Table of Contents
Section 1: Background ....................................................................................................................... 6
Section 2: Purpose and Effect of this Guidance .......................................................................... 9
Section 3: Implementation Approach ........................................................................................ 11
3.1 Phasing the Fitness and Probity regime ....................................................................... 11
3.2 The Regulations ........................................................................................................... 11
3.3 The Standards .............................................................................................................. 12
3.4 Ongoing compliance for Controlled Functions ............................................................ 13
Section 4: Controlled Functions ................................................................................................... 14
4.1 What is a Controlled Function?.................................................................................... 14
4.2 How does a credit union know if a person is performing a CF? ................................... 14
4.3 What standard of fitness and probity is appropriate to the particular CF? ................. 15
4.4 Obligations on a CF with respect to those persons captured by the definition of a
CF…………. ..................................................................................................................... 16
4.5 Obligations on the credit union with respect to those persons captured by the
definition of a CF .......................................................................................................... 17
4.6 What happens if a person is promoted into a CF role or if a person changes role in the
credit union? ................................................................................................................ 17
4.7 Person(s) seeking to hold multiple CF roles ................................................................. 18
Section 5: Pre-approval Controlled Functions ........................................................................ 19
5.1 What is a Pre-approval Controlled Function? .............................................................. 19
5.2 In situ PCFs ................................................................................................................... 20
5.3 Person(s) seeking to hold multiple PCF roles ............................................................... 20
5.4 PCF roles in credit unions that undergo transfers of engagements ............................. 21
5.5 PCF roles in credit unions that undergo amalgamations ............................................. 21
5.6 Persons performing PCF roles on a temporary basis (including acting and/or interim
appointments) ............................................................................................................. 21
Section 6: Approval Process for PCFs ........................................................................................ 23
6.1 Approval process for PCFs ........................................................................................... 23
6.2 PCFs subject to re-election or re-appointment (including in situ PCFs) ....................... 25
6.3 In situ PCFs who are subject to employment contract renewals ................................. 26
6.4 Offers of appointment to manager/risk management officer/head of internal
audit/head of finance .................................................................................................. 26
6.5 Approval for persons with equivalent EEA approvals .................................................. 27
6.6 Appeals Process ........................................................................................................... 27
Section 7: Due Diligence ................................................................................................................. 28
7.1 How do credit unions conduct due diligence? ............................................................. 28
7.2 Determining the standard of fitness that is appropriate to the particular CF ............. 29
7.3 Fitness – due diligence to be undertaken by a credit union to assess a person’s fitness
to perform a CF(s) ........................................................................................................ 29
7.4 Competence required for CFs in credit unions ............................................................ 32
7.5 Probity – determining the standard of probity ............................................................ 33
7.6 Probity – Due diligence to be undertaken by a credit union to assess a person’s probity
to perform a CF(s) ........................................................................................................ 33
7.7 Probity – Additional due diligence for PCFs, CUCF-1 and CUCF-2 ................................ 36