Central Bank and Financial Services Authority of Ireland Act 2003

PART 1 Preliminary

1. Short title and commencement.

1.—(1) This Act may be cited as the Central Bank and Financial Services Authority of Ireland Act 2003.

(2) This Act comes into operation on such day or days as may be fixed by an order or orders made by the Minister for Finance, either generally or with reference to any particular purpose or provision. Different days may be fixed for different purposes and different provisions.

PART 2 Amendment of Central Bank Act 1942

2. Interpretation:

2.—In this Part, “the Principal Act” means the Central Bank Act 1942.

3. Substitution of section 2 of the Principal Act.

3.—The Principal Act is amended by substituting the following section for section 2:

“Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

‘Appeals Tribunal’ means the Irish Financial

Services Appeals Tribunal established by section 57C;

‘appointed Director’ means a Director referred to in section 18B(1)(f);

‘approved stock exchange’ means a stock exchange approved under section 9 of the Stock Exchange Act 1995;

‘Bank’ means the Central Bank and Financial Services Authority of Ireland;

‘Board’ means the Board of Directors of the Bank;

‘Central Bank Acts’ means the Central Bank Acts 1942 to 1998 and includes any later Act that is to be construed as one with those or any of those Acts;

‘Chief Executive’ means the person holding office or acting as Chief Executive of the Regulatory Authority;

‘consolidated bank note’ has the same meaning as in the Currency Act 1927;

‘constituent part’, in relation to the Bank, means the Regulatory Authority, or any division, branch or office that forms part of the Bank, and includes any committee of the Board of the Bank;

‘Consumer Director’ means the person holding office or acting as Consumer Director of the Regulatory Authority;

‘credit union’ has the meaning given by the Credit Union Act 1997;

‘Currency Act 1927’ means that Act as adapted in consequence of the Constitution;

‘designated enactments’ means the enactments specified in Part 1 of Schedule 2;

‘designated statutory instruments’ means the statutory instruments specified in Part 2 of Schedule 2;

‘Director’ means a Director of the Bank;

‘employee’, in relation to the Bank, includes the Secretary to the Bank;

‘enactment’ includes any instrument made under an enactment;

‘ESCB Statute’ means the Statute of the European System of Central Banks and of the European Central Bank as set out in Protocol (No. 3) (annexed by the Treaty on European Union done at Maastricht on February 1992) to the Rome Treaty;

‘financial futures and options exchange’ has the meaning given by section 97 of the Central Bank Act 1989;

‘financial services’ include financial products;

‘financial year’ means a period of 12 months ending on 31 December or, if the Minister, by order notified in Iris Oifigiúil, has prescribed a different period for the purposes of this Act, that other period;

‘function’ includes duty;

‘general fund’ means the general fund kept by the Bank under section 6G;

‘Governor’ means the person holding office as the Governor of the Bank, and includes—

(a) any person appointed to act as Governor in accordance with section 22, and

(b) the Director General of the Bank when carrying out responsibilities of the Governor in accordance with section 22A;

‘law’ includes the Rome Treaty and the ESCB Statute;

‘local authority’ means a local authority for the purposes of the Local Government Act 2001;

‘Minister’ means the Minister for Finance;

‘officer’, in relation to the Regulatory Authority, means the Chief Executive, the Consumer Director or the Registrar of Credit Unions;

‘official Director’ means a person who is a Director by virtue of being the holder of a specified office, and includes the Governor;

‘power’ includes right and privilege;

‘record’ means any record of information, however compiled, recorded or stored, and includes—

(a) any book, a register and any other document containing information, and

(b) any disc, tape or other article from which information is capable of being produced in any form capable of being reproduced visually or aurally;

‘the regulations’ means regulations made by the Minister under section 61A and in force under this Act;

‘Regulatory Authority’ means the Irish Financial Services Regulatory Authority established by section 33B;

‘Rome Treaty’ means the Treaty establishing the European Community done at Rome on 25 March 1957, as amended by the Treaty on European Union done at Maastricht on 7 February 1992.

(2) In this Act—

(a) a reference to an enactment is, unless the context otherwise requires, a reference to that enactment as amended or extended by or under any subsequent enactment (including this Act), and

(b) a reference to a section is a reference to a section of this Act unless it is indicated that a reference to some other enactment is intended, and

(c) a reference to a subsection, paragraph or subparagraph is a reference to the subsection, paragraph or subparagraph of the provision in which the reference occurs, unless it is indicated that reference to some other provision is intended.

(3) A function or responsibility imposed, or a power conferred, on a person by a provision of this Act is not to be taken to be limited merely by implication from another provision, whether of this or any other Act, that imposes a function or responsibility, or confers a power, on that person.”.

4. Substitution of section 5 of the Principal Act.

4.—The Principal Act is amended by substituting the following section for section 5:

“Constitution, functions and powers of the Bank

Constitution of Bank.

