CENTRAL BANK ACT, 1989

AN ACT TO AMEND AND EXTEND THE LAW RELATING TO THE CENTRAL BANK OF IRELAND, THE DECIMAL CURRENCY ACTS, 1969 AND 1970, AND THE LAW RELATING TO CERTAIN FINANCIAL TRANSACTIONS AND TO PROVIDE FOR OTHER MATTERS CONNECTED WITH THE MATTERS AFORESAID. [12th July, 1989]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I Preliminary and General

1 Short title.

1.—This Act may be cited as the Central Bank Act, 1989.

2 Commencement.

2.—This Part and Chapter VII of Part II shall come into operation upon the passing of this Act, and except where otherwise provided for, the other provisions of this Act shall come into operation on such day or days as may be fixed therefor by order or orders of the Minister, either generally or with reference to any particular purpose or provision, and different days may be so fixed for different purposes and different provisions of this Act.

3 Interpretation generally.

3.—(1) In this Act—

“the Bank” means the Central Bank of Ireland;

“the Minister” means the Minister for Finance.

• (2) In this Act, a reference to a Part or Chapter, section or Schedule is to a Part or Chapter or section of or Schedule to this Act, unless it is indicated that a reference to some other enactment is intended.

• (3) In this Act, a reference to a subsection or paragraph is to the subsection or paragraph of the provision in which the reference occurs, unless it is indicated that a reference to some other provision is intended.

4 Repeals.

4.—The Acts specified in the Schedule are hereby repealed to the extent specified in the third column of that Schedule.

PART II The Central Bank

Chapter I Preliminary, Alteration of Penalties and General Offence Provisions

5 Definitions (Part II).

5.—In this Part—

“the Act of 1971” means the Central Bank Act, 1971;

“the Principal Act” means the Central Bank Act, 1942.

6 Construction and collective citation (Part II).

6.—The Principal Act, the Central Bank Act, 1961, the Central Bank Act, 1964, the Act of 1971 and this Part shall be construed together as one Act and may be cited together as the Central Bank Acts, 1942 to 1989.

7 Laying of regulations and orders before Houses of the Oireachtas.

7.—Every regulation and order (other than regulations under section 15 or to which section 23 (3) relates or an order under section 79) made under this Part shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation or order is passed by either such House within the next 21 days on which that House has sat after the regulation or order is laid before it, the regulation or order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

8 Alteration of penalties under Principal Act.

8.—The Principal Act is hereby amended—

• (a) in section 55, by the substitution of the following subsection for subsection (1):

• “(1) If any person makes, or causes to be made, or uses for any purpose whatsoever, or utters any document purporting to be, or in any way resembling, or so nearly resembling as to be calculated to deceive, a bank note or part of a bank note, he shall be guilty of an offence under this subsection and shall be liable—

  • (a) on summary conviction to a fine not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months, or to both, or

  • (b) on conviction on indictment to a fine not exceeding £10,000 or, at the discretion of the court, to imprisonment for a term not exceeding 5 years, or to both.”;

• (b) in section 56, by the substitution of the following subsection for subsection (2):

• “(2) Every person who makes, provides, issues, re-issues, or gives or receives in payment any document in contravention of subsection (1) of this section shall be guilty of an offence under this section and shall be liable—

  • (a) on summary conviction, to a fine not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months or to both, or

  • (b) on conviction on indictment, to a fine not exceeding £10,000 or, at the discretion of the court, to imprisonment for a term not exceeding five years, or to both.”;

• (c) in section 65, by the substitution of the following subsection for subsection (2):

• “(2)

  • (a) It shall be the duty of every person on whom a notice is served by the Bank under subsection (1) of this section to comply with such notice within the time or on the periodic occasions (as the case may be) specified in such notice, and if he fails so to do, he shall be guilty of an offence under this section and shall be liable, on summary conviction, to a fine not exceeding £1,000.

  • (b) Where a person has been convicted of an offence by virtue of paragraph (a) of this subsection and, after the conviction, the failure to comply continues, the person shall be guilty of contravening this section on every day on which the contravention continues after that conviction and for each such offence he shall be liable on summary conviction to a fine not exceeding £100.”.

9 Offences and penalties under Act of 1971.

9.—The Act of 1971 is hereby amended by the substitution of the following section for section 58:

“58.—(1) Any person who contravenes section 7, 14, 17, 18 or 27 of this Act and a holder of a licence who—

• (a) has obtained a licence through false statements or any other irregular means,

• (b) contravenes section 19, 20, 26, 31 or 33 of this Act,

• (c) commits by act or omission a breach of a condition duly imposed and which relates to a licence,

• (d) fails to comply with a direction under section 11 (3) (c) (inserted by section 34 of the Central Bank Act, 1989), 21 or 22 of this Act, or a requisition under section 23 of this Act, or

• (e) contravenes regulations under section 24 or 25 of this Act,

shall be guilty of an offence and shall be liable—

- (i) on summary conviction, to a fine not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months, or to both, or

- (ii) on conviction on indictment, to a fine not exceeding £50,000 or, at the discretion of the court, to imprisonment for a term not exceeding 5 years, or to both,

  and, if the contravention, breach or failure in respect of which he was convicted is continued after conviction, he shall be guilty of an offence on every day on which the contravention, breach or failure continues after conviction in respect of the original contravention, breach or failure and for each such offence he shall be liable on summary conviction to a fine not exceeding £100 or on conviction on indictment to a fine not exceeding £5,000.

• (2) Where there is a contravention in relation to a unit trust scheme of section 14 (2) of this Act, the manager under the scheme shall be deemed to have contravened section 14 of this Act.

• (3) In any proceedings for an offence under this section which relates to section 27 of this Act, it shall be a good defence for the accused to prove that he was, at the relevant time, a person whose business it was to publish or arrange for the publication on behalf of some other person of advertisements or other solicitations and that the relevant advertisement or other solicitation was received for publication in the ordinary course of that business and that he did not know and had no reason to suspect that to use it to advertise or otherwise solicit could be an offence.”.

