Central Bank (Supervision and Enforcement) Act 2013

PART 1 Preliminary

1. Short title, collective citation and construction.

1.— (1) This Act may be cited as the Central Bank (Supervision and Enforcement) Act 2013.

(2) The Central Bank Acts 1942 to 2012 and this Act (other than section 5, in so far as it relates to Schedules 3and 4, and sections 75 to 78, 80 to 87 and 89 to 94) may be cited together as the Central Bank Acts 1942 to 2013 and shall be construed together.

2. Commencement.

2.— (1) This Act comes into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to a particular purpose or provision or class of person and different days may be so appointed for different purposes or different provisions or different classes of person.

(2) An order under subsection (1) may, in respect of the repeal of certain Acts to the extent specified in Part 1 of Schedule 1 and the revocation of certain statutory instruments to the extent specified in Part 2 of that Schedule, effected by section 4, appoint different days for the repeal of different provisions of the Acts so specified or the revocation of different provisions of the statutory instruments so specified and for such repeal or revocation, as the case may be, for different purposes of any such provision.

(3) An order under subsection (1) may, in respect of the amendment of Acts and statutory instruments set out inSchedules 2, 3 and 4, effected by section 5, appoint different days for the amendment of different Acts or statutory instruments or different provisions of them.

3. Interpretation.

3.— (1) In this Act—

“Act of 1942” means the Central Bank Act 1942;

“authorisation” means an authorisation, licence or any other permission required to carry on business as a regulated financial service provider granted by the Bank pursuant to any provision of financial services legislation, and includes registration;

“authorised officer” means a person appointed by the Bank under section 24 to be an authorised officer;

“contravene” includes fail to comply, and also includes—

(a) attempting to contravene,

(b) aiding, abetting, counselling or procuring a person to commit a contravention,

(c) inducing, or attempting to induce, a person (whether by threats or promises or otherwise) to commit a contravention,

(d) being (directly or indirectly) knowingly concerned in, or a party to, a contravention, and

(e) conspiring with others to commit a contravention;

F1["customer", in relation to a regulated financial service provider, means—

(a) any person to whom the regulated financial service provider provides or offers financial services,

(b) any person who requests the provision of financial services from the regulatedF2[financial service provider,]

(c) a relevant borrower in a case where the regulated financial service provider undertakes credit servicing in respect of theF2[credit agreement concerned, or]

F3[(d) a hirer in a case where the regulated financial service provider undertakes credit servicing in respect of the consumer-hire agreement or hire-purchase agreement concerned,]

and includes a potential customer and a former customer;]

F4["financial holding company" has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014 (S.I. No. 158 of 2014);]

“financial services legislation” means—

(a) the designated enactments,

(b) the designated statutory instruments, and

(c) the Central Bank Acts 1942 to 2013 and statutory instruments made under those Acts;

“Minister” means the Minister for Finance;

F4["mixed financial holding company" has the same meaning as it has in the European Union (Capital Requirements) Regulations 2014;]

“prescribed contravention” has the same meaning as in section 33AN of the Act of 1942;

“regulated market” has the same meaning as in Regulation 3 of the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No. 60 of 2007);

“related undertaking”, in relation to a person (“the first-mentioned person”), means—

(a) if the first-mentioned person is a company, another company that is related within the meaning of section 140(5) of the Companies Act 1990,

(b) a partnership of which the first-mentioned person is a member,

(c) if the businesses of the first-mentioned person and another person have been so carried on that the separate business of each of them, or a substantial part thereof, is not readily identifiable, that other person,

(d) if the decision as to how and by whom the businesses of the first-mentioned person and another person shall be managed can be made either by the same person or by the same group of persons acting in concert, that other person,

(e) a person who performs a specific and limited purpose by or in connection with the business of the first-mentioned person, or

(f) if provision is required to be made for the first-mentioned person and another person in any consolidated accounts compiled in accordance with the Seventh Council Directive 83/349/EEC of 13 June 1983 ^1, that other person.

F5[(1A) For the purposes ofparagraph (c)of the definition of "customer" insubsection (1)"relevant borrower", "credit servicing" and "credit agreement" have the same meaning as in section 28 of theCentral Bank Act 1997.]

(2) References in this Act to a regulated financial service provider, or a related undertaking, shall, unless the context otherwise requires, be read as including a person who was a regulated financial service provider, or a related undertaking, at the relevant time.

(3) A word or expression used in this Act and also in the Act of 1942, unless the contrary intention appears, has the same meaning in this Act as in the Act of 1942.

