Supervision Process for UCITS Management Companies

General

The supervision process for UCITS Management Companies is consistent with the general supervisory approach carried out by the Central Bank. All Irish authorised financial service providers, whether engaged in international or domestic activities, are expected to implement best practice.

Supervisory Process

The Central Bank’s supervision process is underpinned by its Probability Risk and Impact SysteM (PRISM) that sets out the Central Bank’s minimum engagement model with regulated firms. PRISM is a risk-based framework which looks to mitigate apparent risks within firms. For further information, visit PRISM Explained. The supervisory process undertaken includes, but is not limited to the following areas:

• Analysis of returns submitted to the Central Bank
• Risk-rating of firms
• Engagement meetings and assessment in line with the PRISM engagement model
• Full Risk Assessment process in line with the PRISM engagement model
• Themed Inspections  

Fitness & Probity

A sound and effective fit-and-proper test is a critical component of the regulatory regime. To ensure the proper discharge of their responsibilities, it is important that Directors and Managers have the skills to manage a UCITS Management Company.

“Fitness” requires that a person appointed as a Director or Manager has the necessary qualifications, skills and experience to perform the duties of that position. “Probity” requires that a person is honest, fair and ethical.

Before being appointed, a new Director or Manager must demonstrate that he/she meets the required fit and proper standards. The “Fitness & Probity test” involves the completion of an Individual Questionnaire (IQ) by the applicant.