10 Prosecution of offences by Bank.

10.—An offence under the Central Bank Acts, 1942 to 1989, which is being tried summarily may be prosecuted by the Bank and a statement made by the person conducting such prosecution that the prosecution has been commenced with the authority of the Bank shall be sufficient evidence that the prosecution was so commenced.

11 Offences in relation to certain bodies.

11.—Where an offence under the Central Bank Acts, 1942 to 1989, is committed by a body corporate or by a person purporting to act on behalf of a body corporate or an unincorporated body of persons and is proved to have been so committed with the consent or approval of, or to have been facilitated by any wilful neglect on the part of, another person (being a director, manager, secretary, member of any committee of management or other controlling authority of such body or official of such body) that other person shall, as well as the body corporate or the person so purporting to act, be guilty of an offence and shall be liable to be proceeded against and punished accordingly.

Chapter II General Provisions Relating to the Bank

12 Additional powers and functions of Bank.

12.—(1) The repeal of the Currency Act, 1927, by section 4 shall not affect any function, power or duty exercisable by the Bank by virtue of section 6 (1) of the Principal Act.

• (2) For the avoidance of doubt it is hereby declared that the powers and functions exercisable by virtue of section 47 of the Act of 1971 include the powers—

• (a) to acquire, hold, sell, assign or otherwise deal in securities or any other property,

• (b) to extend loans and advances, and

• (c) to give guarantees and make payments on foot of such guarantees.

• (3) The Bank shall, for the purpose of—

• (a) the protection of the interests of persons, or any class thereof, maintaining deposits with any other person in respect of which the business of that other person is supervised by the Bank, or

• (b) the orderly and proper regulation of the business of any person in respect of which he is so supervised,

have the following powers, where they are not already exercisable by the Bank, that is to say the powers—

• (i) to acquire, hold, sell, assign or otherwise deal in securities or any other property,

• (ii) to extend loans and advances, and

• (iii) to give guarantees and make payments on foot of such guarantees.

13 Fees in respect of supervision by Bank.

13.—(1) Subject to subsection (3), the Minister may, after consulting the Bank, by regulation prescribe the fee to be paid to the Bank by any person supervised by it under any enactment and different fees may be prescribed for different classes of persons.

• (2) Regulations under this section may provide for such incidental or related matters as are, in the opinion of the Minister, necessary to give effect to such fees.

• (3) Where the Minister proposes to prescribe a fee under subsection (1), he shall—

• (a) notify the persons of the class to which the proposed fee relates of that proposed fee, and

• (b) only prescribe the proposed fee or a lesser fee after he has considered any representations made to him within such period, being not less than two months after the date the notification was sent by him to each person concerned, as he shall specify in the notification.

• (4) In this section “person” includes a financial futures and options exchange within the meaning assigned to it for the purposes of Chapter VIII.

14 Composition of Board of Directors.

14.—(1) Subject to subsection (3), the Principal Act is hereby amended—

• (a) by the substitution of the following subsection for subsection (3) of section 5:

• “(3) The Bank shall be conducted and managed in accordance with this Act by a Board of Directors consisting of—

  • (a) a Governor, and

  • (b) such number of other Directors (not exceeding nine and not including at any one time more than two service Directors) as the Minister shall from time to time determine.”;

• (b) by the deletion of sections 14 (5), 23 (7) and 29;

• (c) by the substitution of the following section for section 24:

“Tenure of office of the Directors.

24.—(1) Every Director (other than a service Director and a Director appointed to fill a casual vacancy) shall, unless he sooner dies, resigns or becomes disqualified, hold office for five years from the expiration by effluxion of time of the term of office of his predecessor.

• (2) Every Director (other than a service Director) who is appointed for a purpose other than filling a vacancy amongst the Directors (other than as aforesaid) shall, unless he sooner dies, resigns or becomes disqualified, hold office for five years from the day as on and from which he is appointed.

• (3) Every service Director shall hold office at the pleasure of the Minister and may be removed by the Minister at any time.

• (4) A person appointed to fill a casual vacancy in the office of Director (other than the office of a service Director) shall hold office for the residue of the term for which the Director whose death, resignation, or disqualification created the vacancy would have held office if he had not died, resigned or become disqualified.”;

• (d) in section 28 (which relates to notices of vacancies and appointments of certain Directors) by the substitution of the following subsection for subsection (1):

• “(1) This section applies only to Directors who are not service Directors.”.

• (2) Subject to subsection (3), the Act of 1971 is hereby amended by the deletion of section 53.

• (3)
• (a) Any person who, immediately before the coming into operation of this section, was a banking Director shall, unless his term of office expires on such coming into operation, continue to hold office for the period of 3 months thereafter unless he sooner dies, resigns or becomes disqualified.

• (b) In respect of each Director to whom paragraph (a) applies, the provisions of sections 14 (5), 23 (7) and 29 of the Principal Act and section 53 (3) of the Act of 1971 shall continue to apply to him, until he ceases to be a banking Director in accordance with paragraph (a), as if this section had not been enacted.

15 Offices and staff of Bank.

15.—(1) The Bank may purchase, take on lease, build or otherwise acquire and may equip and maintain such offices and other premises in such places as it considers necessary for the due performance of its functions under this Act and may sell or let any such premises which it considers to be no longer necessary for that purpose.

• (2) The Bank shall appoint a secretary and such other officers and servants as the Bank shall from time to time consider necessary for the due performance of its functions under this Act and every secretary, officer, and servant so appointed shall hold office upon such terms and subject to such conditions as the Bank shall determine.

• (3)
• (a) Subject to the provisions of paragraph (b), every appointment under subsection (2) of an officer or servant of the Bank shall be made by competition (including a qualifying or competitive test in Irish) to be conducted according to regulations to be made by the Board and the Board may, in relation to any such competition, impose such conditions of entry, limitations, and safeguards as it thinks proper.

• (b) Paragraph (a) shall not apply to appointment to a position in respect of which appointment by competition is, in the opinion of the Board, unsuitable.

