Merrion Stockbrokers has been slapped with a €200k fine by the Central Bank

The firm has breached the regulator’s fitness and probity rules.

By Killian Woods Reporter, Fora

MERRION STOCKBROKERS HAS been slapped with a €200,000 fine by the Central Bank of Ireland for failing to meet certain ‘fitness and probity’ standards.

The fitness and probity regime was introduced following the financial crisis to ensure sufficiently qualified people worked in the financial services sector.

Under the Central Bank’s new rules, people who carry out certain influential and customer-facing roles are required to meet standards to assume such positions.

Some of these roles include giving financial advice to customers and dealing with property on behalf of a client.

Staff in numerous director-level roles, such as executive director and head of finance, also need to pass fitness and probity standards to take on an influential position.

As part of an enforcement investigation by the Central Bank, it identified that Merrion Stockbrokers failed to put in place adequate controls to ensure that people in influential positions complied with the fitness and probity standards.

The Central Bank noted that Merrion failed to meet its obligations up until April 2015 and had no written procedures to enforce these standards.

It added that Merrion did not categorise a number of employees performing influential roles correctly.

Merrion admitted the breach took place, which was identified during a Central Bank inspection of the company in 2016.

Obligation

This was the first instance of a fine being issued against a financial entity for breaching fitness and probity standards.

Brenda O’Neill, head of enforcement at the Central Bank, said Merrion failed to comprehend its obligation to monitor the fitness and probity of its staff.

“The Central Bank acts as a gatekeeper for individuals in senior positions at supervised firms,” she said.

“Importantly however, it is firms who have the ultimate responsibility for ensuring that the wider population of individuals working in financial services are suitable. This is an obligation that firms have when appointing individuals to roles.”

She added that financial firms must also have processes in place to identify staff who no longer satisfy the standards required to hold influential positions.

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