The Central Bank (Supervision and Enforcement) Act 2013 strengthens the regulatory powers of the Central Bank (CBI) significantly. The Act applies to regulated financial services providers (RFSPs) and in certain cases to related undertakings. Almost all provisions came into force on 1 August 2013.

The CBI may require persons to provide specified information, records or documents and to certify their correctness. It may require an entity to provide at its own cost a report on a specified matter prepared by a third party expert approved by the CBI. The CBI may appoint authorised officers with extensive powers including to search and inspect premises, to require information or records, to explain practices and to answer questions. A court procedure for adjudicating claims of legal privilege is included.

The CBI may require a RFSP’s auditor to report to the CBI on the RFSP’s compliance with specified obligations. The Act also provides protection from disciplinary and civil action for whistleblowers disclosing breaches of financial services legislation to the CBI on reasonable grounds and in good faith. For persons performing pre-approval controlled functions such disclosure is, as a rule, mandatory – not merely protected.

The Act provides the CBI with broad powers to issue directions in relation to conduct of business and to make regulations.

The CBI may direct a RFSP to make redress to customers for losses arising from widespread or regular specified defaults including overcharging, misselling or system failure.

The CBI may apply to the High Court for an order restraining conduct breaching financial services legislation or an order for restitution against a person unjustly enriched by a breach. The Act increases administrative sanctions maximum penalties to the greater of €10,000,000 or 10% of turnover for the last financial year for companies and to €1,000,000 for individuals.

Contributed by Shane Kelleher.

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