4. Repeals and revocations.

4.— (1) The Acts specified in Part 1 of Schedule 1 are repealed to the extent specified in column (4) of that Part.

(2) The statutory instruments specified in Part 2 of Schedule 1 are revoked to the extent specified in column (4) of that Part.

5. Amendments.

5.— (1) The Central Bank Acts are amended to the extent specified in column (3) of Parts 1 to5 of Schedule 2.

(2) The Acts specified in Parts 1 to F6[4] of Schedule 3 are amended to the extent specified in column (3) of each such Part.

(3) The statutory instruments specified in Parts 1 to F6[4] of Schedule 4 are amended to the extent specified in column (3) of each such Part.

(4) The amendment of a statutory instrument by subsection (3) does not prevent or restrict the subsequent amendment or revocation of the instrument by another statutory instrument.

6. Savings and transitional provisions.

6.— (1) A person who was an authorised officer, by whatever name called, appointed under the provisions of any enactment repealed or revoked by this Act immediately before the coming into operation of the repeal or revocation concerned is taken to have been appointed under Part 3.

(2) Anything done by a person who was an authorised officer, by whatever name called, appointed under the provisions of any enactment repealed or revoked by this Act immediately before the coming into operation of the repeal or revocation concerned shall be treated after the coming into operation of the repeal or revocation as done under this Act by an authorised officer appointed under Part 3.

(3) Any information gathered, or any other thing done, under the provisions of any enactment repealed or revoked by this Act is to be treated after the coming into operation of the repeal or revocation as if done under any provision of this Act under which it could have been done had the provision been in force at the time in question.

PART 2 Provision of Report to Bank

7. F7[Interpretation (Part 2).

7.—(1) In this Part—

"reviewee" shall be read in accordance withsection 8;

"reviewer" shall be read in accordance withsection 11.

(2) In this Part—

(a) a reference to a financial service provider shall include a reference to a financial holding company or a mixed financial holding company, and

(b) a reference to a regulated financial service provider shall include a reference to a financial holding company or a mixed financial holding company.]

8. Persons to whom this Part applies.

8.— The following are reviewees for the purposes of this Part:

(a) a regulated financial service provider;

(b) a related undertaking of a regulated financial service provider.

9. Giving of notice to reviewee to provide a report.

9.— (1) The Bank may for the purposes of the proper and effective regulation of financial service providers and having regard to the matters set out in section 10, by notice in writing given to a reviewee, require the reviewee to provide to the Bank, in accordance with such notice, a report on any matter specified in the notice about which the Bank has required or could require the provision of information, or the production of documents, under any provision of financial services legislation.

(2) A notice under subsection (1) shall be in writing and shall state—

(a) the date on which the notice was given,

(b) the period within which the reviewee shall nominate a person to the Bank for approval under section 11,

(c) the purpose of the report,

(d) the scope of the report,

(e) the timetable for completion of the report,

(f) the matters required to be reported on,

(g) whether the report is to include recommendations,

(h) the form of the report,

(i) where appropriate, the methodology to be used in the preparation of the report, and

(j) such other matters relating to the report as the Bank considers appropriate.

10. Matters to which Bank shall have regard before giving notice under section 9.

10.— Before giving a notice under section 9, the Bank, taking account of the purposes for which the report is required, shall have regard to at least the following matters—

(a) whether any other powers that may be available to the Bank under any provision of financial services legislation may be more appropriate in the circumstances concerned,

(b) the relevant knowledge and expertise available to the reviewee, and

(c) the cost implications for the reviewee of providing the report, the resources available to the reviewee and the benefit to the reviewee of providing the report.

11. The reviewer.

11.— (1) A report required to be provided to the Bank under this Part shall be prepared by a person (in this Part referred to as the “reviewer”)—

(a) nominated by the reviewee, within such period as is specified in the notice given under section 9, and approved by the Bank, or

(b) nominated by the Bank, where no person is nominated by the reviewee within the period specified in the notice under section 9 or the Bank is not satisfied with the person so nominated.

(2) The reviewer shall be a person appearing to the Bank to have the skills relating to the business of the reviewee necessary to prepare an objective report on the matters concerned and, without prejudice to the generality of the foregoing, may be an auditor, actuary, accountant, lawyer or any other person with relevant business, technical or technological skills employed or otherwise engaged by the reviewee.

