Guidance for Credit Unions In Situ Pre-Approval Controlled Functions (PCFs): Confirmation of Due Diligence undertaken July 2018

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Colleen Barber
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1 Guidance for Credit Unions In Situ Pre-Approval Controlled Functions (PCFs): Confirmation of Due July 2018

2 Page 2 Table of Contents Section 1: Introduction Purpose of this Guidance... 3 Section 2: Overview of Requirements Information to be provided Submission Method... 5 Section 3: PCF Information File Completing the PCF Information File Saving the PCF Information File Section 4: Submission of the PCF In Situ Return Completing the Submission Section 5: Queries Appendix

3 Page 3 Section 1: Introduction 1.1 Purpose of this Guidance The Fitness and Probity regime for credit unions was introduced in 2013 and was implemented in two phases. The first phase began on 1 August 2013 and introduced fitness and probity requirements for credit unions with total assets of greater than 10 million. The second phase commenced on 1 August 2015, bringing credit unions with total assets of 10 million or less within the scope of the regime. Following a review of the regime in 2017, 3 additional Pre-Approval Controlled Functions ( PCFs ) were introduced for credit unions that have total assets of at least 100 million, according to the credit union s latest audited financial statements. This additional requirement applies from 1 July 2018 onwards. The additional PCFs are: Risk Management Officer (CUPCF-3); Head of Internal Audit (CUPCF-4); and Head of Finance (CUPCF-5). The information in this document applies to credit unions with total assets of at least 100 million 1 which became subject to the 3 additional PCFs from 1 July 2018 onwards. These credit unions are required to provide to the ( the Central Bank ) by 31 October 2018 details of the individuals holding the above 3 additional PCF roles as at 1 July The credit unions are also required to confirm that the necessary due diligence has been performed in relation to these PCFs who were in situ, as at 1 July This guidance document sets out how a credit union can notify the the individuals who were in situ in the above 3 PCF roles as at 1 July 2018 and how the credit union can confirm that the required due diligence has been undertaken on these PCF role holders, i.e. via the Credit Union PCF In Situ Return 2018 Regulations return (the PCF In Situ Return). The PCF In Situ Return requires: (a) details of persons in-situ on 1 July 2018; and (b) confirmation that the persons meet the Fitness and Probity Standards and the required due diligence has been undertaken by the credit union. 1 By reference to the most recently audited accounts

4 Page 4 The following documents in relation to the Fitness and Probity regime for credit unions can be found on the Central Bank website ( and should be reviewed prior to completing the return. Fitness and Probity 2013 Regulations for Credit Unions ( the 2013 Regulations ); Fitness and Probity 2015 Regulations for Credit Unions ( the 2015 Regulations ); Fitness and Probity 2018 (Amendment) Regulations for Credit Unions ( the 2018 Regulations ); Fitness and Probity Standards for Credit Unions ( the Standards ); Guidance on Fitness and Probity for Credit Unions ( the Guidance ); Fitness and Probity for Credit Unions Frequently Asked Questions ( the FAQ ); and Minimum Competency Code Note for credit unions whose assets increase to at least 100 million after 1 July 2018 Credit unions whose total assets increase to at least 100 million after 1 July 2018 (based on their most recently audited accounts) will become subject to the 2018 Regulations from the date on which their total assets increase to at least 100 million. From this date, the credit union will be subject to the same requirements as outlined above with respect to the submission of the PCF In situ Return, with the exception of the relevant dates set out in this document. In this instance, the PCF In Situ Return must be completed with details for persons in-situ in the 3 additional PCF roles as at the date on which the credit union became subject to the 2018 Regulations. The Central Bank will monitor credit union assets, on an ongoing basis, to identify those credit unions that have come within scope of the 2018 Regulations. Further communication will then issue to the relevant credit unions regarding the procedure and timelines for submitting the PCF In Situ Return.

5 Page 5 Section 2: Overview of Requirements 2.1 Information to be provided Credit unions are required: to complete a PCF Information File (i.e. a pre-formatted Excel file listing the individuals performing the 3 additional PCF roles on 1 July 2018), which has been provided by the Central Bank; to upload the file to the Central Bank s Online Reporting (ONR) System under the Credit Union PCF In Situ Return 2018 Regulations option; to provide declarations by selecting the tick boxes; and to submit the file and declarations to the Central Bank via the ONR System. For instructions on completing the PCF Information File, please see Section 3 of this guidance. To complete the process of submitting the PCF In Situ Return to the Central Bank, the PCF In Situ Return must be signed off confirming that the information provided is correct. It also confirms that the chair has confirmed that the credit union: has performed the necessary due diligence as detailed in the Guidance on Fitness and Probity for Credit Unions in respect of persons set out in the attached list (i.e. the PCF Information File); are satisfied on reasonable grounds that these persons are compliant with the Fitness and Probity Standards for Credit Unions; and has obtained each person s written agreement to abide by the Fitness and Probity Standards for Credit Unions. 2.2 Submission Method The ONR is a web-based application through which credit unions with account logins can submit the PCF Information File and provide confirmation of due diligence undertaken via the PCF In Situ Return. Where a credit union user has a Fitness and Probity Business Administrator account for the ONR, and where the credit union is under the scope of the 2018 Regulations, the Credit Union PCF In Situ Return 2018 Regulations return will be available for them to select and complete. If the credit union requires a change to the user(s) who have access to the Fitness and Probity section of the ONR, the credit union should complete and submit the New Fitness and Probity Business Administrator Request Form which is available on the Central Bank website here.

