Central Bank and Financial Services Authority of Ireland Act 2004

New Part IIIC inserted into Central Bank Act 1942.

10.—(1) The Central Bank Act 1942 is amended by inserting the following Part after Part IIIB (as inserted by section 26 of the Central Bank and Financial Services Authority of Ireland Act 2003 ):

“PART IIIC

Enforcement of Designated Enactments and Designated Statutory Instruments

CHAPTER 1

Interpretation

Interpretation (Part IIIC).

33AN.—In this Part—

‘contravene’ includes fail to comply, and also includes—

(a) attempting to contravene, and

(b) aiding and abetting and counselling and procuring a person to commit a contravention, and

(c) inducing, or attempting to induce, a person (whether by threats or promises or otherwise) to commit a contravention, and

(d) being (directly or indirectly) knowingly concerned in, or a party to, a contravention, and

(e) conspiring with others to commit a contravention;

‘decision of the Regulatory Authority’ means—

(a) in relation to an inquiry held by the Regulatory Authority under section 33AO, a finding made by that Authority in accordance with section 33AQ and any decision of that Authority imposing a sanction under that section in consequence of the finding, or

(b) any decision of that Authority imposing a sanction under section 33AR;

‘disqualification direction’ means a direction given under section 33AQ or 33AR disqualifying a specified person from being concerned in the management of a regulated financial service provider;

‘inquiry’ means an inquiry held under section 33AO or section 33AR;

‘prescribed contravention’ means a contravention of—

(a) a provision of a designated enactment or designated statutory instrument, or

(b) a code made, or a direction given, under such a provision, or

(c) any condition or requirement imposed under a provision of a designated enactment, designated statutory instrument, code or direction, or

(d) any obligation imposed on any person by this Part or imposed by the Regulatory Authority pursuant to a power exercised under this Part;

‘notify’ means notify in writing.

CHAPTER 2

Power of Regulatory Authority to hold inquiries

Regulatory Authority may hold inquiry into conduct of regulated financial service provider or person concerned in its management.

33AO.—(1) Whenever the Regulatory Authority suspects on reasonable grounds that a regulated financial service provider is committing or has committed a prescribed contravention, it may hold an inquiry to determine whether or not the financial service provider is committing or has committed the contravention.

(2) Whenever the Regulatory Authority suspects on reasonable grounds that a person concerned in the management of a regulated financial service provider is participating or has participated in the commission of a prescribed contravention by the financial service provider, it may hold an inquiry to determine whether or not the person is participating or has participated in the contravention. Such an inquiry may form part of an inquiry held under this section in relation to the suspected commission of a prescribed contravention by the financial service provider.

Regulatory Authority to give notice to regulated financial service provider with respect to inquiry.

33AP.—(1) Before holding an inquiry under section 33AO, the Regulatory Authority shall give notice in writing of the proposed inquiry to the financial service provider or other person concerned.

(2) The notice must—

(a) specify the grounds on which the Regulatory Authority's suspicions are based, and

(b) specify a date, time and place at which the Regulatory Authority will hold the inquiry, and

(c) invite the financial service provider or person concerned either to attend the inquiry or to make written submissions about the matter to which the inquiry relates.

(3) A regulated financial service provider or other person concerned may, before the date of the inquiry, lodge with the Regulatory Authority any written submissions that the regulated financial service provider or person wishes that Authority to take into account when considering the matter to which the inquiry relates. This subsection applies whether or not the financial service provider or other person has been invited to attend the inquiry.

(4) The Regulatory Authority may adjourn an inquiry from time to time and from place to place, but if it does so it shall ensure that the regulated financial service provider or other person concerned is notified of the date, time and place at which the inquiry is to be resumed.

(5) The Regulatory Authority may proceed with an inquiry in the absence of the financial service provider or other person concerned so long as that financial service provider or person has been given an opportunity to attend the inquiry or to make written submissions to it.

What decisions Regulatory Authority can make at conclusion of inquiry held under section 33AO.

33AQ.—(1) At the conclusion of an inquiry held under section 33AO, the Regulatory Authority shall make a finding as to whether the financial service provider concerned is committing or has committed the prescribed contravention to which the inquiry relates.

(2) At the conclusion of an inquiry relating to the conduct of a person concerned in the management of a regulated financial service provider, the Regulatory Authority shall make a finding as to whether the person is participating or has participated in the prescribed contravention to which the inquiry relates.

