The Central Bank of Ireland (the
"CBI") published new Inquiry Guidelines
for the Administrative Sanctions Procedure (the
"ASP") in November 2013. The purpose of
the new Inquiry Guidelines is to provide a greater level of detail
on the inquiry process. While inquiries were already permissible
under the ASP regime, none have been commenced to date. The Inquiry
Guidelines offer an insight into the form and order of proceedings
to be followed during the inquiry, as well as details of the
circumstances that an inquiry will take into account when
determining the appropriate sanctions to apply.
As far back as December 2010, the CBI had indicated in its
Enforcement Strategy 2011-2012 that it expected to see a number of
cases going to inquiry in 2011. More recently in 2013, the CBI has
again indicated its intention that cases will soon be referred to
inquiry. The publication of the Inquiry Guidelines suggests that
the CBI is prepared to avail of this option and that inquiries will
be a prominent feature of the CBI's enforcement activity in
2014.
The CBI's Strategy Statement 2013-2015 stated that "where
individual responsibility is at the core of suspected breaches of
financial services law", the CBI would focus its enforcement
attention on where that responsibility fell. While regulated firms
are more likely to avail of the settlement procedure and accept a
fine, individuals may be less likely to admit to a prescribed
contravention, as the impact of a fine and sanction will be
significantly higher on an individual. A settlement agreement
entered into by an individual may be considered by the CBI in
assessing a subsequent application by that person to perform a
pre-approval controlled function under the fitness and probity
regime. We expect that individuals suspected of prescribed
contraventions are the most likely cases to be referred to
inquiry.
The Inquiry Guidelines offer an insight into the form and order of
proceedings to be followed during the inquiry, as well as details
of the circumstances that an inquiry will take into account when
determining the appropriate sanctions to apply. Furthermore, it is
confirmed that while the inquiry will be held in public, an inquiry
can be adjourned to facilitate settlement, which is carried out in
private. Administrative support for inquiries will be provided by
the Regulatory Decisions Unit which acts as registrar to an inquiry
and provides assistance on procedural matters and is the point of
contact for the regulated entity. This is the unit that will issue
a Notice of Inquiry to the regulated entity.
The preparations underway for the commencement of inquiries
illustrate the CBI's continued focus on its enforcement
strategy of "assertive risk-based supervision underpinned by a
credible threat of enforcement". Under the new guidance of
Derville Rowland, former Head of Enforcement, who last year
replaced Peter Oakes as Director of Enforcement, regulated firms
and persons concerned in the management of those firms can expect a
credible threat of enforcement in 2014.
Matheson hosted a
Client Breakfast Briefing on the topic of Enforcement in
November 2013, at which members of the CBI's Enforcement
division spoke, including the Director of Enforcement, Derville
Rowland. The clear message from this briefing was that 2014
will be "the year of the inquiry".
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