LegalizeCentral Bank and Financial Services Authority of Ireland Act 2004
This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.
1 amending act · 2017-07-26, Financial Services and Pensions Ombudsman Act 2017
Act to amend the Central Bank Act 1942 for the purposes of providing for the establishment and functions of the regulatory authority sanctions panel, establishing the financial services ombudsman's bureau and prescribing the functions and powers of that ombudsman, providing for the establishment of consultative panels to advise the Irish Financial Services Regulatory Authority on certain matters; to amend the Central Bank Act 1997 for the purposes of making further provision for auditing the accounts of financial service providers and providing for the regulation of money transmission businesses; and to make miscellaneous amendments to certain other acts and statutory instruments relating to the provision of financial services
| Item | Provision affected or inserted | Amendment | Amendment |
| 1. | Section 2 | (a) In subsection (1), insert the following definition after the definition of “Act of 1995”: | (a) In subsection (1), insert the following definition after the definition of “Act of 1995”: |
| “ ‘administration’, in relation to a collective investment scheme, includes (but is not limited to)— | “ ‘administration’, in relation to a collective investment scheme, includes (but is not limited to)— | ||
| (a) performing a valuation service, and | (a) performing a valuation service, and | ||
| (b) performing a fund accounting service, and | (b) performing a fund accounting service, and | ||
| (c) acting as a transfer agent, and | (c) acting as a transfer agent, and | ||
| (d) acting as a registration agent;”; | (d) acting as a registration agent;”; | ||
| (b) in subsection (1), substitute the following definition for the definition of “administrator”: | (b) in subsection (1), substitute the following definition for the definition of “administrator”: | ||
| “ ‘administrator’, in relation to an investment firm, means an administrator of the firm appointed under section 33 or 33A;”; | “ ‘administrator’, in relation to an investment firm, means an administrator of the firm appointed under section 33 or 33A;”; | ||
| (c) in subsection (1), insert the following definition after the definition of “close relative”: | (c) in subsection (1), insert the following definition after the definition of “close relative”: | ||
| “ ‘Companies Acts’ means the Companies Act 1963 as amended from time to time, and includes all Acts that are to be construed together with that Act as one Act;”; | “ ‘Companies Acts’ means the Companies Act 1963 as amended from time to time, and includes all Acts that are to be construed together with that Act as one Act;”; | ||
| (d) in subsection (1), insert the following definition after the definition of “Minister”: | (d) in subsection (1), insert the following definition after the definition of “Minister”: | ||
| “ ‘operator’, in relation to an investor compensation scheme approved under section 25, means the person responsible for operating the scheme;”; | “ ‘operator’, in relation to an investor compensation scheme approved under section 25, means the person responsible for operating the scheme;”; | ||
| (e) substitute the following subsection for subsection (5): | (e) substitute the following subsection for subsection (5): | ||
| “(5) Despite subsection (1), a firm is not an authorised investment business firm, or authorised as such, for the purposes of this Act if— | “(5) Despite subsection (1), a firm is not an authorised investment business firm, or authorised as such, for the purposes of this Act if— | ||
| (a) the firm is not an investment firm within the meaning of the Investor Compensation Directive, and | (a) the firm is not an investment firm within the meaning of the Investor Compensation Directive, and | ||
| (b) the only activity that the firm is authorised to carry on under the Investment Intermediaries Act 1995 is either administering collective investment schemes or undertaking custodial responsibilities involving the safekeeping and administration of investment instruments of or relating to such schemes.”. | (b) the only activity that the firm is authorised to carry on under the Investment Intermediaries Act 1995 is either administering collective investment schemes or undertaking custodial responsibilities involving the safekeeping and administration of investment instruments of or relating to such schemes.”. | ||
| 2. | Section 9 | In subsection (4)(c), substitute the following subparagraph for subparagraph (iii): | In subsection (4)(c), substitute the following subparagraph for subparagraph (iii): |
| “(iii) an authorised officer appointed under section 17A of the Central Bank Act 1971, or”. | “(iii) an authorised officer appointed under section 17A of the Central Bank Act 1971, or”. | ||
| 3. | Section 19 | In subsection (3), insert “the operator of” after “by”. | In subsection (3), insert “the operator of” after “by”. |
| 4. | Section 20 | Insert the following subsections after subsection (2): | Insert the following subsections after subsection (2): |
| “(3) The Company is responsible only for the expenses of an administrator that are properly incurred in the course of performing the administrator's functions under this Act. | “(3) The Company is responsible only for the expenses of an administrator that are properly incurred in the course of performing the administrator's functions under this Act. | ||
