Updated: Dec 12, 2019
No surprise that the Irish funds industry is working hard to get ready for CP86 on-site inspections.
As soon as CP86 came into effect in July 2018, the Central Bank of Ireland began flagging that CP86 inspections were coming. True to its word, the regulator’s CP86 review process kicked-off in June with an industry-wide questionnaire.
That was innocuous enough but the regulator upped the ante in August. It sent letters to a sample of ManCos and SMICs instructing them to file a range of CP86-related documents within weeks. Those documents form the basis of the next step - a desk-based review by the regulator.
Given the tens of thousands of pages submitted to the regulator, it’s fair to say that it will take the regulator’s review team a little bit of time to get through their desk-based review.
But once they do, the on-site reviews will begin and that will be the most testing (and stressful!) part of the CP86 review process.
Take a tip from the Boy Scouts and ‘Be prepared’!
The feeling across many in the industry has been mostly “where do we even start”?
A sense check of firms to date suggests ManCos are yet to resolve where to start, never mind how best to prepare.
There is a degree of uncertainty about what the regulator might focus on, how an on-site inspection works in practice and even more uncertainty about the potential outcomes from the CP86 review process.
How some ManCos are preparing for CP86 Inspections
Some ManCos are taking a very active approach to preparing for a possible CP86 on-site visit by engaging our 5-Part CP86 Inspection Preparation Advisory.
Rather than wait for an inspection notice, they have already planned for how they are going to best invest the Firm's time, energy and resources between now and the inspection date for the best possible outcome for their firm and their experience with the regulator.
ManCos are largely focussing on x3 key areas:
(i) identifying the ManCo’s strengths and weaknesses as evidenced in the submission the Firm made to the Central Bank of Ireland
(ii) preparing for interviews with the regulatory by investing a full day running 30-minute mock interviews with each member of the leadership team
(iii) using the inspection process as an opportunity to build and develop their relationship with the regulator
If your firm is feeling the strain of the CP86 review process and would appreciate access to Advisory type resources to access the point of view of the former head of the Central Bank’s Funds Policy Team and their Project Lead on CP86 as it specifically relates to your situation, you can.
ManCos that undertake the Aquest CP86 Inspection Preparation Advisory will:
1. Know what to expect from a regulatory inspection visit with more than 80% accuracy
2. Be prepared for and perform better in interviews with the Central Bank
3. Understand CP86 from the Central Bank’s point of view and its areas of focus so the ManCo can compare and contrast those with its current situation
4. Understand the ManCo’s primary areas of weakness in its documentation and operations so it can prioritise and action problem areas in advance of an inspection
5. Be well on their way to improving the ManCo’s experience with the regulator