Summary Obligations Of The Central Bank (Supervision And Enforcement) Act 2013

Author:Mr John Breslin
Profession:Maples and Calder

The recently enacted Central Bank (Supervision and Enforcement) Act 2013 ("2013 Act") will fundamentally change the regulatory landscape in banking and financial services. It greatly enhances  the powers of the Central Bank of Ireland ("CBI") in a number of respects. These include the following: It gives the CBI the power to write rules in a broad range of areas including conduct of business, financial regulation systems and procedures and dealing with client assets. The CBI is not obliged to consult with persons other than the Minister for Finance before making these rules. Notwithstanding it is hoped that the CBI will engage in a robust consultation exercise with industry in advance of finalising these rules. If a regulated entity breaches any of these new rules, and this causes loss to a customer, the customer can sue for damages on foot of a statutory right of action. This right is not confined to private customers. However it probably does not apply to counterparties. Where a regulated entity has engaged in "widespread or regular" breaches of rules causing customer loss, the CBI can direct the entity to provide for a scheme of redress. This is, in effect, a form of "classaction" relief. The CBI can direct a regulated entity to provide a report to the CBI (at the entity's cost), or an auditor's report, with regard to certain regulatory matters specified by the CBI. Legal protections are provided for "whistleblowers." These do not extend, however, to anonymous disclosures. The CBI's information-gathering and inspection powers are bolstered. Further these provisions impact significantly on the manner by which the privilege against self-incrimination and the entitlement to legal professional privilege may be claimed. The CBI's powers to give directions to a regulated entity to...

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