• (4) There shall be paid to the secretary and the other officers and servants of the Bank such salaries and remuneration as the Bank may determine.

• (5)
• (a) The Bank may, with the approval of the Minister make such further scheme or schemes for granting pensions, allowances and gratuities on retirement or death to or in respect of such of its officers and servants as it thinks proper and may, out of funds available under the Central Bank Acts, 1942 to 1989, for defrayal of the expenses of the Bank, pay in respect of such persons on retirement or death the pensions, allowances or gratuities in accordance with the relevant scheme and the Minister may determine the said funds to be public funds for the purposes of the Superannuation Act, 1892.

• (b) The Bank may from time to time, with the approval of the Minister, make a scheme amending a scheme under paragraph (a).

• (c) Without prejudice to the generality of the foregoing, a scheme under this subsection may provide for the granting of superannuation benefits (including pensions, allowances and gratuities) to widows and children of officers and servants of the Bank and for the payment of contributions in respect of such benefits by the officers and servants to whom the scheme applies.

• (6) Every scheme made under subsection (4) of section 31 of the Currency Act, 1927, shall, to the extent that it is still in force immediately before the coming into operation of this section, continue in force as if that subsection had not been repealed by this Act.

• (7) Subsection (2) of section 54 of the Act of 1971 is hereby amended by the insertion of “(as continued in force by virtue of section 15 (6) of the Central Bank Act, 1989)” after “the Act of 1927” and the said subsection, as so amended, is set out in the Table to this section.

• (8) Every scheme made by the Bank under subsection (5) shall be laid before each House of the Oireachtas as soon as may be after it is made and if either such House, within the next subsequent 21 days on which it has sat after such scheme is laid before it, passes a resolution annulling such scheme, such scheme shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

TABLE

• (2) The Bank may from time to time, with the approval of the Minister, make a scheme amending a scheme under section 31 (4) of the Act of 1927 (as continued in force by virtue of section 15 (6) of the Central Bank Act, 1989) or section 33 (1) (c) of the Act of 1942 or a scheme under this subsection and a scheme under this subsection may, without prejudice to the generality of the foregoing, provide for the granting of superannuation benefits (including pensions, allowances and gratuities) to widows and children of persons to whom those schemes apply and for the payment of contributions in respect of such benefits by the persons to whom those schemes apply.

16 Disclosure of information.

16.—(1) A person, who at the commencement of this section is, or at any time thereafter is appointed, Governor or a Director, officer or servant of the Bank or who is employed by the Bank in any other capacity, shall not disclose, during his term of office or employment or at any time thereafter, any information concerning—

• (a) the business of any person or body (whether corporate or unincorporate) which came to his knowledge by virtue of his office or employment, or

• (b) the Bank's activities in respect of the protection of the integrity of the currency or the control of credit,

unless such disclosure is to enable the Bank to carry out its functions under the Central Bank Acts, 1942 to 1989, or under any enactment amending those Acts.

• (2) The provisions as to non-disclosure contained in subsection (1) shall not apply to any disclosure—

• (a) required by a court in connection with any criminal proceedings,

• (b) made with the consent of the person to whom the information relates and, where not the same person, of the person from whom that information was obtained,

• (c) where the Bank is acting or has acted in the capacity of an agent for a person, made to the person in respect of that capacity,

• (d) where the Bank considers it necessary for the common good, made to any person charged by law with the supervision of financial institutions (whether or not entitled to take money on deposit from the public) and who, in the opinion of the Bank, has obligations concerning that person duly imposed in respect of non-disclosure of information and corresponding to obligations under this section,

• (e) made to an authority in a foreign jurisdiction duly authorised to exercise functions in that jurisdiction which correspond to the functions of the Bank under this Part and Part II of the Act of 1971 and which, in the opinion of the Bank, has obligations concerning the authority duly imposed in respect of non-disclosure of information and corresponding to obligations under this section,

• (f) made to any institution of the European Communities for the purpose of the State's membership of any of those Communities,

• (g) made for the purpose of complying with any requirement, under the Central Bank Acts, 1942 to 1989, or any other enactment, that a report, statement or other document be laid before a House of the Oireachtas,

and the provisions as to non-disclosure contained in paragraphs (a) and (b) of subsection (1) shall not apply to any disclosure—

• (i) in the case of the said paragraph (a), which, in the opinion of the Bank, is necessary for the protection of depositors of money with any person carrying on the business of banking or any business to which section 7 (4) (a) (ii) of the Act of 1971 (as amended by this Act) or regulations under section 26 relate or to safeguard the interests of the Bank,

• (ii) in the case of the said paragraph (b), made with the consent of the Bank or where the disclosure is not prejudicial to—

• (I) the operations of the Bank in any financial market, or

• (II) the issue by the Bank of legal tender, or

• (III) the integrity of the currency.

• (3) After the commencement of this section, every person who is appointed Governor or a Director, officer or servant of the Bank, or who is employed by the Bank in any other capacity, shall—

• (a) before entering into the office or employment, be informed by the Bank of his obligations under this section, and

• (b) acknowledge that he has been so informed and understands his obligations,

in such manner as the Bank shall determine.

• (4) A person who contravenes subsection (1) shall be guilty of an offence and shall be liable—

• (a) on summary conviction to a fine not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months, or to both, or

• (b) on conviction on indictment to a fine not exceeding £25,000 or, at the discretion of the court, to imprisonment for a term not exceeding five years, or to both.

• (5) In any proceedings for an offence under this section, it shall not be necessary to prove that the provisions of subsection (2) do not apply and the onus of proving that any of those provisions do apply shall be on the person seeking to avail himself thereof.