5.—(1) The body corporate formerly called ‘Banc Ceannais na hÉireann’ in Irish and the ‘Central Bank of Ireland’ in English is continued, but with the corporate name of ‘Banc Ceannais agus Údarás Seirbhísí Airgeadais na hÉireann’ in Irish and the ‘Central Bank and Financial Services Authority of Ireland’ in English.

(2) The Bank—

(a) has perpetual succession, and

(b) may take legal proceedings and be proceeded against in its corporate name.

(3) The Bank is required to have a seal. The seal is to be judicially noticed.

(4) Except as expressly provided by this Act, the affairs and activities of the Bank are to be managed and controlled by the Board of Directors of the Bank.”.

5. Substitution of section 5A of the Principal Act.

5.—The Principal Act is amended by substituting the following sections for section 5A (as inserted by section 4 of the Central Bank Act 1998):

“General functions and powers of the Bank.

5A.—(1) The Bank has the following functions:

(a) to carry out the efficient and effective co-ordination of—

(i) the activities of the constituent parts of the Bank, and

(ii) activities undertaken by any of those parts with persons who provide services to, or receive services from, the Bank, and

(iii) the exchange of information among those parts and between any of those parts and any of those persons;

(b) to promote the development within the State of the financial services industry (but in such a way as not to affect the objective of the Bank in contributing to the stability of the State's financial system);

(c) where appropriate, to represent and co-ordinate the representation of the Bank on international financial bodies and at international meetings relating to financial or economic matters;

(d) to establish and maintain, either directly or indirectly, contact with the monetary authorities established in other countries and in territories;

(e) whenever it thinks fit, to provide to governments of, and financial institutions and other bodies established in, other countries and in territories advice or other assistance on matters within its expertise and, when appropriate, to co-ordinate application of the resources of its constituent parts for that purpose;

(f) to provide banking services to its constituent parts;

(g) to provide for the collection and study of data that deal with monetary and credit problems and to publish information about that data;

(h) to provide advice and assistance to the Central Statistics Office about the collection, compilation, analysis and interpretation of statistics relating to the balance of payments, national accounts and other financial statistics and, where appropriate, to collect data for that purpose;

(i) to perform such other functions as are imposed on it by or under this and any other Act or law.

(2) The Bank has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions.

(3) In particular, the powers of the Bank include powers of a kind that, in accordance with normal banking practice, may be exercised by a bank.

(4) The Bank is required to perform its functions and exercise its powers in a manner consistent with the Rome Treaty and the ESCB Statute.

(5) The Bank can perform its functions and exercise its powers both within the State and elsewhere.

Specific powers of the Bank.

5B.—Without limiting section 5A, the powers of the Bank include power to do all or any of the following:

(a) subject to paragraph (b), acquire, hold, dispose of or otherwise deal in all kinds of property (including real property, securities, coins, gold or silver bullion and other precious metals, and any kinds of currency or currency units);

(b) acquire, hold or dispose of shares in a bank or other institution formed wholly or mainly by banks that are the principal currency authority in their respective countries, but only with the approval of the Minister;

(c) enter into, carry out, assign or accept the assignment of, vary or rescind, any contract, agreement or other obligation;

(d) provide loans and other kinds of financial accommodation to credit institutions and other persons on the security of such assets and on such terms and conditions as the Board considers appropriate;

(e) give guarantees and make payments under them;

(f) receive funds on deposit;

(g) open accounts in other countries or act as agent, depository, or correspondent of any credit institution carrying on business in or outside the State;

(h) re-discount exchequer notes or bills, local authority bills, bills of exchange and promissory notes on such terms and conditions as the Board considers appropriate;

(i) keep registers of securities generally;

(j) operate or participate in a depository of securities or other instruments;

(k) keep the accounts for the clearing and settlement of securities or payment instruments;

(l) become a member of, or a party to, the establishment or operation of one or more payment systems;

(m) operate or participate in a system that provides a settlement service for transactions in securities or other instruments for its members;

(n) enter into agreements with depositories of securities or of other instruments, and carry out transactions under the terms of those agreements so far as necessary for the settlement of transactions between members of those depositories and the members of any depository operated by the Bank;

(o) transfer assets, income or liabilities to the European Central Bank where required under the ESCB Statute.”.

6. Substitution of section 6 of the Principal Act.

6.—The Principal Act is amended by substituting the following section for section 6 (as substituted by section 5 of the Central Bank Act 1998):

“Bank to perform functions of European System of Central Banks.

6.—(1) The Bank shall perform all functions imposed, and exercise all powers conferred, on the Bank by or under the Rome Treaty or the ESCB Statute.

(2) This section is subject to section 19A.

(3) Section 9 of the Ministers and Secretaries Act 1924 does not apply to the Bank.”.

7. Insertion into the Principal Act of new sections 6A to 6K.

7.—The Principal Act is amended by inserting the following sections after section 6 (as substituted by section 6):

“Objectives of Bank in discharging ESCB functions, etc.

