Administrative Sanctions Procedure

Under the Administrative Sanctions Procedure (ASP), the Central Bank may carry out investigations and inquiries and may impose sanctions if it determines that firms or individuals have committed a prescribed contravention.

Arising from the Central Bank (Individual Accountability Framework) Act 2023 (the IAF Act), which was signed into law on 9 March 2023 and partially commenced on 19 April 2023, the Central Bank has reviewed its ASP processes with a view to updating those processes to reflect the legislative changes and to reflect our experience of utilising the ASP.  The Central Bank is currently consulting on the changes to the ASP.

The Consultation Paper Consolidated Guidelines in respect of the Central Bank Administrative Sanctions Procedure issued on 22 June 2023.

Prescribed Contravention

What is a prescribed contravention? It could be a breach of:

  • A provision of a designated enactment, including any instrument made thereunder, or a designated statutory instrument; or
  • A code made, or a direction given, under such a provision; or
  • Any condition or requirement imposed under a provision of a designated enactment, designated statutory instrument, code or direction; or
  • Any obligation imposed on any person by Part IIIC of the Central Bank Act 1942 (as amended) (the 1942 Act) or imposed by the Central Bank pursuant to a power exercised under Part IIIC of the 1942 Act.

Enforcement Investigations

The IAF Act codifies the Central Bank’s statutory investigation process and includes, subject to transitional provisions with regard to ongoing investigations, the statutory commencement of investigations, an investigation report process, the express power to discontinue investigations, a duty to provide reasons for discontinuance and robust confidentiality obligations.

Enforcement Outcomes

Settlement

The 1942 Act provides that if the Central Bank suspects on reasonable grounds that a firm or individual is committing or has committed a prescribed contravention, it may enter into a settlement agreement with the firm or individual to resolve the matter.

Inquiry

If it is determined that there are reasonable grounds to suspect that a prescribed contravention is being or has been committed and the matter has not otherwise been resolved (for example by way of settlement), the Central Bank may refer the matter to an Inquiry. The purpose of the Inquiry is to decide if a prescribed contravention is being or has been committed and to determine the appropriate sanctions. View information regarding inquiry hearings relating to the Central Bank.

An Inquiry Decision will not take effect until such time as the Central Bank has applied to the High Court and the High Court has confirmed the sanction imposed.

Sanctions

Following an investigation, one or more of the below sanctions can be imposed (either by way of settlement or at Inquiry):

  • Caution or reprimand of a firm or individual.
  • Direction to refund or withhold all or part of money charged or paid, or to be charged or paid, for the provision of a financial service.
  • Direction to pay to the Central Bank a monetary penalty.
  • Suspension of authorisation.
  • Revocation of authorisation.
  • Disqualification in the case of a natural person.
  • In the case of natural persons to whom the transitional provisions under the IAF Act do not apply, a direction imposing condition(s) on the performance by an individual of any controlled function, specific controlled function(s), or part(s) of controlled function(s).
  • Direction to cease a contravention, if it is found the contravention is continuing.
  • Direction to pay the Central Bank all or part of its costs incurred by the Central Bank in holding an Inquiry and in investigating the matter to which the inquiry relates.

Administrative Sanctions Guidance

The Central Bank’s ASP Sanctions Guidance aids proportionality, consistency and transparency in decision-making, and provides clarity to regulated entities and the public about the Central Bank’s approach to sanctioning under the Administrative Sanctions Procedure.

Read about the current ASP Sanctions Guidance

Inquiry Guidelines and Administrative Sanctions Procedure

For further and specific information in respect of the current Administrative Sanctions Procedure, reference should be made to the Outline of Administrative Sanctions Procedure 2018.

The Central Bank has also prescribed the Inquiry Guidelines 2014 which detail the current procedures the Central Bank ordinarily proposes to follow at Inquiry.

The Individual Accountability Framework and the Administrative Sanctions Procedure

The IAF Act introduces a number of important changes to enhance the ASP. These changes will apply, subject to transitional arrangements, to the enforcement of any obligations under the ASP whether those matters are related to existing obligations under financial services legislation, new obligations introduced as part of the Individual Accountability Framework (IAF) or otherwise become subject to the ASP.

The Central Bank has reviewed the ASP with a view to updating its associated processes and procedures to reflect IAF changes and based on our experience of utilising the ASP.  Accordingly, we have prepared draft composite guidelines which consolidate the existing published ASP Outline 2018, Inquiry Guidelines 2014 and ASP Sanctions Guidance 2019.

Stakeholder views are sought on our proposed approach with respect to the ASP as set out in Consultation Paper Consolidated Guidelines in respect of the Central Bank Administrative Sanctions Procedure issued on 22 June 2023. Appendix 2 of the Consultation Paper outlines the transitional arrangements of the IAF Act relating to existing investigations and inquiries.