(3) When considering whether to approve a nomination under subsection (1)(a) or make a nomination under subsection (1)(b), the Bank shall have regard to the circumstances giving rise to the requirement for a report and whether the person it proposes to so approve or nominate appears to have—

(a) the competence and capabilities necessary to prepare the report on the matter concerned,

(b) the ability to complete the report within the period specified by the Bank in the notice given under section 9,

(c) any relevant specialised knowledge, including specialised knowledge of the reviewee, the nature of the business carried on by the reviewee and the matters to be reported on,

(d) any potential conflict of interest in reviewing the matters to be reported on, including any arising from the fact that the matters may raise questions relating to the quality or reliability of work previously carried out by the proposed reviewer,

(e) sufficient detachment, having regard to any existing professional or commercial relationship, to give an objective opinion, and

(f) previous experience in preparing reports under this Part or reports of a similar nature.

(4) Where the Bank approves a nomination under subsection (1)(a) or makes a nomination under subsection (1)(b) it shall notify the reviewee, in writing, accordingly.

12. Contract with reviewer.

12.— (1) Where a reviewer is approved or nominated by the Bank under section 11, the reviewee shall enter into a contract with the reviewer.

(2) It shall be a term of the contract referred to in subsection (1)—

(a) that the reviewer is required to prepare for the reviewee a report in accordance with the notice given under section 9,

(b) that any duty owed by the reviewer to the reviewee which might limit the provision of information or opinion by the reviewee to the reviewer in preparing a report under this Part shall be waived,

(c) that the reviewer is required and permitted to provide to the Bank the following where the Bank so requests—

(i) periodic updates on progress and issues arising,

(ii) interim reports,

(iii) documents and working papers,

(iv) copies of any draft reports given to the reviewee, and

(v) specific information about the planning and progress of the work to be undertaken (which may include project plans, progress reports including the amount of work completed, details of time spent, costs to date and details of any significant findings and conclusions),

(d) that the contract is governed by the law of the State,

(e) that—

(i) the Bank has the right to enforce the provisions included in the contract under this subsection,

(ii) in proceedings brought by the Bank for the enforcement of the provisions referred to in subparagraph (i) the reviewer is not to have available by way of defence, set-off or counterclaim any matter that is not relevant to those provisions,

(iii) if the contract includes an arbitration agreement, the Bank is not, in exercising the right specified in subparagraph (i), to be treated as a party to, or bound by, the arbitration agreement, and

(iv) the provisions included in the contract under this subsection are irrevocable and may not be varied or rescinded without the Bank’s prior consent in writing,

and

(f) that the contract is not varied or rescinded in such a way as to extinguish or alter the provisions included in the contract under this subsection.

(3) If the Bank considers it appropriate, it may request the reviewee to give to the Bank a copy of the draft contract before it is made with the reviewer and the Bank may require such modifications to the draft contract as it considers appropriate.

13. Cost of report.

13.— The costs of and incidental to the preparation of a report under this Part shall be borne by the reviewee.

14. Assisting the reviewer.

14.— (1) A reviewee shall give all such assistance to a reviewer as he or she may reasonably require for the purposes of the preparation of a report under this Part.

(2) A person who is providing or who at any time has provided services to a reviewee in relation to any matter on which a report is required to be given under this Part shall give all such assistance to a reviewer as he or she may reasonably require for the purposes of the preparation of the report.

15. Duty of reviewee to ensure performance of reviewer’s functions.

15.— A reviewee shall take such steps as are reasonably necessary to ensure that a reviewer performs his or her functions under this Part in accordance with the terms of his or her contract.

16. Reviewer to provide explanation to the Bank.

16.— A reviewer shall, where requested by the Bank, in such form and within such period as the Bank may specify, provide an explanation of all or any part of a report under this Part or the recommendations, if any, made in the report, or of such other matters relating to the report as the Bank considers appropriate.

17. Bank not bound by report nor liable for it.

17.— (1) The Bank shall not be bound by the content of a report under this Part and such a report shall not be taken to be a decision or opinion of the Bank for any purpose.

(2) The adoption by a reviewee or any other person of a course of action recommended or described in a report under this Part does not represent an endorsement or approval of that course of action by the Bank.

(3) The Bank shall not be liable for any acts or omissions of a reviewer or reviewee relating to a report under this Part.

18. Offence of providing false information to a reviewer.

18.— A person who—

(a) obstructs or impedes a reviewer in the preparation of a report under this Part,

(b) in relation to the preparation of a report under this Part, gives information to a reviewer that the person knows to be false or misleading in a material respect, or

(c) is a reviewer and in relation to the preparation of a report under this section gives information to the Bank which the reviewer knows to be false or misleading in a material respect,

commits an offence and is liable—

(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(ii) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years, or both.

19. Bank may apply to High Court for an order.