On 1 October 2010, the Irish Financial Services Regulatory Authority was dissolved and most of its existing functions merged into the new Central Bank of Ireland (“Central Bank”) pursuant to the Central Bank Reform Act 2010 (the “Act”).  The Central Bank is subject to the control of a unitary board called the Central Bank Commission, which is chaired by the Governor of the Central Bank, Professor Patrick Honohan.  The Act creates two statutory posts, a Head of Financial Regulation and a Head of Central Banking.  The Chief Executive of what was formerly the Financial Regulator (i.e. Mr Matthew Elderfield) now occupies the position of Head of Financial Regulation.

Of most relevance to the funds industry is the provision in the Act of a new statutory based fitness and probity regime to directors and those occupying key positions in regulated companies.  While formalising much of the current more loosely based fitness and probity regime, the Act provides for more stringent and comprehensive powers of investigation and enforcement.

The Act is the first of a three-stage legislative process to create a new integrated structure for financial regulation. A second bill, the Central Bank (No. 2) Bill, which is expected to be published next year, will enhance the powers and functions of the restructured Central Bank in relation to the prudential supervision of individual financial institutions, the conduct of business, including the protection of consumer interest and the overall stability of the financial system. A third bill, the Central Bank (Consolidation) Bill, which is expected to be published next year, will consolidate the existing statutory arrangements for the Central Bank and financial regulation in Ireland.

For more information in relation to the Act, please click here.