CENTRAL BANK LAUNCHES GUIDANCE ON ENFORCEMENT ACTIONS
The Central Bank has published new Administrative Sanctions Procedure (ASP) Guidance. Readers will be aware that in Section 6.3 of the Outline of the Administrative Sanctions Procedure 2018 (the Outline, available here), the Central Bank sets out the various factors it takes into account when sanctioning firms and individuals under the ASP. The Guidance provides insight as to how the Central Bank interprets sanctioning factors under the four headings as are listed in the Outline: 'the nature, seriousness and impact of the contravention'; 'the conduct of the regulated entity after the contravention'; 'the previous record of the regulated entity'; and 'other general considerations'. A detailed article on the Guidance prepared by the Arthur Cox team is here.
THE DIRECTOR GENERAL OF THE CENTRAL BANK'S SPEECH ON SENIOR EXECUTIVE ACCOUNTABILITY REGIME AND ITS EXPECTATIONS OF FIRMS
On 31 October 2019, the Director General of the Central Bank, Derville Rowland, addressed IBEC and the National Fraud Prevention Conference on proposals regarding Individual Accountability and the Senior Executive Accountability Regime (SEAR).
Her speech outlined the reasons why the Central Bank has advocated for more individual accountability at senior level, addressed what the Central Bank's proposals are in this context, and illustrated why the Central Bank feels the proposed regime will play an important part in helping firms drive a 'positive and consumer focused culture in the future'.
In line with global regulatory moves towards greater individual accountability, the Central Bank proposes:
the introduction of five clear and enforceable conduct standards to apply to all staff in all regulated firms, (for example, a standard to behave with honesty and integrity), with some additional conduct standards for senior managers; the SEAR will be introduced to ensure that senior managers have clear responsibilities within the business, for which they will be held accountable; a unified enforcement process, to apply to breaches by firms and individuals of financial services legislation; and further enhancements to the current Fitness & Probity Regime regarding firms' assessment of individuals in senior positions. The proposed unified enforcement process will allow the Central Bank to pursue individuals directly, rather than only where they are proven to have participated in a firm's wrongdoing. The Central Bank also expects professional advisers to play their part in driving the cultural transformation, by advising firms 'to comply not only with the letter of the rules, but also with the spirit'.
The Director General emphasised that while robust enforcement action continues to underpin the Central Bank's powers, it would 'far rather that firms focus on preventing wrongdoing in the first place than on punishing them after the fact'. The Central Bank plans to intensify their focus on conduct...