The Central Bank of Ireland has published its enforcement priorities and programme of themed reviews and inspections for 2014.
Enforcement Priorities
The Central Bank will pursue enforcement action in the areas of greatest concern to its Supervisory Divisions. For the first time, the Central Bank has published its priorities by industry sector, which are as follows:
- Banking and insurance
- Markets
- Credit unions
- Consumer protection
- All sectors
The Enforcement Priorities continue to focus on certain areas across almost all industry sectors, most notably, prudential requirements and systems and controls. A number of additional Enforcement Priorities are identified including MiFID conduct of business rules and fitness and probity obligations under the Central Bank Reform Act 2010.
The Central Bank notes that enforcement actions do not solely relate to the Enforcement Priorities and resources have been allocated to allow it to react to serious issues identified through day-to-day supervisory work and from other information sources, e.g. whistleblowing.
Reviews and Inspections
The Reviews and Inspections allow the Central Bank to monitor compliance and help to raise industry standards by identifying and highlighting both good and poor practices.
The Reviews and Inspections continue to focus on data integrity, client assets, outsourcing of fund activities and anti-money laundering.
In addition to the Reviews and Inspections, the Central Bank will continue to conduct additional inspections on key issues as they arise.
In the context of Enforcement Priorities, compliance with the Central Bank’s Fitness and Probity Regime is included as is also AML/CTF compliance.
The Central Bank’s press release has indicated that resources have been “specifically allocated to enforcement actions for firms with a low impact PRISM rating. Smaller firms will have lesser engagement with the Central Bank. For that reason, where breaches by small firms are discovered, we will use enforcement as a reminder that the regulatory rule book is mandatory, and non-compliance is regarded as serious.”
The Enforcement Priorities and Reviews and Inspections highlight the importance of enforcement within the Central Bank’s risk-based regulatory framework and are in line with the Central Bank’s objective of ensuring the proper and effective regulation of financial service providers and the markets within which they operate.
Contributed by Elena Canavan.
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