17 Prevention of corruption.

17.—With effect from the commencement of this section, the provisions of the Prevention of Corruption Act, 1906, and the Prevention of Corruption Act, 1916, shall apply to every person to whom section 16 relates and, accordingly—

• (a) section 1 (3) of the said Act of 1906 (as adapted by the Prevention of Corruption Acts, 1889 to 1916, Adaptation Order, 1928 (S.R. & O. No. 37 of 1928)) and section 2 of the said Act of 1916 (as so adapted) shall be construed as if there were included, after the reference to a person holding an office remunerated out of the Central Fund or moneys provided by the Oireachtas, a reference to a person to whom section 16 of the Central Bank Act, 1989, relates, and

• (b) sections 1 and 2 of the said Act of 1916 (as so adapted) shall be construed as if there were included, after the reference to a statutory body required by law to exercise its functions subject to the direction and control of a Minister who is head of a Department of State, a reference to the Bank.

18 Keeping of documents.

18.—(1) No provision of the National Debt Act, 1870, or of the Central Bank Acts, 1942 to 1989, shall be construed as requiring the Bank to preserve any document or other record for a period of more than 6 years after the latest date of the period to which such document or other record relates and no regulation under section 17 of the Finance Act, 1911, or section 37 of the Finance Act, 1917, shall provide for the preservation of such document or other record for a period of more than the said 6 years.

• (2) A document or other record to which subsection (1) refers may be kept in whole or in part by recording otherwise than in a legible form so long as the recording is capable of being reproduced in a legible form.

• (3) In any legal proceedings, a copy or reproduction in legible form of any entry in a document or other record kept, or formerly kept, by the Bank shall be received as evidence of such entry or of the matters therein recorded where such document or other record has been destroyed or is kept by the Bank otherwise than in a legible form.

19 Accounts and records of Bank.

19.—(1) The Bank shall keep all proper books of account and other books and records, and shall within 6 months after the end of every year prepare and transmit to the Comptroller and Auditor General a statement of accounts in respect of such year in such form as shall be approved of, from time to time, by the Minister after consulting with the Bank.

• (2) The Comptroller and Auditor General shall audit, certify, and report upon every statement of accounts transmitted to him by the Bank under this section and every such report of the Comptroller and Auditor General together with the statement of accounts to which it relates shall be transmitted by him to the Minister who shall cause copies of the documents so transmitted to be laid before each House of the Oireachtas.

20 Report and returns by Bank.

20.—(1) The Bank shall, within 6 months after the expiration of every year, prepare and send to the Minister a report of its proceedings during such year and the Minister shall cause copies of the report to be laid before each House of the Oireachtas as soon as possible after its receipt by him.

• (2) The Bank shall furnish to the Minister for publication in the Iris Oifigiúil such periodical returns in respect of the transactions of the Bank as the Minister may from time to time direct.

21 Exemption of Bank from taxes.

21.—Notwithstanding any provision of the Tax Acts or the Capital Gains Tax Acts, profits, income and chargeable gains of the Bank shall be exempt from corporation tax, income tax and capital gains tax.

22 Winding up of legal tender note fund and transfer of assets to general fund.

22.—(1) As soon as possible after the date on which this section comes into operation and in any event with effect from a date not later than one month thereafter, the legal tender note fund shall be wound up by the Bank and the assets of that fund shall be transferred to the general fund.

• (2) The legal tender notes on issue at any time after the winding up of the legal tender note fund shall be a liability on the general fund.

• (3)
• (a) References to the legal tender note fund in any statute (other than this Act) or instrument made under such statute and in force at the date of the winding up of the legal tender note fund shall, with effect from that date, be construed as references to the general fund unless the context otherwise requires.

• (b) The Minister may by regulations make, in respect of any statute or instrument to which paragraph (a) applies and relating to any matter dealt with by this section, any adaptations or modifications which appear to him to be necessary to enable such statute or instrument to have effect in conformity with this section.

• (4) As soon as possible after the winding up of the legal tender note fund, the Bank shall cause a notice to that effect to be published in the Iris Oifigiúil which shall state therein the date of the winding up.

23 General fund.

23.—(1) Notwithstanding the repeal of section 63 of the Currency Act, 1927, the Bank shall continue to keep the fund called the general fund to which it shall carry all receipts and out of which it shall draw all payments.

• (2) The Minister may, after consultation with the Bank, make regulations providing for the determination periodically of the surplus income of the Bank and may by such regulations enable provisions to be made for reserves, depreciation, and other like matters before determination of the surplus income.

• (3) Any regulations made under section 63 (5) of the Currency Act, 1927, shall, to the extent that they are still in force immediately before the coming into operation of this section, be deemed to have been made under this section.

• (4) The Bank shall pay its surplus income as and when determined under this section into the Exchequer in such manner as the Minister shall direct and may at any time pending such determination pay into the Exchequer such sums on account of surplus income as may be agreed upon by the Minister and the Bank.

24 Monetary unit and exchange rate.

24.—(1) The monetary unit of the State shall be the Irish pound which shall be issued in legal tender form.

• (2) The Minister may, whenever he considers it necessary after consultation with the Bank, do either or both of the following, that is to say:

• (a) vary the general exchange rate arrangements for the time being for the Irish pound in respect of any or all other monetary units,

• (b) make specific exchange rate adjustments consistent with those arrangements.

• (3) Whenever the Minister varies the general exchange rate arrangements or makes specific exchange rate adjustments under subsection (2), a notice to that effect shall be published in the Iris Oifigiúil.

25 Currency in which contracts, etc., are made.

25.—Every contract, sale, payment, bill, note, instrument, and security for money, and every transaction, dealing, matter, and thing whatever relating to money or involving the payment or the liability to pay any money which is made, executed, entered into, done, or had on or after the coming into operation of this section shall be made, executed, entered into, done and had according to coins or notes which are for the time being legal tender in the State and not otherwise, unless the same be made, executed, entered into, done or had according to a currency other than the currency of the State.

Chapter III Licensing and Supervision of Licence Holders

26 Extension of application of licensing and supervisory provisions.

26.—Where, after consulting with the Bank and with such Ministers of the Government (if any) as he considers it appropriate to consult with in the circumstances, the Minister is of the opinion that, in respect of any class of financial business which is not supervised by the Bank under the Central Bank Acts, 1942 to 1989, it is necessary for—

• (a) the protection of the public or any class thereof from financial loss, or

• (b) the orderly and proper regulation of financial markets,

that such class of financial business ought to be either or both licensed and supervised by the Bank, he may by regulations apply to the said class all or any of the licensing and supervisory provisions (including those provisions which relate to auditors and liquidators) of Part II of the Act of 1971 or of this Chapter or Chapters I, II and IV with such modifications or adaptations as he considers appropriate.

