Demystifying the CBI Fitness and Probity Interview Process

Individuals as drivers of culture

“Ineffective culture is bad for business” – this was one of the key messages delivered by Derville Rowland Director General, Financial Conduct at the Central Bank of Ireland (“CBI”) in a recent address[1]. To reinforce this point Director General Rowland pointed to research carried out by the Bank of England which found that “banks with poorer cultures are substantially more risky”. Rowland explained that it is this link between culture and risk which warrants CBI’s mandate and justifies its high expectations in this area.

Rowland described the role of the CBI in developing a positive culture as being limited to that of monitoring, assessing and seeking to influence as a means of guarding against risk and driving better outcomes for consumers.

Individuals drive the culture of a firm and ensuring that regulated entities have people with the right background and skillset is central to what the CBI views as being its gatekeeper role which is formalised in the Fitness and Probity regime.

CBI Fitness and Probity Interview Guide

To assist individuals in preparing for a pre-approval controlled function (“PCF”) Interview by the regulator as part of the PCF application process, the CBI has launched a Fitness and Probity Interview Guide. The Interview Guide explains that the interview forms part of the wider assessment the CBI undertakes when considering to grant or refuse a PCF applications. The interview with CBI presents an opportunity for applicants to demonstrate their suitability for the proposed role. The Interview Guide indicates that the failure to attend an interview may lead to a refusal to allow the appointment of a person to a PCF role.

Two types of interview

It is explained that an applicant can be requested to attend for more than one interview - an “initial assessment interview” followed by a “specific interview”. However, in practice, applicants can typically expect to be required to attend only once for interview. CBI has indicated that it seeks to provide, in advance of each interview, an outline of matters to be discussed to ensure that applicants can adequately prepare.

Initial assessment interview

Generally, two to three CBI representatives attend an initial assessment interview, one of whom will be focused on taking notes while the others work through a list of predetermined questions.

At an initial assessment interview, the applicant will tend to be asked about information that had been supplied as part of their Individual Questionnaire (“IQ”) and are also likely to be asked questions relating to their knowledge, skill and experience. Additional questions may cover topics such as:

• an overview of the business activities of the proposing firm, the proposed role and the individual’s understanding of both;
• the main risks or challenges facing the proposing firm;
• governance, oversight and controls relevant to the proposing firm;
• how the prior experience of the individual is relevant to the proposed role and firm;
• the regulatory framework within which the proposing firm operates;
• how the individual will handle challenges such as time commitment and also potential conflicts of interest.

Persons attending an “initial assessment interview” are generally not allowed to be accompanied, even by a note taker. CBI will permit the applicant to bring along notes to the interview, however the reliance upon scripts is not permitted.

Applicants would be wise to invest significant amount of time in preparing for an initial assessment interview.

Specific interview

The purpose of a “specific interview” is to afford the CBI an opportunity to probe more deeply into a specific matter that they have identified as being of concern in respect of the applicant’s fitness and probity. This might, for example, relate to a historic contravention or sanction which has been disclosed by the applicant in his or her IQ, or it might relate to additional undisclosed information that has been unearthed by CBI during the course of its own information gathering.

As it signals the existence of a matter of considerable concern to CBI, being called for a specific interview is rarely good news for a candidate.

Representatives from the CBI Enforcement Division will play a role in such interviews and the interview may be recorded by a stenographer.

Applicants who have been requested to attend for a specific interview may have legal advisors present for advisory purposes only, but those legal advisors may not answer questions on behalf of the applicant.

A specific interview is likely to be scheduled for a number of hours during which time breaks may be taken. The applicant will also have the opportunity to pause the interview to consult with his or her lawyers. A specific interview begins with the CBI representatives reading from a formal script which outlines the statutory basis for the interview and possible outcomes.

CBI assessment process

Once the CBI interview processes have been concluded, the CBI will assess all information that has been provided as part of the PCF application. This will generally include the IQ, content gleaned from the interview, information provided by other regulatory authorities, as well as research materials that it gathers itself.

Closing remarks

The CBI’s Fitness and Probity Interview Guide is useful as it sheds some further light on the machinations of the PCF approval process which were somewhat mysterious to many firms – particularly those firms and individuals which have limited or no prior experience of the process. The Interview Guide is particularly helpful in affording a greater insight into role and structure of a Specific Interview.

RDJ is experienced in advising candidates and their firms in respect of initial assessment interviews and also specific interviews.