Debt management firms will have to comply with new regulations which will be issued by the Central Bank at the end of September.
These new regulations will include minimum competency standards, including a proposal that any person involved in debt management will have a ‘qualified financial adviser’ recognised qualification.
“It is proposed that the qualification of ‘qualified financial adviser’ (Institute of Bankers School of Professional Finance, LIA and The Insurance Institute of Ireland) will be included in the minimum competency code as a recognised qualification for persons exercising certain functions in a debt management firm and the Central Bank welcomes the views of interested parties on any other qualifications that might be considered appropriate and the reasons why those qualifications might be appropriate.
“It is proposed that there will be a transitional period of four years from the commencement of the 2013 Act to allow all persons who are seeking authorisation as a debt management firm to obtain a relevant qualification.”
The Central Bank has invited submissions to arrive before Sept 23, with final guidelines issued on Sept 30.
A firm must also meet minimum solvency standards, which includes having insurance cover to the total value of the debts in respect of its clients or at least cover that exceeds €1.5m with no limit on the amount of claims in any one year.
The firms must have robust governance systems in place as well as a clear organisation structure. There are also strict guidelines on when reports to the Central Bank and what disclosures it is required to make.
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