On 22 July 2026, the Central Bank of Ireland (Central Bank) announced that it had commissioned an independent review of the effectiveness and efficiency of its enforcement activities.

The review will be led by Josephine Feehily, former Chair of the Revenue Commissioners and first Chair of the Policing Authority. Terms of reference (ToR) were published alongside the announcement. Ms Feehily is to provide a report, including recommendations, to Governor Gabriel Makhlouf by 31 January 2027, and the Central Bank has confirmed that the report will be published in due course.

Background to the Review

The Central Bank frames the review as a response to structural change. The ToR record that the financial system has become larger, more complex and more interconnected over the last decade, and that regulated firms and individuals are now subject to more robust requirements on governance, conduct, operational resilience, consumer protection and accountability. The Central Bank’s own enforcement framework has moved in parallel, through amendment of its legislative basis, procedural reform and the evolution of the related case law.

The announcement follows a period of judicial and tribunal criticism of the Central Bank’s individual-facing processes. In Central Bank of Ireland v CD [2026] IEHC 203, delivered on 31 March 2026, the High Court refused to confirm a prohibition notice issued to a senior individual in a fund management company, finding that the investigation and decision-making process had been irretrievably tainted by a failure to afford fair procedures. As the Central Bank must apply to the High Court under section 45(1) of the Central Bank Reform Act 2010 for confirmation of a prohibition notice, that refusal set the notice aside, and the High Court declined to remit the matter for reconsideration.

Appearing before the Oireachtas Finance Committee on 15 July 2026, Central Bank Governor Gabriel Makhlouf said that the Central Bank took the judgment very seriously and will implement its findings, and indicated that he expects the reviewer to consider the judgment as part of her work. The judgment itself followed earlier criticism of the Central Bank’s decision-making by the Irish Financial Services Appeals Tribunal, which prompted the 2024 review of the fitness and probity gatekeeping process carried out by Andrea Enria, the former Chair of the ECB’s Supervisory Board.

The review also arrives at a comparatively early stage in the operation of the reformed Administrative Sanctions Procedure. The Central Bank (Individual Accountability Framework) Act 2023 recast Part IIIC of the Central Bank Act 1942, including by requiring that a Central Bank decision imposing sanctions be confirmed by the High Court before it takes effect. Much of the practical experience of that framework has therefore accumulated only recently.

What the review will examine

The ToR set five tasks for the reviewer.

1. First is to evaluate the effectiveness of enforcement performance by reference to the outcomes the Central Bank seeks to achieve and the role of enforcement within the supervisory framework. This strand expressly extends to the Central Bank’s structures and processes for carrying out enforcement activity and taking decisions, the arrangements between the enforcement function and supervisors, the arrangements between the Legal Division, including the Regulatory Decisions Unit, and the Enforcement Directorate, and the arrangements for engaging external legal advice.
2. Second is to evaluate the criteria and processes applied in deciding whether a case should be selected for enforcement action and continued as such.
3. Third is to evaluate the efficiency and timeliness of enforcement activity, having regard to legal processes, organisational priorities across the Central Bank and available resources.
4. Fourth is to consider the transparency of enforcement activity for the public, for the firms involved and for individuals who may be affected.
5. Fifth is to make any suggestions the reviewer considers would improve the effectiveness of the Central Bank’s enforcement activities.

In carrying out those tasks, the reviewer is to have regard to the overall efficiency and effectiveness of enforcement activities, best practice among regulators performing similar functions domestically and internationally, and applicable international standards and principles.

The ToR also state that the review is to be conducted within the framework of the relevant provisions of Irish financial services legislation, which suggests that the exercise is directed at how the existing statutory architecture operates in practice.

How the review will be conducted

The ToR provide that Ms Feehily will have a dedicated team and will be able to seek further legal advice, including external advice, if required. The Central Bank will supply a background document setting out its processes, responsibilities and recent changes to its approach to regulation and supervision, together with the specific enforcement regimes within scope.

The reviewer will conduct interviews and assessments with senior management across the Central Bank and with other staff involved in enforcement processes and decisions. Members of the Regulatory Decisions Panel may also be asked for their views, although the ToR carve out the specifics of individual ongoing cases. External stakeholders will be engaged as the reviewer deems necessary.

What this means for firms and individuals

The review is an examination of the regulator rather than of regulated firms or individual working in regulated firms, and it does not alter any obligation to which a regulated firm or an individual performing a controlled function in a regulated firm is currently subject. Its significance lies in what may follow from it.

Firms and individuals currently engaged with the Central Bank on enforcement or fitness and probity matters should expect the existing framework to continue to apply while the review is underway. The areas under examination, particularly case selection, timeliness and the separation between investigation and decision-making, are among those most frequently raised by respondents in enforcement proceedings and procedural change during 2027 is a realistic prospect.

The transparency strand is the one most likely to generate visible output for the market. The Central Bank has already signalled that it will publish further guidance on its approach to prohibition decisions, and any recommendations on transparency would sit alongside that guidance.

The examination of the arrangements between the supervisory and enforcement functions also merits attention. Any recalibration of that interface could affect how supervisory engagement, including inspections and risk mitigation programmes, is escalated in practice. The position will not be clear until the report is published and firms should treat this as a matter to monitor rather than one calling for immediate action.

Next steps

The report is due to be delivered to Governor Makhlouf by 31 January 2027 and will be published thereafter. Given the breadth of the ToR, the recommendations have the potential to shape Central Bank enforcement practice for some years. Firms with live enforcement or fitness and probity matters, and those advising individuals in controlled function roles, should follow the review’s progress closely.

Contact

For more information, please contact Shane Kelleher, Louise McNabola, any member of the Financial Regulation Unit or your usual William Fry contact.