Central Bank (Individual Accountability Framework) Act 2023

Chapter 3

Duty of responsibility and standards for individuals

Insertion of Part 3A in Act of 2010

6. The Act of 2010 is amended by the insertion of the following Part after Part 3:

“PART 3A

Duty of responsibility and conduct standards

Interpretation (Part 3A)

53A. For the purposes of this Part—

‘common conduct standards’ shall be construed in accordance with section 53C(1);

‘additional conduct standards’ shall be construed in accordance with section 53C(2).

Duty of responsibility

53B. (1) For the purposes of this section—

(a) a person has inherent responsibility for an aspect of the affairs of a regulated financial service provider if—

(i) the person performs a pre-approval controlled function in relation to the regulated financial service provider, and

(ii) the aspect of its affairs is specified in relation to that function by regulations made under section 48 (2)(ba) of the Central Bank (Supervision and Enforcement) Act 2013 ,

and

(b) a person has allocated responsibility for an aspect of the affairs of a regulated financial service provider if—

(i) the person performs a pre-approval controlled function in relation to the regulated financial service provider, and

(ii) responsibility for the aspect of its affairs has been allocated to the person performing that function under arrangements adopted by the regulated financial service provider in accordance with regulations made under section 48 (2)(bc) of the Central Bank (Supervision and Enforcement) Act 2013 .

(2) A person who has inherent or allocated responsibility for an aspect of the affairs of a regulated financial service provider shall take any steps that it is reasonable in the circumstances for the person to take to secure that, while the person has that responsibility, the aspect of the affairs of the regulated financial service provider is conducted so as to avoid contravention by it of its obligations under financial services legislation.

(3) For the purposes of subsection (2), avoiding contravention includes avoiding continuation of a contravention.

Duty to take steps to meet conduct standards

53C. (1) A person who performs a controlled function in relation to a regulated financial service provider shall take any steps that it is reasonable in the circumstances for the person to take to ensure that the standards set out in section 53E (referred to in this Part as the ‘common conduct standards’) are met.

(2) A person who performs a pre-approval controlled function in relation to a regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of the regulated financial service provider’s affairs shall take any steps that it is reasonable in the circumstances for the person to take to ensure that the standards set out in section 53F (referred to in this Part as the ‘additional conduct standards’) are met.

Relevant circumstances for purposes of sections 53B and 53C

53D. In determining the circumstances that are relevant for the purposes of subsection (2) of section 53B and subsections (1) and (2) of section 53C, as they apply in the case of any person performing functions in relation to a regulated financial service provider, matters to be considered include—

(a) the nature of the business of the regulated financial service provider, including its scale and complexity,

(b) the functions of the person in relation to the regulated financial service provider, and the level of knowledge and experience that a person with such functions could reasonably be expected to have,

(c) the level of knowledge and experience of the person,

(d) the existence and application (or otherwise) of—

(i) appropriate and effective systems (including risk management systems, internal control mechanisms and governance arrangements),

(ii) effective oversight of any delegation of responsibilities and effective safeguards against any inappropriate delegation, and

(iii) appropriate and effective procedures for identifying and remedying problems,

(e) the extent to which any matter referred to in paragraph (d) was within the control or influence of the person, and

(f) in the case of subsections (1) and (2) of section 53C, any guidelines published by the Bank under section 53G.

Common conduct standards

53E. (1) The standards referred to in section 53C(1), in the case of a person who performs a controlled function in relation to a regulated financial service provider, are—

(a) that the person acts with honesty and integrity, including—

(i) having regard to the legitimate interests of the regulated financial service provider, its staff, customers and other persons with whom it engages,

(ii) operating without bias and preventing, or identifying and appropriately managing, conflicts of interest,

(iii) not exerting pressure or influence on a customer so as to limit his or her ability to make an informed choice in relation to any financial service,

(iv) not misusing or misappropriating any assets or information of the regulated financial service provider or its customers, and

(v) reporting appropriately, and not impeding others from reporting, to the management of the regulated financial service provider—

(I) information relevant to, or giving rise to a suspicion of, the commission of a prescribed contravention or contravention of any other legal obligation or standard imposed on the regulated financial service provider, and

(II) any matter otherwise adversely affecting the activities or interests of customers, the regulated financial service provider, its related undertakings, or the financial system in the State,

(b) that the person acts with due skill, care and diligence, including—

(i) having appropriate knowledge of the business activities of the regulated financial service provider relevant to the controlled function, and the associated risks of those activities,

(ii) having appropriate knowledge of the legal and regulatory framework, including any legal obligation or standard imposed on the regulated financial service provider, relevant to the controlled function,

(iii) operating in compliance with the systems and controls, processes, policies and procedures of the regulated financial service provider and any legal obligation or standard imposed on the regulated financial service provider,

(iv) acting without detriment to customers, the regulated financial service provider, its related undertakings, or the financial system in the State,

(v) ensuring that any communication, including any record, provided to a customer or other person is clear, accurate, up to date and not misleading,

(vi) acting appropriately in any decision-making, including collective decision-making, ensuring decisions are properly informed and exercising sound judgement, and

(vii) monitoring the performance of any delegated tasks and ensuring that those tasks are appropriately performed,

(c) that the person cooperates in good faith and without delay with the Bank, and with authorities that perform functions in a jurisdiction other than the State that are comparable to one or more of the functions performed by the Bank under financial services legislation, including—

(i) responding to requests and requirements under financial services legislation in an open and timely manner,

(ii) disclosing information or records when required to do so under financial services legislation,

(iii) attending meetings and interviews when required to do so under financial services legislation,