(3) If the Regulatory Authority makes a finding that a regulated financial service provider is committing or has committed a prescribed contravention, it may impose on the financial service provider one or more of the following sanctions:

(a) a caution or reprimand;

(b) a direction to refund or withhold all or part of an amount of money charged or paid, or to be charged or paid, for the provision of a financial service by the financial service provider;

(c) a direction to pay to the Regulatory Authority a monetary penalty not exceeding the prescribed amount;

(d) if the financial service provider is a natural person, a direction disqualifying the person from being concerned in the management of a regulated financial service provider for such period as is specified in the order;

(e) if the financial service provider is found to be still committing the contravention, a direction ordering the financial service provider to cease committing the contravention;

(f) a direction to pay to the Regulatory Authority all or a specified part of the costs incurred by that Authority in holding the inquiry and in investigating the matter to which the inquiry relates.

(4) For the purpose of subsection (3)(c), the prescribed amount is—

(a) if the financial service provider is a body corporate or an unincorporated body, €5,000,000, or

(b) if the financial service provider is a natural person, €500,000, or

(c) if the regulations prescribe some other amount for paragraph (a) or (b), that other amount.

(5) If the Regulatory Authority makes a finding that a person concerned in the management of a regulated financial service provider is participating or has participated in the commission by the financial service provider of a prescribed contravention, it may impose on the person one or more of the following sanctions:

(a) a caution or reprimand;

(b) a direction to pay to the Regulatory Authority a monetary penalty not exceeding the prescribed amount;

(c) a direction disqualifying the person from being concerned in the management of a regulated financial service provider for such period as is specified in the order;

(d) if the person is found to be still participating in the commission of the contravention, a direction ordering the person to cease participating in the commission of the contravention;

(e) a direction to pay to the Regulatory Authority all or a specified part of the costs incurred by that Authority in holding the inquiry and in investigating the matter to which the inquiry relates.

(6) For the purpose of subsection (5)(b), the prescribed amount is—

(a) €500,000, or

(b) if the regulations prescribe some other amount of money for paragraph (a), that other amount.

(7) At the conclusion of an inquiry relating to the conduct of a regulated financial service provider, the Regulatory Authority shall notify its decision to the financial service provider. The decision must set out in writing—

(a) its finding as to whether or not the financial service provider is committing or has committed the prescribed contravention to which the inquiry relates, and

(b) the grounds on which its finding is based, and

(c) if the Regulatory Authority finds that the contravention is being or has been committed, the sanctions (if any) imposed under this section in respect of the contravention.

(8) At the conclusion of an inquiry relating to the conduct of a person concerned in the management of a regulated financial service provider, the Regulatory Authority shall notify the person of its decision. The decision must set out—

(a) its finding as to whether or not the person is participating or has participated in the commission of the prescribed contravention to which the inquiry relates, and

(b) the grounds on which the finding is based, and

(c) if the Regulatory Authority finds that the person is participating or has participated in the contravention, the sanctions (if any) imposed under this section in respect of the participation.

Alternative procedure when commission of, or participation in, prescribed contravention is acknowledged.

33AR.—(1) If, in a case where the Regulatory Authority suspects on reasonable grounds that a regulated financial service provider is committing or has committed a prescribed contravention, the financial service provider acknowledges that the financial service provider is committing or has committed the contravention, the Regulatory Authority may—

(a) with the consent of the financial service provider, dispense with an inquiry and impose on the financial service provider any sanction that it is empowered to impose on regulated financial service providers under section 33AQ, or

(b) hold an inquiry to determine what sanction (if any) should be imposed on the financial service provider in accordance with that section.

(2) If, in a case where the Regulatory Authority suspects on reasonable grounds that a person concerned in the management of a regulated financial service provider is committing or has committed a prescribed contravention, the person acknowledges that the person is participating or has participated in the commission of the contravention, the Regulatory Authority may—

(a) with the person's consent, dispense with an inquiry and impose on that person any sanction that it is empowered to impose on persons concerned in the management of regulated financial service providers under section 33AQ, or

(b) hold an inquiry to determine what sanction (if any) should be imposed on the person in accordance with that section.

(3) At the conclusion of an inquiry under subsection (1)(b), the Regulatory Authority shall notify its decision to the financial service provider concerned. The decision must set out in writing the sanctions (if any) imposed under that subsection in respect of the relevant contravention.

