Ireland: The Central Bank’s Themed Reviews, Inspections And Enforcement Priorities For 2014

On 25 February 2014, the Central Bank of Ireland (the "Central Bank") published its planned series of Themed Reviews and Inspections for 2014, as well as its 2014 Enforcement Priorities. The publication of these lists by the Central Bank provides an opportunity for regulated entities to assess and raise compliance standards, where necessary, in "key risk areas" referred to on these lists.

It should be noted that themed reviews and inspections may form the basis for future regulatory or enforcement actions where breaches are identified. During 2013, the Central Bank entered into 16 enforcement settlement agreements with regulated entities, with fines totalling €6,348,215 being imposed.

2014 PROGRAMME OF THEMED REVIEWS AND INSPECTIONS

The main themes for 2014 are as follows –

Anti-Money Laundering Compliance

Anti-Money Laundering ("AML"), Countering the Financing of Terrorism and Financial Sanctions This area continues to be a priority for the Central Bank both as part of the themed reviews and on the enforcement side. Regulated entities should ensure that they have the necessary arrangements in place to satisfy the Criminal Justice (Money Laundering and Terrorist Financing) Act, 2010 (as amended in June 2013 by the Criminal Justice Act, 2013). From the Funds Industry perspective, the Sectoral Guidelines were finalised in December 2013. While these are subordinate to both the Act and the Core Guidelines, it is likely that the Central Bank will have regard to these Guidelines when conducting its on-site inspections.

Funds

While the Central Bank has, for some months, been conducting a sample survey of fund boards' and fund managers' compliance (or otherwise) with the IFIA Corporate Governance Code for Collective Investment Schemes and Management Companies ("the Code"), it will now form part of the themed inspections. The focus is to assess corporate governance arrangements for regulated fund and fund manager entities under the Code.

MiFID Firms and IIA Business Firms

The following areas are relevant to both firms authorised under the Markets in Financial Instruments Regulations (as amended) ("MiFID") and firms authorised under the Investment Intermediaries Act, 1995 (as amended) ("IIA") –

  • Data integrity of regulatory returns – This will examine the data contained in regulatory capital returns submitted by investment firms and fund service providers;
  • Client assets – This will focus on compliance with the current Client Assets Requirements.

In addition, MiFID Firms will be subject to a review of their compliance with –

  • Conduct of Business for Investment and Stockbroking Firms – In particular firms' arrangements in relation to the procedures for data collection to satisfy client categorisation and suitability requirements will be reviewed.

Separately, IIA firms that deal with Irish consumers should be aware that the Central Bank will focus on the following areas under the Consumer Protection Code –

  • Advertising Requirements - A review of compliance with advertising requirements;
  • Provision of Information on Fees and Charges – Assessment of whether information provided to clients on fees and charges is fair, clear and not misleading.

Retail / Insurance Intermediaries

The Central Bank has indicated that it will seek to take action against intermediary firms which are un-contactable/fail to engage appropriately with the Central Bank.

Otherwise, the following areas are relevant to retail intermediaries regulated by the Central Bank –

  • Newly Authorised Firms – The Central Bank will inspect these firms to analyse compliance with selected conduct of business obligations;
  • Professional Indemnity Insurance ("PII") – The Central Bank will review insurance intermediaries' compliance with PII requirements;
  • Solvency/Financial Position – The focus will be on retail intermediaries' compliance with prudential requirements.

The Central Bank has advised that in addition to this planned series of inspections, it will continue to conduct additional reactive inspections on key issues and themes as they arise throughout the year.

2014 ENFORCEMENT PRIORITIES

The Central Bank publishes Enforcement Priorities annually in order to help promote compliance in the areas that are of greatest importance to the Central Bank. All enforcement action taken by the Central Bank during 2013 (see above) related to one or more of the 2013 Enforcement Priorities.

The Enforcement Priorities for 2014 are –

All Sectors

  • Fitness and probity obligations under the Central Bank Reform Act 2010;
  • AML / Counter Terrorism Financing compliance.

MiFID Firms

  • Prudential requirements (with a focus on large exposures);
  • MiFID conduct of business rules;
  • Client Asset Requirements;
  • Timeliness and accuracy of information submitted to the Central Bank;
  • Systems & controls.

IIA Business Firms

  • Firms which fail to engage appropriately with the Central Bank.

Insurance

  • Prudential requirements;
  • Systems & controls.

Continuing Priority Areas

Central Bank enforcement continues to focus on certain areas across almost all industry sectors, most notably, prudential requirements and systems and controls. As well as being consistently highlighted as enforcement priority areas, a large proportion of the settlements reached by the Central Bank concern breaches of requirements in these areas.

The Central Bank has advised that it views the existence and proper functioning of a firm's systems and controls as being fundamental to ensuring its compliance with its regulatory requirements. The existence of inadequate systems and controls, incomplete procedures and/or a failure to employ effective resources is an unacceptable risk to the Central Bank as it can be the basis for and potentially leads to large scale detriment to consumers.

Central Bank enforcement actions also relate to issues identified through day-to-day supervisory work and from other information sources such as whistleblowing.

CONCLUSION

It can be seen from the above there is an overlap between the areas identified by the Central Bank as "key risk areas" and forming a part of its 2014 Themed Reviews and Inspections and those areas included in the 2014 Enforcement Priorities, namely Anti-Money Laundering compliance and compliance with conduct of business rules and the Client Assets Requirements. It is also clear that the Central Bank expects regulated entities to have appropriate systems, controls and procedures in place to meet with their regulatory obligations.

Regulated entities are advised to examine their businesses in light of the Central Bank's 2014 Programme of Themed Reviews and Inspections and Enforcement Priorities and to refine their compliance arrangements, where necessary.

The Central Bank press releases in relation to both the Central Bank's 2014 Programme of Themed Reviews and Inspections and its 2014 Enforcement Priorities may be accessed via the following links:

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesProgrammeofThemedReviews.aspx

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesEnforcementPrioritiesin2014.aspx.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions