The 2025 SEAR Expansion: Implications for Covered Firms in Ireland

Accountability in financial services regulation in Ireland has been reshaped by the Individual Accountability Framework (IAF) and, at its core, the Senior Executive Accountability Regime (SEAR). In July of 2025 the regulation was extended to cover non-executive directors.  

With SEAR now fully implemented, in-scope companies should now have compliance frameworks in place to ensure personal accountability and demonstrate oversight and clarity across executive and non-executive leadership. 

About the Individual Accountability Framework  

Signed into law on 9 March 2023, the Individual Accountability Framework (IAF) is a regulatory framework introduced by the Central Bank of Ireland to strengthen governance and oversight across financial services in the country.  

IAF has four key pillars: the Senior Executive Accountability Regime (SEAR), which assigns clear responsibilities to senior executives; Conduct Standards, which set baseline expectations for individuals and firms; enhancements to the Fitness & Probity regime, ensuring individuals remain suitable for their roles; and stronger enforcement powers that allow the Central Bank to hold individuals directly accountable for regulatory breaches. 

About the Senior Executive Accountability Regime  

The Senior Executive Accountability Regime (SEAR) is a core part of the Individual Accountability Framework. SEAR applies to individuals in pre-approval controlled functions (PCFs) within regulated firms. It requires senior executives to take “all reasonable steps” to prevent regulatory breaches in the areas they oversee, with responsibilities formally documented through Statements of Responsibilities and a Management Responsibilities Map.  

Implemented progressively, SEAR took effect for executive PCFs on 1 July 2024 and will extend to non-executive directors from 1 July 2025. 

The 2025 SEAR Expansion: What's Changing 

Regulations 5, 6(3), 6(5) and 10(2) of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Senior Executive Accountability Regime) Regulation will now apply to: 

• Non-Executive Directors (NEDs) – board members who do not take part in the day-to-day management of the firm but provide independent oversight and challenge to executive management. 
• Independent Non-Executive Directors (INEDs) – NEDs who meet additional independence criteria, such as having no material relationship with the firm, its management or significant shareholders, ensuring unbiased oversight. 
• Chairpersons – individuals responsible for leading the board of directors, setting its agenda, and ensuring effective governance and decision-making within the firm. 

This expansion establishes personal accountability for all directors of in-scope companies regardless of their executive status. It reflects the Central Bank’s focus on ensuring that accountability under SEAR extends beyond executive management to the broader governance structures of regulated firms. This creates uniform responsibility requirements across the entire board structure.  

Implications of SEAR for In-Scope Firms 

The extension of SEAR to a broader range of governance roles requires covered firms to update their documentation requirements and policies and procedures regarding roles and responsibilities.  

Documentation and Governance Requirements 

The extension of SEAR to non-executive directors requires firms to update their documentation frameworks to meet Central Bank regulatory requirements. Three key documentation areas need immediate attention from in-scope institutions. 

• Statements of Responsibilities for Non-Executive Directors that clearly outline prescribed responsibilities. 
• Management Responsibilities Map: Updates that describe how roles and responsibilities are shared across the organisation. These maps must include names and ensure that there are no gaps in material responsibilities.  
• Governance Structure Alignment Review that documents how board members contribute to decision making, clarifies lines of reporting and explains the rationale for joint allocation of responsibilities. 

Cross-Border Complexity: SMCR and SEAR 

Firms operating across Irish and UK jurisdictions face compliance challenges when managing the relationship between SEAR and the UK's Senior Managers and Certification Regime (SMCR). Both regimes aim to increase individual accountability, encourage personal responsibility and promote better governance. SEAR was modeled on SMCR, yet critical differences do exist: 

Scope: SEAR is tailored to the Irish regulatory framework with specific requirements for PCF roles, whereas SMCR provides a broader application across various types of regulated firms in the UK, encompassing both senior managers and certified individuals. 

• Prescribed responsibilities: SEAR uniquely requires senior accountability for climate-related risks and diversity and inclusion policies 
• Reporting obligations: While the UK requires annual reporting of conduct rule breaches, Ireland takes a more subjective approach, requiring "prompt and appropriate" reporting. 
• Suspected breaches: In Ireland, suspected standard breaches must be reported as "prescribed contraventions," unlike the UK's post-disciplinary reporting. 
• Sanctions: Irish fines are capped at €1 million, versus the UK's uncapped framework, which is based on a percentage of remuneration. 
• No regulatory references: Unlike SMCR in the UK, SEAR does not require firms to request, verify, or retain formal regulatory references when appointing senior executives or directors, leaving firms responsible for assessing candidates’ suitability through internal processes. 

The key takeaway from these differences? Firms with dual-jurisdiction operations must establish distinct compliance processes rather than assuming that one framework satisfies both regimes. 

MCO Helps Firms to Meet IAF/SEAR Requirements 

MyComplianceOffice enables firms to efficiently and effectively meet IAF/SEAR obligations on a single compliance platform.  With MCO’s Roles and Responsibilities Management solution firms can capture executive and non-executive senior management functions and classify where responsibility and decision-making lie for compliance with both SEAR and SMCR requirements. 

Ready to learn more about how MCO helps firms across Ireland manage Roles and Responsibilities, Conduct Standards and automation of Fitness and Probity assessments, for compliance with SEAR requirements and the IAF regime?