The Central Bank (Supervision and Enforcement) Act 2013 was signed into law by the President on 11 July 2013. The Act is an important step forward in enhancing the Central Bank’s supervisory powers over financial service providers (FSPs) and its power to enforce financial services legislation. The adoption of the Act is a welcome development given that it was first proposed as a Bill back in July 2011.
Key features of the Act include:
- Whistle-blowers may be offered protection from liability where they make protected disclosures.
- The Central Bank may draft regulations and issue directions on a broad range of business areas, including consumer protection.
- Central Bank authorised officers have enhanced powers to access premises and records, seek regulatory information and attend FSP meetings.
- The Financial Services Ombudsman may name FSPs that are the subject of a complaint.
- The Central Bank may, at the FSPs own cost, require an auditor to provide written reports on compliance by an FSP on certain regulatory matters.
- Enforcement provisions have been expanded upon to include restitution orders, recoupment of investigation costs from those FSPs found guilty of an offence, as well as suspensions and revocations.
- The maximum penalties under the administrative sanctions regime have been increased from €5m to €10m (or 10% or turnover) for firms and from €0.5m to €1m for individuals or natural persons.
- The Central Bank may direct the FSP to make appropriate redress to customers for problems that are widespread or regular, such as overcharging or systems failures.
- The Act provides for a new regulatory regime for debt management and advice.
The main change since the Act was first published as a Bill in July 2011 is the inclusion of a new provision to allow credit institutions or banks with a head office outside the EEA, to apply to set up a branch in Ireland.
The Act is a welcome step forward in financial regulation in Ireland; however only time will tell how the protections afforded to those assisting the Central Bank will be achieved in practice and whether the penalties will follow the offenders.