| (4) The Company is not responsible for expenses that an administrator of an investment firm incurs in respect of functions that the administrator performs contemporaneously with functions that the administrator performs as liquidator of the firm. It makes no difference that the functions performed as liquidator also relate to the performance of functions as administrator of the firm.”. | (4) The Company is not responsible for expenses that an administrator of an investment firm incurs in respect of functions that the administrator performs contemporaneously with functions that the administrator performs as liquidator of the firm. It makes no difference that the functions performed as liquidator also relate to the performance of functions as administrator of the firm.”. | ||
| 5. | Section 21 | In subsection (3)(b), substitute “Investor Compensation Directive” for “Investment Services Directive”. | In subsection (3)(b), substitute “Investor Compensation Directive” for “Investment Services Directive”. |
| 6. | Section 25 | In subsection (6), substitute the following paragraph for paragraph (c): | In subsection (6), substitute the following paragraph for paragraph (c): |
| “(c) as to the probity and competence of each of the directors and other persons concerned in the management of the proposed scheme,”. | “(c) as to the probity and competence of each of the directors and other persons concerned in the management of the proposed scheme,”. | ||
| 7. | Section 27 | In subsection (3)(a), insert “the operator of” after “the Company or to”. | In subsection (3)(a), insert “the operator of” after “the Company or to”. |
| 8. | Section 32 | (a) In subsection (1), substitute “the operator of” for “the person responsible for administering”; | (a) In subsection (1), substitute “the operator of” for “the person responsible for administering”; |
| (b) in subsection (1)(b), substitute the following paragraph for paragraph (b): | (b) in subsection (1)(b), substitute the following paragraph for paragraph (b): | ||
| “(b) a court has made a ruling (other than a decision under the Companies Acts appointing an examiner or provisional liquidator),”; | “(b) a court has made a ruling (other than a decision under the Companies Acts appointing an examiner or provisional liquidator),”; | ||
| (c) substitute the following subsection for subsection (2): | (c) substitute the following subsection for subsection (2): | ||
| “(2) If the supervisory authority is satisfied that an investor was, for good reason, unable to make an application for a payment under section 34 within the period stipulated by the Company, or by the operator of the compensation scheme, the supervisory authority shall direct the Company or operator to treat the application as if it were made within the stipulated period.”. | “(2) If the supervisory authority is satisfied that an investor was, for good reason, unable to make an application for a payment under section 34 within the period stipulated by the Company, or by the operator of the compensation scheme, the supervisory authority shall direct the Company or operator to treat the application as if it were made within the stipulated period.”. | ||
| 9. | Section 33 | (a) Insert the following subsection after subsection (1): | (a) Insert the following subsection after subsection (1): |
| “(1A) The supervisory authority may appoint an administrator under subsection (1) only with the agreement of the Company.”. | “(1A) The supervisory authority may appoint an administrator under subsection (1) only with the agreement of the Company.”. | ||
| (b) Substitute the following subsections for subsection (3): | (b) Substitute the following subsections for subsection (3): | ||
| “(3) The administrator shall deliver to the Company, or, where appropriate, to the operator of the compensation scheme concerned— | “(3) The administrator shall deliver to the Company, or, where appropriate, to the operator of the compensation scheme concerned— | ||
| (a) a statement, or | (a) a statement, or | ||
| (b) if an interim statement is delivered under subsection (3B), a final statement, | (b) if an interim statement is delivered under subsection (3B), a final statement, | ||
| specifying the names of eligible investors and the net loss (if any) and the compensatable loss (if any) of each of those investors. | specifying the names of eligible investors and the net loss (if any) and the compensatable loss (if any) of each of those investors. | ||
| (3A) As a prelude to complying with subsection (3), the administrator may, if the Company or the operator of the relevant compensation scheme so agrees, deliver an interim statement specifying names of eligible investors and the estimated net losses (if any) and the estimated compensatable loss (if any) of each of those investors. | (3A) As a prelude to complying with subsection (3), the administrator may, if the Company or the operator of the relevant compensation scheme so agrees, deliver an interim statement specifying names of eligible investors and the estimated net losses (if any) and the estimated compensatable loss (if any) of each of those investors. | ||
| (3B) On, or as soon as practicable after, delivering a statement in accordance with subsection (3) or (3A), the administrator shall deliver a copy of the statement to the supervisory authority.”. | (3B) On, or as soon as practicable after, delivering a statement in accordance with subsection (3) or (3A), the administrator shall deliver a copy of the statement to the supervisory authority.”. | ||
| 10. | Section 33A | Insert the following section after section 33: | Insert the following section after section 33: |
| “Appointment of liquidator or official assignee as administrator. | 33A.—If the Court has appointed a liquidator or the official assignee in respect of an investment firm, it may also appoint the liquidator or official assignee as administrator of the firm, but only as a result of a proposal made by the supervisory authority with the agreement of the Company.”. | ||
