless, all search types may be requested concurrently.
While most of the search types are merely conducted against the bearers of a name, other search types do require additional information in order to be conducted as follows:
| Search Types | Additional Information Requirements |
| Restricted/Disqualified Persons | Date of Birth of the applicant |
| Directorship Search | Date of Birth of the applicant |
| Sheriff (Civil) | Address of Applicant |
| Revenue sheriff | Address of Applicant |
| Receiver of Fines | Address of Applicant |
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As shown above, Ellis & Ellis retains extensive and in-depth knowledge of its sources, applying practical commercial strategies to help clients make the most of this information.
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List of related searches:
- Judgment (Debt/Money) Searches
- Bankruptcy searches
- Insolvency Searches
- Folio Searches
- Company Searches
* Controlled Functions (CFs) – Click Here to Read More
† Pre- Approval Controlled Functions – Click here to Read More
‡ Regulated Financial Service Providers (RFSP) – Click here to Read More
‡ Record of offences appearing on Revenue Tax Defaulters List – Click here to Read More