Financial Regulatory Authorisation: Doorway Or Barrier To The Irish Market?

Author:Mr Tom Carney
Profession:Dillon Eustace
  1. Introduction

    The Financial Regulator is an Irish statutory body

    established by the Central Bank and Financial Services

    Authority of Ireland Act, 2003 ("the Act"). The Act

    sets out inter alia the powers and duties of the

    regulator in respect of the authorization and supervision of

    financial service and insurance service providers.

    Where the Financial Regulator authorizes an undertaking to

    engage in financial or insurance service activities, that

    authorization represents a State act conferring official

    permission, sanction or approval on the undertaking to perform

    those activities in Ireland, subject to the terms and

    conditions of the authorization and having regard to the

    broader EU and Irish legal/regulatory framework enforced by


    In exercising its authorization function, the Financial

    Regulator must at all times be mindful of its obligations under

    Irish constitutional law, administrative law and EU law. As a

    matter of Irish law, any grant or refusal of authorization by

    the Financial Regulator is a decision of a public body subject

    to judicial review before the Irish courts. As a matter of

    administrative law, the regulator is required to set out

    reasons for any denial of authorization to an applicant


  2. The Legal Framework Considered

    Under EU law, any State measure requiring a potential

    entrant to hold a licence or authorization is on its face a

    legal/regulatory barrier to entry into the Irish financial

    and/or insurance service markets. It is a matter of fact,

    however, that exercise by the Financial Regulator of its

    authorization function is necessary for, amongst other things,

    the protection of consumer interests and the common good.

    Balanced against this, Ireland is an EU Member State. The

    European Union is committed legally and politically to the

    creation of an internal market where goods and services move

    freely and where EU undertakings enjoy freedom of establishment

    within a legal framework designed to eliminate/reduce

    cross-border obstacles to the free movement of trade in


    Article 49 of the EC Treaty guarantees the free movement of

    services within a broader legal framework set out in the

    treaty. Article 49 is directly effective as a matter of EC law,

    and as such it engenders legal rights in individuals which may

    be relied upon before the national courts. Any financial or

    insurance service provider is entitled to rely on Article 49 to

    challenge, before the Irish courts or the European Commission,


To continue reading