One of the consequences of the financial crisis is the increased focus by the Central Bank of Ireland (the Central Bank) on the regulation of, and enforcement action against, financial services providers. Financial regulatory reform is also a requirement of the EU-IMF programme of support for Ireland.
The Central Bank (Reform) Act 2010 was the first step in this process and it introduced, amongst other things, a more stringent fitness and probity regime for senior personnel in banks and financial service providers as discussed above. The Central Bank (Supervision and Enforcement) Bill 2011 (the Bill) is the next step in this process. The Bill provides a platform to the Central Bank for the enforcement of existing financial services legislation against all regulated financial service providers together with the power to introduce additional financial services legislation.
Some of the key aspects of the Bill are as follows:
- Enhanced powers to require financial service providers (or related undertakings) to commission reports from independent experts in relation to financial services matters being investigated by the Central Bank.
- Further provisions for the enforcement of financial services legislation - the Central Bank will have the power to make regulations on a wide range of issues. It is envisaged that this power will be used to give legislative effect to many of the Central Bank's existing Codes e.g. consumer protection.
- Protection of persons reporting breaches of financial services legislation - a whistleblower will be protected from civil liability and penalisation by their employer for making a protected disclosure.
- Mandatory disclosure regime - persons performing pre-approved control functions must report a breach of financial services legislation unless that might incriminate them personally. Failure to disclose may result in an investigation and action under the fitness and probity regime discussed above.
The Bill is currently progressing through the Oireachtas.