The Central Bank (Supervision and Enforcement) Act 2013 (the
"Act") came into force on 1 August
2013.
The Act strengthens the powers of the Central Bank to impose and
supervise compliance with regulatory requirements. The Central Bank
is provided with greater access to information and analysis,
including the power to require financial service providers to
commission an independent and objective report on any aspect of
their business.
Additional powers afforded to the Central Bank include the
following:
- Powers of the Central Bank to introduce customer redress schemes for problems such as overcharging or systems failures;
- The Central Bank may draft regulations and issue directions on a range of conduct-of-business areas, including consumer protection;
- The Central Bank's enforcement powers have been strengthened under the Act. For example, the Central Bank may seek a High Court order restraining a person from engaging in conduct that contravenes a provision of financial services legislation;
- A doubling of the maximum administrative sanction that the Central Bank may impose from €0.5 million to €1 million for an individual and from €5 million to €10 million for a firm;
- Enhanced powers of inspection, investigation and information gathering for Central Bank authorised officers; and
- The Central Bank can require an auditor to provide a written report on compliance by a financial service provider with certain requirements.
Other key features of the Act include:
- A new regulatory regime for debt management and debt advice;
- The Financial Services Ombudsman can name financial service providers that are the subject of complaints;
- Enhanced protections for whistle-blowers and the provision of assistance by the Central Bank to overseas supervisors; and
- A new system to allow banks from outside the EU to apply to set up a branch in Ireland.
Please click here to view the Act in full.
New AML provisions enacted
The Criminal Justice Act 2013 (the
"Act") was signed into law on 12 June
2013. The Act amends the existing anti-money laundering (AML)
legislation contained in the Criminal Justice (Money Laundering and
Terrorist Financing) Act 2010. The amendments will align certain
provisions more closely with international standards and amend a
number of provisions to reflect operational requirements. The AML
provisions in the Act require the making of commencement
orders by the Minister of Justice and Equality.
The Act also contains provisions allowing orders to be made
suspending mobile phone and internet services where there is a
perceived serious threat of the use of an explosive or other
lethal device that could be activated via a mobile communications
service.
The AML measures contained in the Act include:
- A revised definition of "occasional transaction";
- Clarification of the obligations of solicitors and other independent legal professionals;
- A requirement for designated persons to take account of situations where an existing client or customer subsequently becomes a politically exposed person (PEP);
- A requirement for designated persons to clearly establish that simplified client due diligence can apply in certain situations;
- Revised obligations on internal AML policies and procedures;
- Additional powers for "state competent authorities".
Please click here to view the Act in full.
PII and insurance mediation
The European Communities (Insurance Mediation) Regulations 2005
(SI 13/2005) (the "Regulations")
transpose the provisions of Directive 2002/92 and set out rules for
undertaking insurance mediation and reinsurance mediation. The
Regulations prescribe registration requirements for anyone who
wishes to carry out insurance mediation business or act as an
insurance or reinsurance intermediary.
The Central Bank has now issued a notice increasing the
professional indemnity insurance (PII) cover required under
Regulation 17(2) of the Regulations. From 1 August 2013, all firms
registered under the Regulations must hold PII cover at
an increased level of €1.25 million per claim (currently
€1 million per claim) and €1.85 million in relation to
aggregate claims (currently €1.5 million in relation to
aggregate claims). Firms which hold existing PII cover will be
required to increase their level of cover as and when their policy
comes up for renewal after 1 August 2013.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