(iv) not providing false, inaccurate or misleading information, records or explanations,

(v) not destroying, hiding or putting beyond reach information or records that it is reasonable for the person to expect to be required to be disclosed under financial services legislation, and

(vi) not engaging in evasive, misleading or obstructive conduct,

(d) that the person acts in the best interests of customers and treats them fairly and professionally, including—

(i) ensuring that customers are informed in a clear manner of relevant information relating to financial services of which they ought to be aware, and not impeding the provision of relevant information to customers,

(ii) communicating with customers in a timely manner having regard to the urgency of any matter and the time required by the customer to consider the relevant information,

(iii) assessing the needs and circumstances of customers, including their level of knowledge and experience of financial services, their financial circumstances and the range of options available to them, and ensuring that any advice or recommendation provided to customers is appropriate and tailored to their needs and circumstances,

(iv) ensuring that customers are not misled as to the advantages of any financial service,

(v) acknowledging and seeking to resolve any complaints received from customers,

(vi) resolving errors or mistakes affecting customers, and disclosing errors or mistakes to the customers affected in a timely manner, and

(vii) not acting in a manner that is unfair to customers,

and

(e) that the person operates in compliance with standards of market conduct and trading venue rules to which the regulated financial service provider is subject by law and any market codes that apply to the affairs of the regulated financial service provider.

(2) Nothing referred to in a subparagraph of any paragraph of subsection (1), as included in that paragraph, limits the scope of that paragraph or any other paragraph of that subsection.

(3) In subsection (1), ‘related undertaking’ has the meaning given by section 3 (1) of the Central Bank (Supervision and Enforcement) Act 2013 .

Additional conduct standards

53F. The standards referred to in section 53C(2), in the case of a person who performs a pre-approval controlled function in relation to a regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of a regulated financial service provider’s affairs, are—

(a) that the business of the regulated financial service provider is controlled effectively,

(b) that the business of the regulated financial service provider is conducted in accordance with its obligations under financial services legislation,

(c) that any delegated tasks are assigned to an appropriate person with effective oversight, and

(d) that any information of which the Bank would reasonably expect notice in respect of the business of the regulated financial service provider is disclosed promptly and appropriately to the Bank, including information relevant to, or giving rise to a suspicion or expectation of, any of the following:

(i) commission of an offence by the regulated financial service provider or a person performing a controlled function in relation to it;

(ii) commission of a prescribed contravention or any other breach of obligations under financial services legislation by the regulated financial service provider or a person performing a controlled function in relation to it;

(iii) concealment or deliberate destruction of evidence relating to a matter referred to in subparagraph (i) or (ii);

(iv) provision of false or misleading information to the Bank relating to a matter referred to in subparagraph (i) or (ii);

(v) obstruction or impeding of an investigation relating to a matter referred to in subparagraph (i) or (ii);

(vi) commencement of legal proceedings by or against the regulated financial service provider arising from its obligations under financial services legislation;

(vii) commencement of legal proceedings against the regulated financial service provider which may impact on its ability to continue to trade;

(viii) anything that may otherwise interfere significantly with the operation of the regulated financial service provider or its compliance with its obligations under financial services legislation;

(ix) a decision by the regulated financial service provider to cease to provide financial services of a particular description.

Guidelines on conduct standards

53G. (1) The Bank shall prepare, in such form and manner as it considers appropriate, guidelines for the purpose of providing practical guidance for persons to whom subsection (1) or (2) of section 53C applies relating to the application and operation of this Part.

(2) The guidelines may include different provisions in respect of different classes of persons to whom subsection (1) or (2) of section 53C applies.

(3) The Bank shall publish guidelines prepared under subsection (1)—

(a) by notice in Iris Oifigiúil, and

(b) on a website maintained by or on behalf of the Bank.

(4) A person to whom subsection (1) or (2) of section 53C applies shall have regard to any guidelines published by the Bank under this section.

Notification and training for persons subject to conduct standards

53H. (1) A regulated financial service provider shall for the purpose of ensuring compliance with the common conduct standards and additional conduct standards—

(a) notify persons performing a controlled function in relation to the regulated financial service provider of the common conduct standards and how they apply to a person performing that function,

(b) provide training to persons performing a controlled function in relation to the regulated financial service provider to ensure that such persons have appropriate knowledge of the common conduct standards and how they apply to a person performing that function,

(c) notify persons performing a pre-approval controlled function in relation to the regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of the regulated financial service provider’s affairs of the additional conduct standards and how they apply to a person performing that function,

(d) provide training to persons performing a pre-approval controlled function in relation to the regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of the regulated financial service provider’s affairs to ensure that such persons have appropriate knowledge of the additional conduct standards and how they apply to a person performing that function, and

(e) establish, maintain and give effect to policies on how the common conduct standards are integrated into the conduct of the affairs of the regulated financial service provider.

(2) The Bank shall prepare, in such form and manner as it considers appropriate, guidelines for the purpose of providing practical guidance for regulated financial service providers relating to each of the matters referred to in subsection (1).

(3) The Bank shall publish guidelines prepared under subsection (2)—

(a) by notice in Iris Oifigiúil, and

(b) on a website maintained by or on behalf of the Bank.

Limitation of requirements to produce documents, give information or answer questions

53I. Nothing in this Part requires a person—

(a) to produce a document that the person could not have been compelled to produce to a court,

(b) to give information that the person could not have been compelled to give to a court,

(c) to answer a question that the person could not have been compelled to answer in a court, or

(d) to do anything that might tend to incriminate the person.”.