| 11. | Section 34 | (a) In subsection (2), substitute “the operator of the compensation scheme” for “that compensation scheme”; | (a) In subsection (2), substitute “the operator of the compensation scheme” for “that compensation scheme”; |
| (b) substitute the following subsection for subsection (3): | (b) substitute the following subsection for subsection (3): | ||
| “(3) If the administrator has delivered an interim statement in accordance with section 33(3A), the Company or operator of the compensation scheme concerned may make provisional compensation payments under this section on the basis of that statement. If, in relation to an eligible investor, the amount of compensation paid on the basis of that statement is less than that specified in the final statement delivered in accordance with section 33(3), the Company or operator of the compensation scheme concerned shall make a further compensation payment to the investor in respect of the outstanding balance.”; | “(3) If the administrator has delivered an interim statement in accordance with section 33(3A), the Company or operator of the compensation scheme concerned may make provisional compensation payments under this section on the basis of that statement. If, in relation to an eligible investor, the amount of compensation paid on the basis of that statement is less than that specified in the final statement delivered in accordance with section 33(3), the Company or operator of the compensation scheme concerned shall make a further compensation payment to the investor in respect of the outstanding balance.”; | ||
| (c) in subsection (4), substitute “the operator of the compensation scheme” for “the relevant compensation scheme”; | (c) in subsection (4), substitute “the operator of the compensation scheme” for “the relevant compensation scheme”; | ||
| (d) in subsection (5), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; | (d) in subsection (5), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; | ||
| (e) insert the following subsection after subsection (7): | (e) insert the following subsection after subsection (7): | ||
| “(8) The Company or the operator of the compensation scheme concerned may appeal to the Court against a statement of compensatable loss delivered in accordance with section 33(3) or 33(3A) on the ground that the loss has not been properly calculated in accordance with section 30. However, the right conferred by this subsection may be exercised only after consultation with the supervisory authority.”. | “(8) The Company or the operator of the compensation scheme concerned may appeal to the Court against a statement of compensatable loss delivered in accordance with section 33(3) or 33(3A) on the ground that the loss has not been properly calculated in accordance with section 30. However, the right conferred by this subsection may be exercised only after consultation with the supervisory authority.”. | ||
| 12. | Section 35 | (a) In subsection (1), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; | (a) In subsection (1), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; |
| (b) In subsection (1), substitute “the Company or operator” for “the Company or compensation scheme”; | (b) In subsection (1), substitute “the Company or operator” for “the Company or compensation scheme”; | ||
| (c) In subsection (2)(a), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; | (c) In subsection (2)(a), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”; | ||
| (d) in subsection (5), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”; | (d) in subsection (5), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”; | ||
| (e) in subsection (5), substitute “the Company or operator” for “the company or compensation scheme”; | (e) in subsection (5), substitute “the Company or operator” for “the company or compensation scheme”; | ||
| (f) insert the following subsection after subsection (5): | (f) insert the following subsection after subsection (5): | ||
| “(5A) If— | “(5A) If— | ||
| (a) an eligible investor proves a claim in the liquidation proceedings referred to in subsection (5), and | (a) an eligible investor proves a claim in the liquidation proceedings referred to in subsection (5), and | ||
| (b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25, | (b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25, | ||
| the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”. | the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”. | ||
| (g) in subsection (6), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”; | (g) in subsection (6), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”; | ||
| (h) in subsection (6), substitute “the Company or operator” for “the company or compensation scheme”; | (h) in subsection (6), substitute “the Company or operator” for “the company or compensation scheme”; | ||
| (i) insert the following subsection after subsection (6): | (i) insert the following subsection after subsection (6): | ||
| “(6A) If— | “(6A) If— | ||
| (a) an eligible investor proves a claim under a bond or policy of professional indemnity insurance referred to in subsection (6), and | (a) an eligible investor proves a claim under a bond or policy of professional indemnity insurance referred to in subsection (6), and | ||
| (b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25, | (b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25, | ||
| the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”. | the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”. | ||
| 13. | Section 36 | Substitute the following section for section 36: | Substitute the following section for section 36: |
