#CP86
doesn't have to be doom & gloom
#CP86 SITUATION
CP86 is a body of work undertaken by the Central Bank of Ireland concerning fund management company effectiveness.
The final package of CP86 measures came into effect on 1 July 2018.
In June 2019, the Central Bank commenced a review process to assess how well fund management companies and self-managed investment companies (SMICs) are complying with CP86.
This review process will include on-site inspections for a number of Irish authorised fund management companies and SMICs.
#CP86 SOLUTION
Be Prepared while ensuring a solid foundation to build upon:
Aquest is providing a comprehensive, bespoke-to-you, 5-part long CP86 Inspection Preparation Advisory.
Full details are presented on this page.
For further information and/or to book your firm’s CP86 Inspection Preparation Consulting Service, email daniellawlor@aquest.ie.
THE CP86 Inspection Preparation advisory
Objectives, Outcomes & Value
#CP86Solution
Objectives:
Short-term:
Ensure you are fully prepared for an on-site inspection by the Central Bank of Ireland that results in the best possible outcome for your firm across people, processes and profitability.
Long-Term:
Ensure your firm has a solid foundation to build upon while improving your ongoing relationship with the Central Bank.
#CP86Solution
#CP86Solution
Outcomes:
Fund management companies that engage the CP86 Inspection Preparation Advisory will:
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Know what to expect when the Central Bank performs an inspection with more than 80% accuracy
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Be prepared for and perform better in interviews with the Central Bank
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Understand the Central Bank’s perspective on CP86 and its areas of focus so you can compare and contrast those with your firm’s current situation
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Understand where your areas of weakness are in your documentation and/or operations so you can prioritise and action problem areas in advance of an inspection
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Work hard to improve your relationship with the regulator
#CP86Solution
#CP86Solution
Value:
Fund management companies that undertake the CP86 Inspection Preparation Advisory will gain value in four key areas from hour one.
Business Continuity:
Being prepared for an on-site inspection facilitates the highest probability of business continuity with existing clients, potential business and you and your firm’s industry reputation
Reduce:
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the likelihood of costly regulatory fines and damaging public sanctioning
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the stress involved with being subjected to a regulatory inspection
Optimise:
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Your relationship with the Central Bank to be in the best possible position now and well into the future
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staff retention, company productivity, morale and culture by clearly demonstrating management’s support for them in what can be an intensely stressful time
Independent Voice of a fund lawyer and ex-regulator who co-authored CP86
To reinforce the messages where change is necessary but continues to be resisted by HQ
#CP86Solution
MEET YOUR FACILITATOR
As the former head of the Central Bank’s Funds Policy Team and the Central Bank of Ireland’s Project Lead on CP86, Daniel was involved in designing, drafting and implementing regulatory initiatives affecting the funds industry from 2010 to 2017.
With an intimate knowledge of CP86 coupled with the perspective of an ex-regulator, Daniel is in a unique position to help firms improve their relationship with the financial regulator by becoming Regulator Intelligent.
Before joining the Central Bank, Daniel worked as an investment funds lawyer for 9 years at William Fry, one of Ireland’s leading law firms.
Today, Daniel is MD of Aquest; a boutique firm dedicated to improving your experience with the financial regulator.
THE 5-PART #CP86 Inspection Preparation advisory
Phase 1
Setting us up for success
Intake form issued: a set of questions to be completed in advance of our first on-site meeting
Inspection Process Overview issued: a document shared with you to review in advance of our first on-site meeting
Inspection Preparation Timeline issued: a document shared with you to review in advance of our first on-site meeting
Execute our mutual NDA
Completed CB Questionnaire - Documentation submitted to the CB to be shared with Aquest by the end of our first on-site meeting
Lay of the Land meeting scheduled with all relevant firm stakeholders
#CP86Solution
PHASE 2
‘Lay of the land’ workshop
On-site meeting with Daniel Lawlor to explore the:
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fund management company’s preparations provided to the Central Bank
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understand the concerns that the fund management company might have,
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share the concerns Daniel Lawlor has about the current situation
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ensure full clarity of what the inspection process will involve and the likely outcomes
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devise a plan to ensure that the fund management company uses its preparation time effectively during and after the CP86 Inspection Preparation Consulting service.
#CP86Solution
PHASE 3
Full Analysis of your Submission
Daniel Lawlor will analyse your entire submission to the CB before providing you with a full report on what you can expect when they are inspecting.
Daniel Lawlor will undertake a review of the completed Central Bank questionnaire and supporting documentation submitted by the fund management company to the Central Bank for the desk-based review.
The formal report will provide a clear picture of the fund management company’s
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strengths
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weaknesses
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red flags
Daniel will highlight the areas;
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most likely to be questioned during an inspection
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potential areas that may be questioned during an inspection
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that will strengthen and support your position
#CP86Solution
Phase 4: OPTION 1
Full day on-site workshop
Daniel Lawlor will spend a full day on-site with the fund management company’s leadership team.
There are 2 options for how to structure your day: This will present option one.
OPTION ONE:
1-hour briefing session on CP86 to Designated Persons and Directors to cover:
Background & rationale for CP86
Summary of key contents of CP86
PRISM & the CB's approach to supervision & inspections
The CB's CP86 inspection process and key areas of focus
Up to x6 1-1 ‘mock’ interviews lasting 30 minutes each w/ Designated Persons & Directors conducted by Daniel Lawlor assuming the role of a CB inspector.
CP86 Preparation Workshop
Feedback on interviews: strengths, weaknesses and red flags
Insights on CP86-related areas that the CB are likely to focus on
Insights on general legal and regulatory matters that the CB are likely to probe further
How to use your time to prioritise actions in preparation for an inspection
#CP86Solution
PHASE 4: OPTION 2
Full day on-site workshop
Daniel Lawlor will spend a full day on-site with the fund management company’s leadership team.
There are 2 options for how to structure your day: This will present option two.
OPTION TWO:
3hr CP86 Process Workshop:
CP86
Context for a CP86 inspections
Fund manco ecosystem
Post CP86 developments
CP86 areas of focus for your firm specifically the dominant Overarching themes
Regulator mindset when conducting inspections with your firm, specifically in light of your submission
How inspections are conducted in practice and then specifically what you can expect based on your submission.
How regulatory inspections fit into the PRISM model of supervision:
Types of inspections
Inspection process
Outcome
Likely output from CP86 review process
Next steps
Practicalities of preparing for an inspection
Pitfalls and common mistakes
Tips based on your submission to the Central Bank of Ireland
Fund Management Company and CP86
Overarching impressions following review of the fund management company’s documentation
Any significant/obvious gaps identified in CP86 compliance
Areas that the Central Bank is like raise focus
Approach of peers
Interactive Q&As throughout the session
2.5hr CP86 Preparation workshop:
tease out any areas of weakness issued identified in the interactive session and brainstorm how these can be addressed; and
discuss how the Designated Persons, directors and Organisational Effectiveness role are carrying out their roles in practice, understand the regulatory expectations around how these roles should be carried out and address any concerns or issues arising
#CP86Solution
PHASE 5
Support during an inspection
Should you be inspected by the CB in regards to CP86, Daniel will provide you with active inspection guidance to support your firm in how to best navigate the process while simultaneously working with you to improve your relationship with the regulator.
#CP86Solution