The Central Bank of Ireland’s new blueprint for modern delegation 

Des Fullam, Chief Regulatory and Client Solutions Officer, Carne 

Delegation has long been a defining characteristic of the European funds industry, enabling access to specialist providers while authorised management companies retain ultimate responsibility for governance and oversight. The Central Bank of Ireland’s latest review reinforces that the model itself is not under question, concluding that governance frameworks, oversight processes and control environments are generally strong across the sector.

Beyond its findings on current practice, the review also signals the direction of supervisory travel. Taken together, its observations describe a delegated operating model built on independent governance, clear accountability, effective challenge and timely access to reliable information. Technology, data and demonstrable oversight are emerging as increasingly important components of effective governance. 

From theory to practice in governance 

One of the strongest themes running through the review is that governance is now judged not simply by organisational design, but by how effectively it operates in practice. 

Across governance, portfolio management, risk management and delegate oversight, the Central Bank repeatedly returns to the importance of independence, accountability and effective challenge. Boards should have the appropriate composition and authority. Designated Persons should have sufficient seniority and capacity. Oversight should be exercised locally, rather than relying too heavily on group structures or delegated reporting. 

Throughout the review, the emphasis is on demonstrating effective oversight in practice. Whether considering governance, portfolio management or risk management, the expectation is that authorised management companies can evidence informed decision-making, independent challenge and meaningful engagement with delegated activities, rather than relying solely on established processes or periodic reporting. 

These are not new regulatory concepts. What is notable is the consistency with which they appear throughout the review. Rather than treating governance as a discrete workstream, the review presents it as the thread connecting every aspect of a delegated operating model. 

That reflects a broader evolution in supervisory thinking. Governance arrangements are expected not only to exist, but to enable informed decision-making, independent judgement and effective oversight as markets and operating models become more complex. 

Timely, reliable and connected data has become crucial 

The importance placed on data is equally striking. Historically, discussions around delegation have centred on governance frameworks, policies and oversight processes. While these remain fundamental, the review places growing emphasis on the quality of information that supports decision-making. It specifically calls out fragmented systems, manual reconciliation and limited contingency planning as areas where some firms need to strengthen their capabilities. 

This reflects increasing pragmatism among European regulators. As firms oversee larger, more complex delegated operating models, effective governance depends on timely, reliable and connected information. Boards and Designated Persons need visibility across delegates, risks and operational activity if they are to exercise meaningful challenge and fulfil their regulatory responsibilities. 

Technology, therefore, is no longer simply an operational enabler. It is becoming an increasingly important part of the governance framework itself. 

Implications beyond the Irish funds sector 

Although the review focuses purely on Irish-authorised Fund Management Companies, its relevance extends beyond a single jurisdiction. As the regulator behind one of Europe’s leading domiciles, many of the themes identified by the Central Bank echo supervisory priorities emerging across international markets. Accountability, demonstrable oversight, effective governance and stronger data capabilities are increasingly common regulatory expectations, regardless of the specific framework through which they are expressed. 

For firms operating delegated models, the review provides a useful benchmark against which boards and management companies can assess the maturity of their own governance, oversight and data capabilities as supervisory expectations continue to evolve. 

The review also forms part of a broader programme of supervisory work. With the Central Bank expected to consult on the future of the Fund Management Company framework in 2027, firms should expect the themes raised here to remain firmly on the regulatory agenda. 

The delegation model in fund management remains well established. What continues to evolve is the evidence regulators expect to see that it is working effectively in practice. 

For more on regulatory expectations as they evolve, register now for our next RegsRadar webinar.