Get Ahead, Be Regulator Ready

Consultation Paper 86, otherwise known as (‘CP86’) was introduced by the Central Bank of Ireland (‘Central Bank’) to identify standards of industry compliance in order to form a supervisory approach for fund management companies (‘ManCos’) and to ensure that the required effectiveness and systems of governance are in place to protect investors’ best interests. It was also an opportunity for the Central Bank to set out clear expectations of how Directors and Designated Persons should carry out their role and how best to demonstrate compliance.

To assess the behaviour of ManCos, the Central Bank carried out a CP86 Thematic Review which was carried out in three phases. Phase 1 was an information questionnaire issued to fund management companies and Self-Managed Investment Companies, focusing on seven core areas:

• Governance and Business Model
• Delegate Oversight
• Organisational Effectiveness
• Directors’ Time Commitments
• Managerial Functions
• Operational Issues
• Procedural Matters

Once responses were analysed, phase 2 began whereby selected firms underwent desk based reviews and answered specific questions around managerial functions and the organisational effectiveness role. Phase 3 consisted of face-to-face interviews with several members of the management team relating to the implementation of various aspects of CP86.

As Irish ManCos await the upcoming ‘Dear CEO’ letter, they can expect the Central Bank to have identified a number of weaknesses following their inspection of firms. These pitfalls will more than likely be associated with ManCos having weak processes, systems and controls and box ticking exercises as a way to demonstrate their compliance — which the Central Bank deems to be not a robust enough system.

The corporate governance tech era is now and it is vitally important that financial services firms adapt to this technological change. Built to meet the dynamic needs of ManCos, GECKO Governance allows companies to focus on managing CP86 requirements by having a holistic, real-time view of delegates, tasks and responsibilities. Those of you who are familiar with CP86 are aware of the role of the Designated Person (‘DPs’) and the many legal requirements they must adhere to, such as directorship appointment letters being kept up-to-date and include time allocation. This may seem like a tedious job for one person to document and keep track of at any given time, especially when requested by the regulator within a specific time-frame. GECKO can shave off time searching for documents and cut labour costs by having your supporting evidence at a click of a button.

Adherence to specific guidelines can also be achieved around the supervision of delegates in relation to investment management, distribution, risk management and investment operations and administration. With a clear oversight of delegates, delegated tasks and tasks to be retained, DPs can effortlessly record their engagement on reports received from delegates with our verifiable audit trail and have the ability to generate reports with our customisable reporting tool.

To give you a better understanding, the organisational effectiveness role that is encompassed into the CP86 regime involves a number of responsibilities that can be enhanced with GECKO Governance:

• Documenting and evidencing individual meetings with DPs. Have the ability to record meeting minutes and action items discussed;
• Easily retrieve and retain documents with our document repository. i.e. Separate letters of appointment must be held for the individual carrying out the role of the director/the Org Effectiveness role. These can be stored and easily retrieved with just 3 clicks of a button (GECKOs 3 Click Concept).
• Conflicts of interest — can be identified, addressed and solved from one area, including an audit trail with directors sign off/confirmations
• Customisable reporting tool — Slice and dice your data as you need it by generating your own customisable report, built with the criteria required. Ensuring review framework is in place to review delegate performance and ensure robust reporting.
• Exportable files — Documents are exportable in various file formats

GECKO can improve efficiency for the overall organisational effectiveness of the company and improve its focus on substance and resources to manage it’s outsourcing, regulatory oversight and Central Bank’s requests.

If you are interested to see how a fully customised and automated tool can assist your organisation, then book a 30-minute demo and see how GECKO can bring operational efficiencies for your business.