6 Page 6 For detailed information on submitting via the ONR please see Section 4 of this guidance. The Credit Union PCF In Situ Return 2018 Regulations return will only be available until 31st October For credit unions who came within scope of the 2018 Regulations on 1 July For all other credit unions, refer to the note in Section 1 of this document regarding timelines.

7 Page 7 Section 3: PCF Information File 3.1 Completing the PCF Information File The PCF Information File includes the following four worksheets: 1. Cover provides guidance on the indication of any errors or omissions made, if any, when completing the PCF worksheet 2. PCF To be completed by the credit union, requires information on each PCF role holder(s) 3. Data Validation highlights which inputs to the cells on the PCF Information file are correct or incorrect as the case may be. 4. Instructions provides guidance on completion, correcting errors and uploading of the PCF Information File. The PCF worksheet must be completed as follows: PCF For each PCF role within the credit union for which the necessary due diligence is required to have been carried out, the relevant PCF must be selected from the drop down menu. The PCFs are as specified in the 2018 Regulations. These PCF roles are listed in Appendix 1 of this document. Once a PCF role has been selected, all other fields are mandatory (marked with asterisk) with the exception of the Address Lines 2, Address Line 3, Start Date (which is autopopulated), and the End Date. A maximum of 100 characters is permitted in each field. Title the title of Doctor, Miss, Mr, Mrs, Ms must be selected from the drop down menu Forename the forename of the PCF role holder must be provided Surname the surname of the PCF role holder must be provided Date of Birth the date of birth of the PCF role holder must be provided in the format of dd/mm/yyyy Address Line 1 the primary residential address of the PCF role holder must be provided Address Line 2 if necessary Address Line 3 if necessary Town or City the town or city of the primary residential address of the PCF role holder must be provided Country the country of the primary residential address of the PCF role holder must be selected from the drop down menu Address the address at which the PCF role holder may be contacted must be provided

8 Page 8 Start Date will be auto-populated End Date this must be either blank or, where a date is entered, the date must be post start date but pre the PCF In Situ Return submission date Figure 1: Example of PCF Information File Once the mandatory fields have been completed, both Cover and Data Validation worksheet tabs should be checked to identify any errors or omissions. Example 1. The Cover worksheet indicates that the PCF Information File contains one error i.e. Return Status: Invalid. The User must click on the cell showing the total number of errors identified, under Data Errors header, which will divert them to the Data Validation worksheet (see example in Figure 2a showing number of errors). Figure 2a: Example of PCF Information File Error 2. The User must scroll through the worksheet to identify errors, which are shown in column F (see example in Figure 2b).

Page 9 Figure 2b: Example of PCF Information File Error 3.

identified (see example in Figure 2c). Figure 2c: Example of PCF Information File Error 4.

Figure 2d showing blank in mandatory field).

9 Page 9 Figure 2b: Example of PCF Information File Error 3. The User must click on the cell in Column B in the same row where an error has been identified (see example in Figure 2c). Figure 2c: Example of PCF Information File Error 4. The User will be diverted to the location of the error on the PCF worksheet (see example in Figure 2d showing blank in mandatory field). Figure 2d: Example of PCF Information File Error 5. The error must be corrected (e.g. blank field must be completed) (see example in Figure 2d showing blank in the Date of Birth field)

10 Page 10 Steps 2 to 5 must be performed for all the errors identified in the Cover worksheet. 3.2 Saving the PCF Information File The PCF Information File must be saved to the User s computer using the following filename format: CCCCCC_ _CIS.xlsx where CCCCCC is the Institution Code used to log in to the ONR System. The remaining part of the file name is not subject to change. (The Institution Code used in the filename must correspond with the Institution Code used to log in to the ONR in order for the PCF Information File to be accepted. The ONR System will also not recognise a file that has been altered in any way. For example, added or deleted worksheets or columns, removed field protection etc. In addition, the file will not be accepted if all mandatory information for selected PCF role has not been provided).