(4) At the conclusion of an inquiry held under paragraph (b) of subsection (2), the Regulatory Authority shall notify the person concerned of its decision. The decision must set out the sanctions (if any) imposed under that paragraph in respect of the participation.

Limitations on imposing monetary penalties.

33AS.—(1) If the Regulatory Authority decides to impose a monetary penalty on a regulated financial service provider under section 33AQ or 33AR, it may not impose an amount that would be likely to cause the financial service provider to cease business.

(2) If the Regulatory Authority decides to impose a monetary penalty on a person under section 33AQ or 33AR, it may not impose an amount that would be likely to cause the person to be adjudicated bankrupt.

(3) If conduct engaged in—

(a) by a regulated financial service provider constitutes two or more prescribed contraventions, or

(b) by a person concerned in the management of such a financial service provider constitutes participation in two or more prescribed contraventions by such a financial service provider,

an inquiry may be held under section 33AO or 33AR in relation to one or more of the contraventions, but only one monetary penalty may be imposed under section 33AQ or 33AR in respect of the same conduct.

Financial service provider etc. not to be liable to be penalised twice for same contravention.

33AT.—(1) If the Regulatory Authority imposes a monetary penalty in accordance with section 33AQ or 33AR and the prescribed contravention in respect of which the sanction is imposed is an offence under a law of the State, the financial service provider or other person concerned is not liable to be prosecuted or punished for the offence under that law.

(2) The Regulatory Authority may not impose a monetary penalty on a financial service provider, or on a person concerned in the management of the financial service provider, in accordance with section 33AQ or 33AR, if—

(a) the financial service provider or other person has been charged with having committed an offence under a law of the State and has either been found guilty or not guilty of having committed the offence, and

(b) the offence involves a prescribed contravention.

Person not to be concerned in management of regulated financial service provider while disqualified.

33AU.—A regulated financial service provider shall ensure that a person is not permitted to be concerned in the management of the financial service provider while the person is subject to a disqualification direction that is in force under this Part.

Power of Regulatory Authority to resolve suspected contraventions, etc.

33AV.—(1) If the Regulatory Authority suspects on reasonable grounds that—

(a) a regulated financial service provider is committing or has committed a prescribed contravention, or

(b) a person concerned in the management of the financial service provider is participating or has participated in such a contravention,

it may enter into an agreement in writing with the financial service provider or person to resolve the matter.

(2) Such an agreement is to be on such terms as are specified in the agreement and is binding on the Regulatory Authority and the financial service provider or person concerned. Those terms may include terms under which that financial service provider or person accepts the imposition of sanctions of the kind referred to in section 33AQ.

(3) The Regulatory Authority may enter into an agreement under this section—

(a) without having held an inquiry into the matter under section 33AO or 33AR, or

(b) after beginning (but not after completing) such an inquiry.

(4) The Regulatory Authority may, by proceedings brought in a court of competent jurisdiction, recover as a debt due to the Bank the amount of any amount agreed to be paid under an agreement entered into under this section.

When decisions of the Regulatory Authority under this Part take effect.

33AW.—(1) A decision of the Regulatory Authority imposing a caution or reprimand takes effect—

(a) if no appeal against the decision is lodged with the Appeals Tribunal within the period allowed for lodging such an appeal—at the end of that period, or

(b) if such an appeal is lodged with the Appeals Tribunal within that period and the decision is confirmed by that Tribunal (with or without variation) — at the time when the period allowed for lodging an appeal with the High Court against that decision has ended, no appeal having been lodged within that period, or

(c) if such an appeal is lodged with the Appeals Tribunal within that period but is later withdrawn — at the time of the withdrawal of the appeal, or

(d) if an appeal is made to the High Court against the determination of the Appeals Tribunal in respect of the decision and, on the hearing of the appeal by that Court, that determination is confirmed (with or without variation) — at the time of confirmation of that determination, or

(e) if an appeal is made to the High Court against the determination of the Appeals Tribunal but is later withdrawn — at the time of the withdrawal of the appeal.