6A.—(1) In discharging its functions and exercising its powers as part of the European System of Central Banks, the primary objective of the Bank is to maintain price stability.

(2) The Bank also has the following objectives:

(a) contributing to the stability of the financial system;

(b) promoting the efficient and effective operation of payment and settlement systems; and

(c) discharging such other functions and powers as are conferred or imposed on it by the Rome Treaty, the ESCB Statute or any enactment.

(3) The Minister may, from time to time, request the Governor, the Board or the Regulatory Authority to consult with the Minister, in relation to their respective functions, as regards the performance by the Bank of any function of the Bank (other than one imposed on it by the Rome Treaty or the ESCB Statute).

(4) The Minister may, from time to time, request the Governor to inform the Minister with respect to the pursuit of the primary objective of the Bank.

(5) The Governor, or the Board, shall comply with a request made to the Governor or the Board under this section in so far as the request is consistent with the Rome Treaty, the ESCB Statute or any law of the State.

(6) Without prejudice to the objective of maintaining price stability, the Bank is required to support the general economic policies of the European Union with a view to contributing to the achievement of the objectives of that Union as laid down in Article 2 of the Rome Treaty.

Offices of the Bank.

6B.—Where the Board considers—

(a) that it is necessary for the purpose of the due performance by the Bank of its functions, the Board may build, purchase, lease or otherwise acquire, establish, equip and maintain offices and other premises of the Bank in such places, whether in the State or elsewhere, or

(b) that it is no longer necessary for that purpose, sell or let any such premises.

Power of the Bank to establish divisions, etc. within the Bank.

6C.—(1) The Bank may, from time to time, establish divisions, branches or offices as part of the Bank's structure.

(2) The Board is responsible for administering the staff of the Bank and its constituent parts and for administering the provision of accommodation and office and other equipment with a view to enabling the Bank and its constituent parts to perform and exercise their respective functions and powers.

Staff of Bank.

6D.—(1) Subject to this section, the Board shall appoint a Secretary to the Bank and such other employees of the Bank as it considers necessary for the effective performance and exercise of the functions and powers of the Bank and each of its constituent parts.

(2) The Regulatory Authority shall appoint a Secretary to that Authority.

(3) Except as regards the appointment of a Secretary to the Bank and the Secretary to the Regulatory Authority—

(a) the Governor has the same power to appoint employees of the Bank as the Board has under subsection (1), but that power is only exercisable in respect of responsibilities specified in section 19A(1)(a) and (b) and (2),

(b) the Chief Executive has the same power to appoint employees of the Bank as the Board has under subsection (1), but that power is only exercisable with the agreement of the Regulatory Authority.

(4) The Secretary to the Regulatory Authority and employees appointed under subsection (3) are taken, for the purposes of this Act, to have been appointed under subsection (1).

(5) The employees of the Bank are to be employed on such conditions (including conditions as to remuneration and allowances) as the Board fixes from time to time. However, in fixing the conditions of employment of the Secretary to the Regulatory Authority and employees appointed by the Chief Executive under subsection (3), the Board shall obtain the concurrence of the Regulatory Authority or Chief Executive (as the case requires) with respect to those conditions of employment.

(6) Subject to subsection (8), an appointment under this section is to be made by competition to be conducted in accordance with rules made by the Board.

(7) The Board may, in relation to a particular competition, impose conditions of entry, limitations and safeguards. If the competition relates to an appointment to be made under subsection (2) or (3), the Board may impose such conditions only with the concurrence of the Regulatory Authority or the Chief Executive, as the case requires.

(8) Subsection (6) does not apply to an appointment to a position if the Board, or, in relation to appointments under subsection (2) or (3), if the Regulatory Authority or Chief Executive (as the case requires), decides that appointment to the position by competition would be inappropriate.

(9) The Board shall establish and operate a policy under which provision is made for employees of the Bank to be given opportunities for training and experience in various activities, and in different constituent parts, of the Bank.

Assignment of employees of Bank.

6E.—The Board shall arrange for employees of the Bank to be assigned to the Regulatory Authority and to any divisions, branches or offices established under section 6C. However, any assignment of an employee to or from the Regulatory Authority shall take place only with the agreement of the Chief Executive.

Bank may engage agents and act as agent for others.

6F.—The Bank may engage agents, and act as agent for other persons.

Financial and administrative matters

General fund of the Bank.

6G.—(1) The Bank shall continue to keep and operate the fund called the general fund.

(2) The Bank shall pay into the general fund all money received by the Bank and shall pay from that fund all amounts that it is required to pay.

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

(4) The expenses incurred by the Bank in performing functions or exercising powers under this or any other Act or law are payable out of the general fund of the Bank, except where otherwise provided by or under this or any other Act.

(5) Any claims on or liabilities to the European Central Bank are to be treated as assets or liabilities of the general fund or any other fund established by order made by the Minister for that purpose.