Key appointments / departures

The Central Bank of Ireland (the "Central Bank") announced in April 2013 that the Deputy Governor, Matthew Elderfield, intended to step down from his position, and is due to leave the Central Bank later in the year. In recent days, it has been confirmed that Mr Elderfield will join the Lloyd's Banking Group as Director of Conduct and Compliance. In January 2013 it was announced that Peter Oakes, Director of Enforcement was to step down from his position. Derville Rowland, formerly Head of the Enforcement 1 Division, was announced as the new Director of Enforcement in April 2013, following the departure of Mr Oakes. Sharon Donnery took up her position as the new Registrar of Credit Unions in February 2013.

Annual Report

On 30 April 2013, the Central Bank published its Annual Report 2012 and Annual Performance Statement Financial Regulation 2012 - 2013. The Annual Report focuses on the work done during 2012 and into early 2013, in particular, the restoration of financial stability to the Irish economy which is considered in detail in the Annual Report and includes the continued reform of and supervision of the repair of the domestic banking sector as well as the introduction of enhanced consumer protection measures – in particular in the area of mortgage arrears.

The Central Bank works to a periodic strategic plan, against which it measures its performance in both the Annual Report and the Annual Performance Statement Financial Regulation 2012 – 2013. The Central Bank of Ireland Strategic Plan 2013–2015 which was published on 20 November 2012 sets out the key strategic priorities over the coming years.

Enforcement Priorities

The Central Bank has published its 'Enforcement Priorities for 2013', identifying its priority areas for enforcement activity in the year ahead. In the most part this year's priorities reflect those published in 2012, although there are some new entries on the list – 'Errors and Overcharging', 'Payment Services Regulations' and 'Suitability Requirements (Consumer Protection Code – 2012)'. The full list for 2013 is as follows:

  • Retail Intermediaries;
  • Payment Protection Insurance;
  • Client Asset Requirements;
  • Prudential Requirements;
  • Anti-Money Laundering and Counter Terrorist Financing;
  • Systems and Controls;
  • Timeliness and Accuracy of Information submitted to the Central Bank;
  • Errors and Overcharging;
  • Payment Services Regulations; and
  • Suitability Requirements (Consumer Protection Code - 2012).

The Central Bank has confirmed that priorities identified for 2013 are those areas of greatest concern to the supervisory divisions within the Central Bank. 'Mortgage Arrears', 'Transaction Reporting' and 'Dissemination of inaccurate / incorrect information in the market (Transparency and Prospectus Directives)' all prioritised in 2012 did not feature in the 2013 list. Commenting on the publication Derville Rowland confirmed that the '... priorities are aligned to the themes identified in the Central Bank's 'Programme for Themed Reviews and Inspections for 2013' and are also based upon the planned interactions with regulated entities as governed by PRISM. 'Enforcement plays an important role within the PRISM framework providing both a credible threat and acting as a deterrent to those who are non-compliant, particularly in respect of low impact firms with whom we do not have a close regulatory relationship'. Where breaches are identified in priority areas the message is that robust enforcement action can be expected.

Programme for Themed Reviews and Inspections for 2013

Also published in February was the Central Bank's 'Programme for Themed Reviews and Inspections for 2013' in which it confirms that the following areas are targeted under this heading:

  • Code of Conduct on Mortgage Arrears (and the Central Bank has also confirmed that it intends to issue a revised CCMA later this year).
  • Remuneration and sales incentives in entities in the banking, insurance, investment and stockbroking sectors.
  • Provision of information to consumers by investment and stockbroking firms on investment products, fees and charges, and other issues.
  • Property insurance claims handling.
  • Retail intermediaries compliance (insurance, investment and mortgage intermediaries.
  • Moneylenders – Review of moneylending firms with a focus on the maximum APR and maximum cost of credit that such firms are permitted to charge
  • Outsourcing by MiFID firms and fund custodians.
  • Post-authorisation application of business plans to delegating UCITS and non-UCITS managers.
  • Review of MiFID firms to assess compliance with client asset requirements.
  • Review of governance on pricing procedures including arrangements on the pricing of certain hard-to-value assets within fund and investment manager client portfolios.
  • Data integrity of regulatory returns – the examination of data contained in regulatory returns submitted by funds and MiFID firms.
  • AML / CFT and financial sanctions will also be the subject of desk top and on sight inspections. (See the separate article on AML / CFT in this ezine.)

In addition to the planned series of inspections, the Central Bank will also continue to conduct additional reactive inspections on key issues and themes as they arise throughout the year.

Enforcement action taken to date

So far this year, there have been details of only three settlement agreements published by the Central Bank. Interestingly, one of these related to breaches of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (as amended) and the Central Bank's Market Abuse Rules by the C&C Group plc. The breaches amounted to a failure to maintain insider lists by the C&C Group plc which whilst a listed company, is not a "regulated entity".

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