The Central Bank of Ireland (the
"CBI") published new Inquiry Guidelines
for the Administrative Sanctions Procedure (the
"ASP") in November 2013. The purpose of
the new Inquiry Guidelines is to provide a greater level of detail
on the inquiry process. While inquiries were already permissible
under the ASP regime, none have been commenced to date. The Inquiry
Guidelines offer an insight into the form and order of proceedings
to be followed during the inquiry, as well as details of the
circumstances that an inquiry will take into account when
determining the appropriate sanctions to apply.
As far back as December 2010, the CBI had indicated in its Enforcement Strategy 2011-2012 that it expected to see a number of cases going to inquiry in 2011. More recently in 2013, the CBI has again indicated its intention that cases will soon be referred to inquiry. The publication of the Inquiry Guidelines suggests that the CBI is prepared to avail of this option and that inquiries will be a prominent feature of the CBI's enforcement activity in 2014.
The CBI's Strategy Statement 2013-2015 stated that "where individual responsibility is at the core of suspected breaches of financial services law", the CBI would focus its enforcement attention on where that responsibility fell. While regulated firms are more likely to avail of the settlement procedure and accept a fine, individuals may be less likely to admit to a prescribed contravention, as the impact of a fine and sanction will be significantly higher on an individual. A settlement agreement entered into by an individual may be considered by the CBI in assessing a subsequent application by that person to perform a pre-approval controlled function under the fitness and probity regime. We expect that individuals suspected of prescribed contraventions are the most likely cases to be referred to inquiry.
The Inquiry Guidelines offer an insight into the form and order of proceedings to be followed during the inquiry, as well as details of the circumstances that an inquiry will take into account when determining the appropriate sanctions to apply. Furthermore, it is confirmed that while the inquiry will be held in public, an inquiry can be adjourned to facilitate settlement, which is carried out in private. Administrative support for inquiries will be provided by the Regulatory Decisions Unit which acts as registrar to an inquiry and provides assistance on procedural matters and is the point of contact for the regulated entity. This is the unit that will issue a Notice of Inquiry to the regulated entity.
The preparations underway for the commencement of inquiries illustrate the CBI's continued focus on its enforcement strategy of "assertive risk-based supervision underpinned by a credible threat of enforcement". Under the new guidance of Derville Rowland, former Head of Enforcement, who last year replaced Peter Oakes as Director of Enforcement, regulated firms and persons concerned in the management of those firms can expect a credible threat of enforcement in 2014.
Matheson hosted a Client Breakfast Briefing on the topic of Enforcement in November 2013, at which members of the CBI's Enforcement division spoke, including the Director of Enforcement, Derville Rowland. The clear message from this briefing was that 2014 will be "the year of the inquiry".
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