| “Provisions relating to investment product intermediaries. | 36.—(1) A product producer from whom an investment product intermediary holds a valid written appointment shall, in respect of each eligible investor to whom the Company is liable to make a payment in respect of the intermediary under section 34, pay to the Company an amount calculated as follows: | ||
| A = ICL × RAV ____ INL | |||
| where— | |||
| ‘A’ represents the amount to be calculated; | |||
| ‘ICL’ represents the eligible investor's compensatable loss; | |||
| ‘RAV’ represents the amount of client money or the value of investment instruments forming part of the net loss of the eligible investor that were entrusted by the investor to an investment product intermediary for transmission to an identifiable product producer from whom the intermediary held a valid written appointment when the money was, or the investment instruments were, so entrusted; | |||
| ‘INL’ represents the net loss of the eligible investor. | |||
| (2) Product producers are to be subrogated to the Company with respect to claims of the Company against an investment firm in relation to money that product producers have paid to the Company under this section. | |||
| (3) Nothing in a contract can affect the liability of a product producer under this section. | |||
| (4) The Company may, by proceedings brought in a court of competent jurisdiction, recover as a debt an amount payable to the Company under subsection (1).”. | |||
| 14. | Section 39 | In subsection (2), substitute “the operator of that compensation scheme” for “that investor compensation scheme”. | In subsection (2), substitute “the operator of that compensation scheme” for “that investor compensation scheme”. |
SCHEDULE 4 Miscellaneous Amendments to Other European Communities Regulations Administered by the Bank
PART 1 Amendment of European Communities (Consolidated Supervision of Credit Institutions) Regulations 1992 (S.I. No. 396 of 1992)
| Item | Provision affected | Amendment |
| 1. | Regulation 2 | (a) In subsection (1), substitute the following definition for the definition of “associated enterprise”: |
| “ ‘associated enterprise’, in relation to a credit institution, means— | ||
| (a) a company in respect of which the institution holds— | ||
| (i) not less than 20 per cent of the nominal value of the company's equity share capital, or | ||
| (ii) not less than 20 per cent of the voting shares of the company, | ||
| or | ||
| (b) a subsidiary company of the institution, or | ||
| (c) a holding company of the institution, or | ||
| (d) if the institution is a subsidiary company of another company— | ||
| (i) the other company, or | ||
| (ii) any other subsidiary of the other company, | ||
| or | ||
| (e) an associated company of the institution, | ||
| or | ||
| (f) a partnership in which the institution 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 institution being carried out or proposed to be carried out under this section;”; | ||
| (b) In subsection (1), insert the following definitions after the definition of “the Directive”: | ||
| “ ‘holding company’ has the meaning given by section 2 of the Central Bank Act 1942; | ||
| ‘subsidiary company’ has the meaning given by section 2 of the Central Bank Act 1942.”. | ||
| 2. | Regulation 4 | Substitute the following regulation: |
| “4. (1) A reference to functions in sections 17A and 18 of the Act of 1971 (as respectively substituted by item 2 of Part 6 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 and amended by section 37 of the Central Bank Act 1989) includes a reference to any function imposed on the Bank by these Regulations and the Directive. | ||
| (2) In relation to any investigation or inspection carried out, or any information, document, report or other material or explanation required, by the Bank for the purposes of performing a function imposed on it by these Regulations or the Directive, the Bank has and may exercise the same powers as are conferred on the Bank by section 41 of the Building Societies Act 1989 in relation to— | ||
| (a) investigating or inspecting the state and conduct of the business of a building society, or a corporate body that is a subsidiary or associated body of a society, or any particular aspect of that business, or | ||
| (b) requiring a society or other body corporate to provide the Bank with information, documents, reports or other material or explanations under section 41(2) of that Act.”. | ||
PART 2 Amendment of European Communities (Cross-Border Credit Transfers) Regulations 2003 (S.I. No. 231 of 2003)
| Item | Provision affected | Amendment |
| 1. | Regulation 2 | Insert the following definition after the definition of “financial institution”: |
| “ ‘Financial Services Ombudsman’ means the Financial Services Ombudsman holding office as such under Part VIIB of the Central Bank Act 1942 or acting in that office;”. | ||
| 2. | Regulation 14 | Substitute the following regulation: |
| “14.—The Financial Services Ombudsman is responsible for investigating and adjudicating a dispute arising from the application of these Regulations if the dispute is between— | ||
| (a) an originator and the originator's institution, or | ||
| (b) a beneficiary and the beneficiary's institution.”. | ||
PART 3 Amendment of European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (S.I. No. 211 of 2003)
| Item | Provision affected | Amendment |
| 1. | Regulation 98 | (a) In paragraph (5), substitute “(4)” for “(1)”; |
| (b) in paragraph (6), substitute “(3), (4) and (5)” for “(3) and (4)”. | ||
SCHEDULE 5 Savings and Transitional Provisions
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