11 Page 11 Section 4: Submission of the PCF In Situ Return 4.1 Completing the Submission Once the PCF Information File has been completed without error and saved using the prescribed filename format as per 3.2 above, it can be uploaded to the ONR System. The PCF Information File may only be uploaded and signed off by the Fitness and Probity Business Administrator in the credit union. The completed PCF Information File must be saved to User s computer and then uploaded via ONR. The User must perform the following steps to upload the PCF Information File to the ONR: 1. Open a web browser and enter the address 2. Click on Regulation at the top of the screen, and then click on the Log in to Online Reporting link on the bottom left of the page. Figure 3a: Submitting PCF Information File 3. The Login to Online Reporting page appears. Login credentials must be entered and Login button must be clicked.

12 Page 12 Figure 3b: Submitting PCF Information File 4. View/Edit Data must be selected. 5. Credit Union PCF In Situ Return 2018 Regulations link must be selected.

Load a File option should be selected in order to upload the required PCF Information File.

13 Page 13 Figure 3d: Submitting PCF Information File 6. The User will be presented with an online screen. Load a File option should be selected in order to upload the required PCF Information File. Figure 3e: Submitting PCF Information File 7. The User must then click Browse and locate the previously saved PCF Information File, which should be named as prescribed earlier in Section 3.

14 Page 14 Figure 3f: Submitting PCF Information File 8. Once the file is located, the User must click the Load File button. Figure 3g: Submitting PCF Information File 9. The User will receive an automated confirming that the file has been accepted (If the file is rejected, steps 19 and 20 below must be referred to). 10. Once the has been received (which should be within two minutes) the User must click on the Refresh page button in order to update the Status on the current ONR screen from Queued to Accepted.

Union PCF In Situ Return 2018 Regulations tab in order to finalise the return.

15 Page 15 Figure 3h: Submitting PCF Information File 11. Once the file has been accepted, the User must select View/Sign-off Returns from Credit Union PCF In Situ Return 2018 Regulations tab in order to finalise the return. Figure 3i: Submitting PCF Information File 12. The User must click on the Reporting Date. Figure 3j: Submitting PCF Information File

Page 16 13. The User must then click on the Finalise button. The return is now ready to be signedoff for submission to the Central Bank. Figure 3k: Submitting PCF Information File 14.

The Sign Off button must be clicked to proceed to the final sign-off stage Figure 3m: Submitting PCF Information File 16.

16 Page The User must then click on the Finalise button. The return is now ready to be signedoff for submission to the Central Bank. Figure 3k: Submitting PCF Information File 14. The Back button must be clicked, which will navigate to the previous page. Figure 3l: Submitting PCF Information File 15. The Sign Off button must be clicked to proceed to the final sign-off stage Figure 3m: Submitting PCF Information File 16. Before signing-off the return, the User must accept the declaration statements contained in the Sign-Off Return screen by ticking the declaration boxes (Figure 3n refers). The declarations confirm that the information being provided in the uploaded file is correct and that the Chair has confirmed that the credit union:

17 Page 17 a) has performed the necessary due diligence as detailed in the 2018 Guidance on Fitness and Probity for Credit Unions in respect of persons set out in the attached list; b) are satisfied on reasonable grounds that these persons are compliant with the Fitness and Probity Standards for Credit Unions; and c) has obtained each person s written agreement to abide by the Fitness and Probity Standards for Credit Unions. 3 Figure 3n: Submitting PCF Information File 17. Once the declaration boxes have been ticked, the User must click on the Sign-off Return button. 3 Once a submission has been made, the Central Bank will consider that the User with Administrator access is acting on behalf of the Regulated Entity and that all declarations are made on behalf of the Regulated Entity.

18 Page 18 Figure 3o: Submitting PCF Information File 18. A confirmation message will appear to confirm that the return has been successfully signed off. The return has now been submitted to the Central Bank. The User will also receive an confirming the successful submission of the PCF In Situ return. Figure 3p: Submitting PCF Information File 19. If the file has not been completed in line with instructions set out in Section 3, it will be rejected.

19 Page 19 Figure 3q: Submitting PCF Information File 20. The User must refer back to the Data Validation worksheet on their previously saved PCF Information File to identify errors that may have caused the rejection (If the file has no errors then the ONR Team should be contacted for assistance as per Section 5). Please refer to Section 3 for guidance on identifying and correcting errors. Once the errors have been corrected, step 1 to step 17 as outlined above must be completed in order to successfully upload the PCF Information File.

Page 20 Section 5: Queries The Regulatory Transactions Division (RTD) in the Central Bank will manage all queries regarding the submission of PCF In situ Return.

20 Page 20 Section 5: Queries The Regulatory Transactions Division (RTD) in the Central Bank will manage all queries regarding the submission of PCF In situ Return. The contact number for queries is Alternatively, please either use the Submit a Request facility on the ONR (Figure 4 refers) or onlinereturns@centralbank.ie Figure 4: Queries

21 Appendix 1 Page 21 List of PCF roles for use in the Credit Union PCF In Situ Return 2018 Regulations PCF Information File: PCF Description CUPCF-3 Risk Management Officer CUPCF-4 Head of Internal Audit CUPCF-5 Head of Finance

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