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Central Bank Enforcement Activity

The Central Bank has issued a number of public statements in March 2012 arising from settlement agreements reached between it and regulated entities which are found to have committed prescribed contraventions. Looking at the number of settlement agreements published by the Central Bank in the period 2009-2011, there already appears to be a marked increase in enforcement activity.  So far in 2012 (and in the month of March alone) there have been five settlement agreements compared to the annual average of nine per year in the 2009-2011 period. 

Where a prescribed contravention has occurred the Central Bank has the power to administer sanctions. Prescribed contraventions include a breach of:

  • Certain designated Acts or statutory instruments governing regulated entities
  • Codes or directions
  • Any conditions or requirements imposed in line with designated Acts or statutory instruments, codes or directions
  • Any obligations imposed by the Bank

Where the Central Bank suspects that a breach has occurred, it first conducts an examination of the alleged breach to determine how serious it may be. It then makes a decision as to how to address the breach. Measures taken in this regard can vary from a supervisory action or warning to a full inquiry and/or a referral of the matter for criminal prosecution. Where the matter proceeds to a full inquiry, there are a number of measures available to the Central Bank to bring the inquiry to a conclusion, the one most frequently invoked being entry into a settlement agreement.

Settlement Agreements
A settlement agreement is entirely voluntary and can be entered into at any stage up to the conclusion of an inquiry. The Central Bank will not ordinarily consider entering into a settlement agreement until such time as it has been assured that all prescribed contraventions the subject of the investigation have either been remedied or are being remedied to its satisfaction.

As part of any settlement reached with the Central Bank, a formal settlement agreement will be drawn up. While the agreement is a confidential document, it is retained with the compliance record of the relevant regulated entity. The Central Bank also issues a public report of the settlement agreement as a means of publicising the extent of sanctions imposed and the types of prescribed contraventions sanctioned.

Contributed by Hilary Rogers.

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