27 Investigation of complaints.

27.—(1) The Minister may, by regulations made after consultation with the Bank, require the holder of a licence to establish or join in establishing a scheme or schemes for the investigation of complaints against that holder or an associated company in relation to a prescribed matter of complaint.

• (2) Without prejudice to the generality of subsection (1), regulations under this section may make provision in relation to any one or more of the following—

• (a) the establishment and administration of a scheme,

• (b) the manner of appointment of an independent adjudicator to conduct investigations,

• (c) the matters to be subject to investigation under the scheme,

• (d) the grounds on which a complaint must be based,

• (e) the powers of, and procedure to be followed in the conduct of investigations by, the adjudicator,

• (f) the circumstances in and the extent to which determinations are binding,

• (g) the procedures for the making of complaints,

• (h) the publication of the adjudicator's findings,

• (i) the approval of the scheme by the Bank.

• (3) Subject to subsection (4), the reference of a complaint under a scheme established under this section shall not affect the rights of any person to have a dispute determined in any other manner provided by law.

• (4) Where on a complaint under a scheme established under this section the parties concerned agree that a determination in accordance with the scheme shall be binding on them and the scheme provides for such an agreement, then the determination shall be binding on the parties.

• (5) In this section “associated company” means (where appropriate)—

• (a) a holding company or a subsidiary company (within the meanings respectively given to them by section 155 of the Companies Act, 1963),

• (b) a company which is a subsidiary of a body corporate, where the holder of the licence concerned is also a subsidiary of the body corporate, but neither is a subsidiary of the other.

28 Charges, etc., by holders of licences.

28.—(1) Each holder of a licence shall, within two months of the coming into operation of this section (in the case of existing licence holders) or of the grant of a licence (in any other case), notify the Bank of—

• (a) all charges imposed by such holder in relation to the provision of any service to the public or to any class of the public, and

• (b) any term or condition upon or subject to which such service is provided.

• (2) The holder of a licence shall notify the Bank of every proposal—

• (a) to change any charge, term or condition which has been previously notified to the Bank for the purposes of this section, or

• (b) to impose any charge, term or condition, applying to the provision of a service to the public or to any class of the public, which has not been previously notified to the Bank for the purposes of this section.

• (3) The Bank may direct the holder of a licence—

• (a) to refrain from imposing or changing a charge, term or condition, applying to the provision of a service to the public or to any class of the public, without the prior approval of the Bank, and

• (b) to publish, in such manner as may be specified by the Bank from time to time, information on any charge, term or condition applying to the provision of a service to the public or to any class of the public.

• (4) A direction under this section may be expressed to apply—

• (a) to every holder of a licence or to the holders of licences carrying on a specified type of banking business,

• (b) to all services provided to the public or to any class of the public by the holders of licences concerned or to specified services or to services of a specified kind,

• (c) in relation to a specified time or times or during a specified period or periods,

and the direction shall—

• (i) be communicated to every holder of a licence concerned,

• (ii) where not communicated in writing, be confirmed in writing to every such holder concerned as soon as possible thereafter, and

• (iii) have effect in accordance with its terms.

• (5) The Bank shall, in exercising its powers under this section, have regard to the promotion of fair competition between—

• (a) holders of licences,

• (b) holders of licences carrying on a particular type of banking business, and

• (c) holders of licences to which paragraph (a) or (b) relates and such other institutions taking money on deposit as the Bank considers appropriate to take into account.

• (6) The Bank may amend or revoke a subsisting direction under this section and may amend or revoke a subsisting direction which has been amended.

• (7) The Bank may exempt a holder of a licence from the obligation to notify the Bank under this section in respect of—

• (a) any charge which has been individually negotiated bona fide with the holder by a customer, or by or on behalf of a group of customers, of the holder, or

• (b) a class of term or condition applying to a service provided by the holder, if the Bank is of the opinion that it is not necessary for it to be so notified in order to decide whether or not to issue a direction under subsection (3) in respect of the service.

• (8) Any person who contravenes subsection (1), (2), (3) or (4) shall be guilty of an offence and shall be liable—

• (a) on summary conviction, to a fine not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months, or to both, or

• (b) on conviction on indictment, to a fine not exceeding £50,000 or, at the discretion of the court, to imprisonment for a term not exceeding 5 years, or to both,

and, if the contravention in respect of which he was convicted is continued after conviction, he shall be guilty of an offence on every day on which the contravention continues after conviction in respect of the original contravention and for each such offence he shall be liable on summary conviction to a fine not exceeding £100 or on conviction on indictment to a fine not exceeding £5,000.

• (9) In this section, “charge” and “term or condition” do not include any rate of interest.

29 Amendment of section 2 of Act of 1971.

29.—Section 2 of the Act of 1971 is hereby amended—

• (a) by the substitution, respectively, of the following definitions for the definitions of “banking business” and “the Court”:

“‘banking business’ means business which consists of—

• (a) the business of accepting deposits payable on demand or on notice or at a fixed or determinable future date, or

• (b) the business of taking funds, other than deposits, from the public payable on demand or on notice or at a fixed or determinable future date (whether or not involving the issue of securities or other obligations, however described),

but excluding—

- (i) deposits with a trader from persons employed by him in his trading business or from his customers in the normal course of his trading business and deposits or instalments in respect of the letting or selling of goods under a hire-purchase agreement or a credit-sale agreement, or

- (ii) the taking of other funds by a person from the public where it can be shown that—

    - (I) no part of the business activities of the person so taking or of any other person is financed wholly or substantially out of those funds, and

