What are the key changes?
Under Part IIIC of the Central Bank Act 1942 (as amended), the Central Bank can investigate any matter where it has a concern that a prescribed contravention has been or is being committed. Where there are reasonable grounds for such a concern, an Inquiry may be held. The Inquiry will be a formal process with a formally appointed panel that will follow rules of due process and decide if the prescribed contravention has occurred and determine the appropriate sanctions.
A person or firm who is the subject of an Inquiry may resolve the matter at any time prior to a decision being reached by entering into a settlement agreement with the Central Bank. The new Inquiry Guidelines set out specific discounts whereby up to 30% discount may be applied if a settlement is reached in the first stage of the Inquiry and a maximum 10% discount can be applied where a settlement is reached in the second stage.
A prescribed contravention would include a breach of:
- A provision in legislation
- A code, or a direction, given pursuant to legislation
- A condition or requirement imposed on a "regulated financial service provider"
- Any obligation imposed on a regulated financial service provider by the Central Bank
The Central Bank has a number of enforcement tools which it can use, following an inquiry including:
- Caution or reprimand
- Direction to refund or withhold all or part of money charged or paid, or to be charged or paid, for the provision of financial service by a financial service provider
- A direction to pay the Central Bank a monetary penalty (not exceeding the greater of €10,000,000 or 10% of turnover where the financial service provider is a body corporate or an unincorporated body and not exceeding €1,000,000 where the financial service provider is a natural person and for persons concerned in the management of a financial service provider)
- Disqualification of a person from being concerned in the management of a regulated financial service provider
- Revocation or suspension of an authorisation
- Direction to the regulated financial service provider to cease committing the contravention
- Direction to pay the Central Bank all or part of its costs incurred by the Central Bank in the investigation of the matter and the holding of an Inquiry
In 2013, the Central Bank concluded 16 settlement agreements totalling fines of €6,348,215 and disqualified two individuals. This includes a fine of €5,000,000 against Quinn Insurance Limited (under administration), which was waived by the Central Bank in the public interest.
Matheson held a Client Breakfast Briefing on the topic of Enforcement in November 2013, at which members of the Central Bank's Enforcement division spoke, including the Director of Enforcement Derville Rowland. It is expected that 2014 will be "the year of the Inquiry" and the Central Bank has indicated that criminal actions against individuals will be considered where they feel it is warranted due to the grave nature of the behaviour of the individual, which is the subject of the administrative sanction or Inquiry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.