(2) A decision of the Regulatory Authority directing payment of a monetary penalty, a refund of money or costs takes effect—

(a) if—

(i) the amount of the penalty, refund or costs is not paid to the Regulatory Authority within the period allowed for appeals against such a decision, and

(ii) no appeal to the Appeals Tribunal is lodged within that period or, having been lodged within that period, is later withdrawn,

at the time when the decision is confirmed by an order of a court of competent jurisdiction,

or

(b) if such an appeal is lodged with the Appeals Tribunal within that period and the decision is confirmed by that Tribunal (with or without variation) — at the time when the period allowed for lodging an appeal with the High Court against the determination of that Tribunal in respect of the decision has ended, no appeal having been lodged within that period, or

(c) if such an appeal is lodged with the Appeals Tribunal within that period but is later withdrawn — at the time of the withdrawal of the appeal, or

(d) if an appeal is made to the High Court against the determination of the Appeals Tribunal in respect of the decision and, on the hearing of the appeal by that Court, that determination is confirmed (either with or without variation) — at the time of confirmation of that determination, or

(e) if an appeal is made to the High Court against the decision of that Tribunal but is later withdrawn — at the time when the appeal is withdrawn.

(3) A disqualification direction takes effect—

(a) if no appeal to the Appeals Tribunal is lodged within the period allowed for bringing such an appeal, or is lodged within that period but is later withdrawn — at the time when it is confirmed by an order of a District Court, or

(b) if such an appeal is lodged with the Appeals Tribunal within that period and the direction is confirmed by that Tribunal — at the time when the period allowed for lodging an appeal in the High Court against the determination of that Tribunal in respect of the direction has ended, no appeal having been lodged within that period, or

(c) if such an appeal is lodged within that period but is later withdrawn — at the time when the appeal is withdrawn, or

(d) if an appeal is made to the High Court against the determination of the Appeals Tribunal in respect of the direction and, on the hearing of the appeal by that Court, that determination is confirmed (with or without variation) — at the time of confirmation of that determination, or

(e) if an appeal is made to the High Court against the determination of the Appeals Tribunal but is later withdrawn, at the time when the appeal is withdrawn.

(4) Any other decision of the Regulatory Authority under this Part takes effect—

(a) if no appeal against the decision is lodged with the Appeals Tribunal within the period allowed for lodging such an appeal, at the end of that period, or

(b) if such an appeal is lodged with the Appeals Tribunal within that period and the decision is confirmed by that Tribunal (with or without variation) — at the time when the period allowed for lodging an appeal with the High Court against the determination of that Tribunal in respect of the decision has ended, no appeal having been lodged within that period, or

(c) if such an appeal is lodged with the Appeals Tribunal within that period but is later withdrawn — at the time of the withdrawal of the appeal, or

(d) if an appeal is made to the High Court against the determination of the Appeals Tribunal in respect of the decision and, on the hearing of the appeal by that Court, that determination is confirmed (with or without variation) — at the time of confirmation of that determination, or

(e) if an appeal is made to the High Court against the determination of the Appeals Tribunal in respect of the decision but is later withdrawn — at the time of the withdrawal of the appeal.

(5) A court of competent jurisdiction may hear an application by the Regulatory Authority under this section otherwise than in public if—

(a) evidence may be given, or a matter may arise, during the hearing that is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the State, or

(b) a person's reputation would be unfairly prejudiced unless the court exercises its discretion under this section.

Decision of Regulatory Authority to be appealable.

33AX.—A decision of the Regulatory Authority made at the conclusion of an inquiry held under section 33AO or section 33AR is an appealable decision for the purposes of Part VIIA.

CHAPTER 3

Conduct of inquiries

Proceedings at inquiries.

33AY.—(1) The Regulatory Authority shall conduct an inquiry with as little formality and technicality, and with as much expedition, as a proper consideration of the matters before it will allow.

(2) At an inquiry, the Regulatory Authority shall observe the rules of procedural fairness, but is not bound by the rules of evidence.

(3) The Regulatory Authority may be assisted by a legal practitioner when conducting an inquiry.

(4) A financial service provider or other person who has, in accordance with section 33AP, been invited to attend an inquiry or a part of it is entitled to be represented at the inquiry or part by a legal practitioner or, with the leave of the Regulatory Authority, by any other person.

Inquiry normally to be held in public.

33AZ.—(1) Except as provided by subsection (2), the Regulatory Authority shall hold its inquiries in public.

(2) The Regulatory Authority and the financial service provider or other person to whom an inquiry relates may agree that the inquiry should be held in private, but even if they do not agree, that Authority may nevertheless decide to hold an inquiry in private if it is satisfied that—

(a) evidence may be given, or a matter may arise, during the inquiry that is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence against a law of the State, or

(b) a person's reputation would be unfairly prejudiced unless that Authority exercises its powers under this section.