    - (II) such funds are, in the normal course of business, taken on a casual or incidental basis only,

      or

- (iii) moneys taken solely as a premium in respect of the issue or renewal of a life assurance policy issued by a holder of an authorisation under the European Communities (Life Assurance) Regulations, 1984 (S.I. No. 57 of 1984),

  or either or both of the businesses aforesaid and any other business normally carried on by a bank and ‘banking’ and words cognate thereto shall be construed accordingly;

  ‘the Court’ means, except where the context otherwise requires, the High Court;”;

• (b) by the substitution, respectively, of the following definitions for the definitions of “general fund”, “gold bullion”, “issue” and “legal tender note”:

“‘general fund’ means the fund to which section 63 of the Currency Act, 1927, related and which continues to be kept by the Bank by virtue of section 23 of the Central Bank Act, 1989;

‘gold bullion’ includes any gold coins other than gold coins which are for the time being legal tender in the State;

‘issue’, when used in relation to legal tender notes, includes the re-issue of any such note which has ceased to be outstanding;

‘legal tender note’ means a legal tender note provided and issued under and in accordance with the Central Bank Acts, 1942 to 1989, and any other enactment amending or extending those Acts or under any Act repealed by the Central Bank Act, 1989;”.

30 Amendment of section 7 of Act of 1971.

30.—Section 7 of the Act of 1971 is hereby amended by the substitution of the following subsection for subsection (4):

• “(4)

  • (a) Subsection (1) of this section shall not apply in relation to—

    • (i) the central banks in the other states that are members of the European Communities,

    • (ii) the Agricultural Credit Corporation public limited company, the company formed and registered by virtue of section 2 of the Industrial Credit Act, 1933, the Post Office Savings Bank, a trustee savings bank certified under the Trustee Savings Banks Acts, 1863 to 1979, or

    • (iii) a building society, an industrial and provident society, a friendly society, a credit union or the manager or trustee under a unit trust or collective investment scheme in respect of the carrying on of the business of the scheme.

  • (b) Where the Minister is of the opinion that it is in the interest of the orderly and proper regulation of banking or of any other financial market he may, after consultation with the Bank and with such Minister of the Government or other persons as he may consider appropriate to so consult in the circumstances, by order amend paragraph (a) (ii) so as to add thereto any body or category of persons or to delete therefrom any body or category of persons mentioned therein for the time being.”.

31 Exemption of persons from section 7 of Act of 1971.

31.—The Act of 1971 is hereby amended by the substitution of the following section for section 8:

“8. (1) (a) Where, by reason only of a person's use in a name or title of any of the words ‘bank’, ‘banker’ or ‘banking’ or any word which is a variant, derivative or translation of or is analogous to any of those words, the person would be deemed to be holding himself out as a banker, the Bank may exempt the person from the provisions of section 7 of this Act if, in the opinion of the Bank, the person does not in fact carry on or propose to carry on banking business and does not otherwise hold himself out or represent himself as a banker or as carrying on banking business.

• (b) The Bank may at any time revoke an exemption under this subsection where it is of the opinion that at any time after being exempted the person concerned has carried on banking business or otherwise has held himself out or represented himself as a banker or as carrying on a banking business and, upon the exemption being so revoked, that person shall forthwith take all necessary measures to cease using the name or title concerned containing the word to which the revoked exemption related.

• (2)

  • (a) The Bank may exempt any class or classes of person from the requirement for each of them to hold a licence where—

    • (i) the requirement would arise solely out of the issuing of securities or other obligations to which the definition of ‘banking business’ relates, and

    • (ii) the Bank is of the opinion that the exemption would not conflict with the orderly and proper regulation of banking.

  • (b) Where any class of persons have been exempted under this subsection from holding a licence and subsequently the Bank is of the opinion that the circumstances relevant to the exemption have changed and are such that that class would not now be so exempted, the Bank shall revoke the exemption.

  • (c) The Bank shall cause notice of every exemption and revocation under this subsection to be published in the Iris Oifigiúil.”.

32 Grant of licences, etc.

32.—(1) Section 9 of the Act of 1971 is hereby amended:

• (a) by the insertion of the following subsection after subsection (1):

• “(1A) The Bank shall not grant a licence under this section to a person applying for it unless that person satisfies the Bank that it is—

  • (a) a company, or

  • (b) a credit institution within the meaning of Council Directive 77/780/EEC of 12 December, 1977^(1), which has been duly authorised for the purposes of that Directive.”;

• (b) by the substitution of the following subsection for subsection (3):

• “(3) Whenever the Bank proposes to refuse to grant a licence to a person—

  • (a) it shall—

    • (i) within the period of six months after the date of the receipt of the application for the licence, or

    • (ii) where additional information in relation to the application has been sought by the Bank, within the period of six months after the date of the receipt by the Bank of the additional information or the period of twelve months after the date of the receipt of the application for the licence whichever period first expires,

    notify the person in writing that it intends to seek the consent of the Minister to the proposed refusal and of its reasons for the refusal and that the person may, within the period of twenty-one days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed refusal,

  • (b) the person may make such representations in writing to the Minister within the time aforesaid, and

  • (c) the Minister shall, before deciding to give or withhold his consent, consider any representations duly made to him under this subsection in relation to the proposed refusal.”.

• (2) Section 10 (4) of the Act of 1971 shall stand repealed with effect from the coming into operation of subsection (1) (a).

33 Amendment of section 10 of Act of 1971.

33.—Section 10 of the Act of 1971 is hereby amended by the substitution of the following paragraph for paragraph (c) of subsection (3):

• “(c) the Bank shall, before deciding to impose the condition or amend or add to the conditions of the licence, as the case may be, consider any representations duly made to it under this subsection in relation to the imposition, amendment or addition, as the case may be, and where, after so considering, the Bank decides on an imposition, amendment or addition, as the case may be, that differs from that specified in the notification concerned, it shall not be necessary to give a new notification under this subsection if the difference results in the condition concerned being no more onerous than would be the case had the Bank decided to impose the condition or amend or add to the conditions of the licence, as the case may be, in accordance with the notification concerned.”.

