OREANDA-NEWS. Following an investigation conducted by the Central Bank of Ireland (the “Central Bank”) under its Administrative Sanctions Procedure (pursuant to Part IIIC of the Central Bank Act 1942 (as amended) (the “Act”)), the Central Bank has determined that it has reasonable grounds to suspect that Irish Nationwide Building Society (“INBS”) has committed certain prescribed contraventions and that certain persons who were concerned in the management of INBS at the relevant time participated in the commission of those suspected prescribed contraventions.  In accordance with Part IIIC of the Act, an Inquiry will be held by the Central Bank to establish whether these suspected prescribed contraventions have been committed by INBS and whether certain persons who were concerned in the management of INBS participated in the commission of those suspected prescribed contraventions by INBS.

Part IIIC of the Act provides the Central Bank with the power to administer sanctions in respect of the commission of prescribed contravention(s) by regulated financial service providers and the participation in the commission of the prescribed contravention(s) by persons concerned in their management.

Where a concern arises that a prescribed contravention has been or is being committed, the Enforcement Directorate (“Enforcement”) of the Central Bank may investigate.  Following an investigation, an Inquiry may be held where there are reasonable grounds to suspect that a prescribed contravention has been or is being committed. The purpose of the Inquiry is to (i) determine if the regulated financial service provider has committed the prescribed contraventions and, where relevant, determine if any person(s) concerned in the management of the regulated financial service provider[1] have participated in the commission of the prescribed contravention and (ii) determine the appropriate sanctions. 

The ASP provides that, any time before the conclusion of an Inquiry, the matter may be resolved by entering into a settlement agreement.  This is a written agreement which binds the Central Bank and the regulated entity. 

Prescribed contravention

A prescribed contravention could be a breach of:

  • a provision in legislation;
  • a code, or a direction, given pursuant to legislation;
  • a condition or requirement imposed on a regulated entity under legislation, a code or direction; or
  • any obligation imposed on any person by the legislation governing the ASP Inquiry process (i.e. Part IIIC of the Act) or imposed by the Central Bank under that legislation.    

ASP Inquiry

Part IIIC of the Act sets out the overall framework for how ASP Inquiries are to be carried out. The Central Bank has prescribed Inquiry Guidelines in order to set out the general procedure which the Central Bank ordinarily proposes to follow at an ASP Inquiry.  

There are certain preliminary procedures which are set out in the Inquiry Guidelines[2]. The Regulatory Decisions Unit shall issue a Notice of Inquiry to the regulated entity. The Notice of Inquiry will:

(a) set out the suspected prescribed contravention(s) and the grounds upon which the suspicions are based, as outlined by Enforcement at referral; and

(b) append an Inquiry Management Questionnaire (“the Questionnaire”).

The Notice of Inquiry will be accompanied by a copy of all documentation provided to the Regulatory Decisions Unit by Enforcement at the time of referral together with confirmations from Inquiry Members that they are not prevented from participating in the Inquiry by virtue of any conflict of interest.

The Questionnaire must be completed and returned to the Regulatory Decisions Unit within such time as specified in the Questionnaire.

The Inquiry Members will decide how the Inquiry will proceed and the procedures to be followed. The Inquiry is not a court of law and the Inquiry procedure will be kept as informal as possible. However an Inquiry into suspected prescribed contraventions is a serious matter and the procedure at Inquiry must reflect this. It is a matter for the Inquiry Members to decide in each Inquiry whether they wish to hold an oral hearing and they will consider if this is necessary for a fair determination of whether the prescribed contravention(s) were committed.

 

[1] All further references to “regulated entity” are to either or both of the regulated financial service provider or the person concerned in the management of the regulated financial service provider. Similarly, reference to a regulated entity having committed a prescribed contravention, can be taken to include situations where person(s) concerned in the management of a regulated entity participated in the commission of that prescribed contravention.

[2] For a flowchart of this stage of the Inquiry see Appendix 1 to the Inquiry Guidelines.