(3) The Regulatory Authority may at any time vary or revoke a decision made under subsection (2).

Power to summon witnesses and take evidence.

33BA.—(1) At an inquiry, the Regulatory Authority may, in writing—

(a) summons a person to appear before the inquiry to give evidence, to produce specified documents, or to do both, and

(b) require the person to attend from day to day unless excused, or released from further attendance, by that Authority.

(2) The person presiding at an inquiry may require evidence to be given on oath, and may for that purpose—

(a) require a witness at the inquiry to take an oath, and

(b) administer an oath to the witness.

(3) The oath to be taken by a person for the purposes of this section is an oath that the evidence the person will give will be true.

(4) The person presiding at an inquiry—

(a) may require a witness at the inquiry to answer a question put to the witness, and

(b) may require a person appearing at the inquiry in accordance with a summons issued under this section to produce a document specified in the summons.

(5) The person presiding at an inquiry may allow a witness at the inquiry to give evidence by tendering a written statement, which, if the person presiding so requires, must be verified by oath.

Regulatory Authority may refer to Court question of law arising at inquiry.

33BB.—(1) The Regulatory Authority may, on its own initiative or at the request of the financial service provider or other person concerned, refer to the Court for decision a question of law arising at an inquiry.

(2) If a question has been referred under subsection (1), the Regulatory Authority may not, in relation to a matter to which the inquiry relates—

(a) give a decision to which the question is relevant while the reference is pending, or

(b) proceed in a manner, or make a decision, that is inconsistent with the Court's opinion on the question.

(3) If a question is referred under subsection (1)—

(a) the Regulatory Authority shall send to the Court all documents before that Authority that are relevant to the matter in question, and

(b) at the end of the proceeding in the Court in relation to the reference, the Court shall cause the documents to be returned to that Authority.

Regulatory Authority may publish its decisions.

33BC.—(1) If on the holding of an inquiry under section 33AO the Regulatory Authority has found that—

(a) a regulated financial service provider is committing or has committed a prescribed contravention, or

(b) a person concerned in the management of the financial service provider is participating or has participated in such a contravention,

it shall publish the finding, and details of any sanction imposed in consequence of the finding, in such form and manner as it thinks appropriate.

(2) If the Regulatory Authority has, in accordance with section 33AR, imposed—

(a) a sanction on a regulated financial service provider in respect of the commission of a prescribed contravention, or

(b) a sanction on a person concerned in the management of a financial service provider in respect of the person's participation in the commission by the financial service provider of such a contravention,

it shall publish details of the sanction imposed, in such form and manner as it thinks appropriate.

(3) Subsections (1) and (2) do not apply to findings or details that the Regulatory Authority determines—

(a) to be of a confidential nature or to relate to the commission of an offence against a law of the State, or

(b) would unfairly prejudice a person's reputation.

(4) The Regulatory Authority shall publish annually, in a summary form, information on its actions under this Part.

Regulatory Authority may make guidelines with respect to the conduct of proceedings under this Part.

33BD.—(1) The Regulatory Authority may prescribe guidelines with respect to the conduct of inquiries under this Part, and may for that purpose, incorporate by reference any procedure prescribed by Rules of the Superior Courts as in force at a specified time or as in force from time to time.

(2) The Regulatory Authority may at any time amend or revoke guidelines prescribed under this section.

(3) Guidelines prescribed under this section, and any amendment to, or revocation of, those guidelines, must be in writing and be published in a manner determined by the Regulatory Authority.

Performance and exercise of functions and powers of Regulatory Authority under this Part.

33BE.—The Chief Executive, and such other officers of the Regulatory Authority and such employees of the Bank as the Regulatory Authority designates from time to time, are responsible for performing and exercising the functions and powers of the Regulatory Authority under this Part.

Limitation of period within which judicial review may be sought.

33BF.—An application for leave to apply for judicial review of a decision of the Regulatory Authority under this Part must be made—

(a) within 2 months after the date on which notice of the decision was first notified to the financial service provider or the person concerned, or

(b) if the High Court makes an order extending that period, within that extended period.”.

(2) The Acts specified in Schedule 1 are consequentially amended as indicated in that Schedule.

(3) The statutory instruments specified in Schedule 2 are consequentially amended as indicated in that Schedule.