34 Revocation of licences.

34.—The Act of 1971 is hereby amended by the substitution of the following section for section 11:

“11. (1) The Bank may—

• (a) revoke a licence if the holder of the licence so requests,

• (b) with the consent of the Minister, revoke a licence if the holder of the licence—

  • (i) (I) has not commenced to carry on banking business within twelve months of the date on which the licence was granted, or

    • (II) has ceased to carry on banking business and has not carried it on during a period of more than six months immediately following the cesser,

  • (ii) being a company, is being wound up,

  • (iii) is a credit institution to which section 9 (IA) (b) of this Act (as amended by the Central Bank Act, 1989) relates, which is being duly wound up or otherwise dissolved,

  • (iv) has obtained the licence through false statements or any other irregular means,

  • (v) becomes unable to meet his obligations to his creditors or suspends payments lawfully due by him or no longer possesses sufficient own funds (being own funds to which Council Directive 77/780/EEC of 12 December, 1977, relates) or can no longer be relied upon to fulfil his obligations towards his creditors, and in particular no longer provides security for the assets entrusted to him,

  • (vi) fails to maintain a deposit in the Bank of an amount determined in accordance with section 55 of the Central Bank Act, 1989,

  • (vii) is convicted on indictment of an offence under any provision of this Act or an offence involving fraud, dishonesty or breach of trust,

  • (viii) has his head office in another state that is a member of the European Communities and the authority in that state that exercises in that state functions corresponding to those of the Bank under this Chapter has withdrawn authorisation from the institution of which the holder is a branch,

• (c) with the consent of the Minister, revoke the licence if, since the grant of the licence, the circumstances relevant to the grant have changed and are such that, if an application for a licence were made in the changed circumstances, it would be refused.

• (2) Whenever the Bank proposes to revoke a licence (other than in circumstances to which paragraph (a) or (b) (viii) of subsection (1) of this section relate)—

  • (a) it shall notify the holder in writing that it intends to seek the consent of the Minister to the revocation and of the reasons for the revocation and that the holder may, within twenty-one days after the date of the giving of the notification, make representations in writing to the Minister in relation to the proposed revocation,

  • (b) the holder may make such representations in writing to the Minister within the time aforesaid, and

  • (c) the Minister shall, before deciding to give or withhold his consent, consider any representations duly made to him under this subsection in relation to the proposed revocation.

• (3) Where a licence is revoked and the person who was the holder of the licence is not a company which is being wound up—

  • (a) that person shall continue to be subject to the duties and obligations imposed on him by or under the Central Bank Acts, 1942 to 1989, until all liabilities of that person in respect of deposits (including deposits on current accounts) or other repayable funds accepted by him from persons (in this subsection referred to as depositors) have been discharged to the satisfaction of the Bank,

  • (b) that person shall, as soon as possible after the licence is revoked—

    • (i) notify the Bank and

    • (ii) as far as is reasonably practicable, notify every depositor concerned,

    of the measures he is taking or proposes to take to discharge in full and without undue delay his liabilities in respect of those deposits,

  • (c) in the case where—

    • (i) that person has notified the Bank in accordance with paragraph (b) of this subsection and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

    • (ii) that person has not so notified the Bank and the Bank is of the opinion that he has failed to so notify as soon as possible after the licence is revoked, or

    • (iii) the Bank is of the opinion that that person has not taken all reasonable steps to so notify every depositor concerned,

    then the Bank may give a direction in writing to that person for such period, not exceeding six months, as may be specified therein, prohibiting him from—

    - (I) dealing with or disposing of any of his assets or specified assets in any manner, or
    
    - (II) engaging in any transaction or class of transaction or specified transaction, or
    
    - (III) making payments,
    
      without the prior authorisation of the Bank, and the Bank may require that person to prepare and submit to it for its approval within two months of the direction, a scheme for the orderly discharge in full of his liabilities to the depositors concerned,
    

  • (d) where a direction to which this subsection relates is given the provisions of section 21 of this Act shall apply with any necessary modifications.

• (4)

  • (a) Where a licence is revoked and the holder of the licence is a company which is being wound up, the liquidator of the company shall, in addition to his duties and obligations in respect of the winding up, be subject to the duties and obligations to which the company would be subject were it a company to which subsection (3) of this section relates and that subsection shall, for the purposes of this subsection, be construed accordingly.

  • (b) Notwithstanding paragraph (a) of this subsection, the Bank may, where it revokes a licence and considers it appropriate in the circumstances, remove in writing the duty and obligation imposed on the liquidator concerned to comply with paragraph (b) (as construed by this subsection) of subsection (3) of this section and may impose in writing on that liquidator such further or other duty and obligation which corresponds to that set out in the said paragraph (b).

• (5) If the holder of a licence—

  • (a) has his head office in another state that is a member of the European Communities, or

  • (b) carries on banking business through a branch established in another such state,

  the Bank shall, before deciding to revoke the licence, consult with the authority in that state that exercises in that state functions corresponding to those of the Bank under this Part:

  Provided however that if immediate action by the Bank is called for it shall not be necessary for the Bank to consult as aforesaid but in such a case the Bank shall notify the authority concerned of the revocation of the licence.”.

35 Amendment of section 12 of Act of 1971.

35.—Section 12 of the Act of 1971 is hereby amended by the substitution of the following subsection for subsection (3):

• “(3) The Bank shall keep each of the following informed of the names of the holders of licences, that is to say:

  • (a) the Commission of the European Communities;

  • (b) the Registrar of the Supreme Court;

  • (c) the officer for the time being managing the Central Office of the High Court;

  • (d) every County Registrar;

  • (e) every District Court Clerk.”.

36 Provisions in relation to books and records of holders of licences.

36.—The Act of 1971 is hereby amended by the substitution of the following section for section 17:

“17.—(1) A holder of a licence shall keep at an office or offices within the State such books and records (including accounts) as may be specified from time to time by the Bank in the due discharge by the Bank of its statutory functions and shall notify the Bank of the address of every office at which any such book or record is kept for the purposes of this subsection.

• (2) Different books and records may be specified by the Bank for the purposes of this section in relation to different holders of licences.

