The Central Bank (Supervision and Enforcement) Bill 2011 (the “Bill”) was published on 28 July 2011. The Bill will apply to financial service providers (“Providers”) regulated by the Central Bank and provides a range of additional powers for the Central Bank to ensure proper and effective regulation of financial services.
The Bill gives the Central Bank the power to require Providers to procure, at their own cost, an independent expert report on any matter specified by the Central Bank. The reviewer may be an auditor, actuary, accountant, lawyer or any other person with relevant business, technical or technological skills employed or otherwise engaged by the Provider. If the Central Bank is not satisfied with the reviewer chosen by the Provider it would be empowered to substitute its own reviewer.
The Bill provides for consolidation of the existing investigation regimes by granting the Central Bank the power to appoint Authorised Officers to investigate Providers and connected persons. The Authorised Officer would have significant powers to enter any premises relating to the business being investigated, to search and inspect premises and records, to operate computers and require that passwords be provided (if necessary), and to attend any meetings relating to the business of a Provider. It is an offence to resist or impede an Authorised Officer’s investigation, punishable by a fine of up to €250,000 and/or 5 years in prison.
The Bill provides protection from civil liability for whistleblowers and protection from victimisation by their employers. Any employer found guilty of victimisation commits an offence, punishable by a fine of up to €250,000 and/or 5 years in prison.
Significantly, the Bill imposes an obligation on persons appointed to a pre-approval controlled function within the meaning of the Central Bank Reform Act 2010 (senior or influential positions within financial service providers) to disclose any information in relation to offences and contraventions which have been or may be committed. Failure to disclose could be grounds for an investigation and action under the Central Bank’s fitness and probity regime.
The Bill provides for an increase in the maximum penalties under the administrative sanction regime from €5 million to €10 million (or 10% of turnover) for firms, and from €500,000 to €1 million for natural persons. The Bill also provides for persons convicted of an offence under financial services legislation to be automatically fixed with the costs and expenses of the Central Bank in pursuing the conviction, unless it appears to the court that there are special and substantial reasons for not doing so.