• (3)

  • (a) An appropriate person duly authorised in writing in that behalf by the Governor of the Bank (in this subsection referred to as ‘an authorised person’) may, for the purpose of the performance by the Bank of its statutory functions and upon production of his authorisation, at all reasonable times, inspect and take copies of or extracts from, and make such enquiries as he may consider necessary in relation to—

    • (i) the books and records kept pursuant to this section by the holder of a licence, and

    • (ii) any books of account relating to the said holder and kept under the Companies Act, 1963, or under any enactment which is to be construed together as one with that Act, and

    • (iii) any other documents relating to the business of the said holder,

    and for those purposes enter any office to which subsection (1) of this section relates and any other place where he reasonably believes any books, records or other documents as aforesaid are kept.

  • (b) A person who has in his power, possession or procurement any books, records or other documents aforesaid shall—

    • (i) produce them at the request of an authorised person and permit him to inspect and take copies of or extracts from them,

    • (ii) at the request of an authorised person, give any information which may be reasonably required with regard to them, and

    • (iii) give such other assistance and information to an authorised person as is reasonable in the circumstances.

  • (c) The provisions of paragraphs (a) and (b) of this subsection shall apply to every holder of a licence and the provisions of those paragraphs, other than subparagraph (i) of paragraph (a), shall apply to—

    • (i) every associated enterprise of the holder, and

    • (ii) any other person,

    where an inspection of the books, records or other documents is, in the opinion of the Bank, materially relevant to the proper appraisal of the business of a holder of a licence during any period in respect of which an inspection or proposed inspection of the holder relates.

• (4) Books and records kept pursuant to this section shall—

  • (a) be in addition to any books or other records to be kept by or under any other enactment, and

  • (b) be retained for at least such period as the Bank may specify in respect of any such book or record.

• (5) Where any person from whom production of a book, record or other document is required claims a lien thereon, the production of it shall be without prejudice to the lien.

• (6) Nothing in this section shall compel the production by a barrister or solicitor of a book, record or other document containing a privileged communication made by him or to him in that capacity or the furnishing of information contained in a privileged communication so made.

• (7)

  • (a) In this section—

  ‘appropriate person’ means—

  - (i) an officer of the Bank, or
  
  - (ii) in relation to any particular inspection (including a proposed inspection), any other person who in the opinion of the Governor of the Bank possesses appropriate qualifications or experience to carry out the inspection, or any part thereof, to which this section relates;
  
    ‘associated enterprise’ means (where appropriate)—
  
  - (i) a holding company of the holder of a licence,
  
  - (ii) a subsidiary company of the holder of a licence,
  
  - (iii) a company which is a subsidiary of a body corporate, where the holder of the licence concerned is also a subsidiary of the body corporate, but neither company is a subsidiary of the other,
  
  - (iv) where a company is the holder of a licence, any other body corporate that is not a subsidiary of the company but in respect of which the company is beneficially entitled to more than 20 per cent. in nominal value of either the allotted share capital or of the shares carrying voting rights (other than voting rights which arise only in specified circumstances) in that other body corporate,
  
  - (v) a partnership in which the holder of a licence has an interest, and whose business is or, at the relevant time, was, in the opinion of the Bank, materially relevant to any inspection of the holder being carried out or proposed to be carried out under this section;
  
    ‘holding company’ has the meaning given to it by section 155 of the Companies Act, 1963;
  
    ‘statutory functions’, in relation to the Bank, means its functions—
  
  - (i) under the *Central Bank Acts, 1942 to 1989*, and any other enactment amending those Acts, or
  
  - (ii) imposed by virtue of the European Communities (Consolidated Supervision of Banks) Regulations, 1985 (S.I. No. 302 of 1985), and Council Directive No. 85/354/EEC <sup>(1)</sup> of 13 June, 1983;
  
    ‘subsidiary company’ has the meaning given to it by section 155 of the Companies Act, 1963.
  

  • (b) References in this section to books, records or other documents, or to any of them, shall be construed as including any document or information kept in a non-legible form (by the use of electronics or otherwise) which is capable of being reproduced in a legible form and all the electronic or other automatic means, if any, by which such document or information is so capable of being reproduced to which the person, whose books, records or other documents (as so construed) are inspected for the purposes of this section, has access.”.

37 Furnishing of information to Bank.

37.—The Act of 1971 is hereby amended by the substitution of the following section for section 18: ⁽¹⁾

“18. (1) A holder of a licence and any person carrying on a business—

• (a) of an associated enterprise to which subsection (3) of this section relates,

• (b) in respect of which that person is, by virtue of section 7 (4) (a) (ii) of this Act, exempted from the obligation to hold a licence,

• (c) as an investment trust company,

• (d) as a moneybroker,

• (e) as a financial intermediary, or

• (f) of issuing, holding or otherwise participating in any market in financial instruments including those to which Chapter VIII of the Central Bank Act, 1989, applies;

shall each furnish the Bank—

- (i) at such times as the Bank may specify from time to time, such information and returns concerning the business to which the licence relates or the carrying on of a business as aforesaid by such person, as the case may be, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions;

- (ii) within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (i) of this subsection) concerning the business to which the licence relates or the carrying on of a business as aforesaid by such person, as the case may be, that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions.

• (2) A person shall not furnish information or returns under this section which he knows to be false.

• (3) Subsections (1) and (2) of this section shall apply to the business of an associated enterprise to the extent only that the information and returns sought by the Bank are, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the holder of the licence to which the associated enterprise relates.

• (4) In this section:

‘>associated enterprise’ has the same meaning as it has in section 17 of this Act;

‘information and returns’ and ‘information or returns’ includes audited accounts, audited group accounts and any other documents which are equivalent or correspond to such audited accounts or audited group accounts;

‘moneybroker’ has the meaning assigned to it by section 108 of the Central Bank Act, 1989, for the purposes of Chapter IX of that Act.”.

38 Directions by Bank to holders of licences.

38.—The Act of 1971 is hereby amended by the substitution of the following section for section 21: