Administrative Sanctions Procedure

Part IIIC of the Central Bank Act 1942, as amended (the “Act”) provides the Central Bank with the power to administer sanctions in respect of the commission of prescribed contravention(s) by regulated financial service providers and by persons presently or formerly concerned in their management who have participated in the prescribed contravention(s) committed by the regulated financial service provider.

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 Act or imposed by the Central Bank pursuant to a power exercised under Part IIIC of the Act.

Concerns that a prescribed contravention is being committed or may have occurred will arise in the normal course of work undertaken by a supervisory division or as a result of an on-site inspection at the firm, or a themed inspection across a particular sector. Where a concern is identified, the Central Bank may commence an investigation. There are a number of possible outcomes following an investigation and the decision on the appropriate outcome will be determined on a case-by-case basis.

Enforcement Actions

Settlement

The Act provides that if the Central Bank suspects on reasonable grounds that a regulated entity/individual is committing or has committed a prescribed contravention, it may enter into a settlement agreement with the regulated entity/individual to resolve the matter. The settlement agreement must be in writing and is binding on the Central Bank and the regulated entity/individual.  Further information on the settlement process can be found on our Settlement Procedure page.

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 pursuant to Part IIIC of the Act. The purpose of the Inquiry is to decide if a prescribed contravention is being or has been committed and to determine the appropriate sanctions. Information regarding inquiry hearings relating to the Central Bank can be found here.

The decision of the Inquiry may be appealed to the Irish Financial Services Appeals Tribunal (‘IFSAT’). IFSAT’s decision may subsequently be appealed to the High Court by either the regulated entity/individual or the Central Bank within 28 days of notification of the decision or within such time as the High Court may allow. An appeal to the High Court does not affect the operation of the IFSAT decision appealed against, or prevent the taking of action to implement the decision, unless the High Court otherwise orders. IFSAT publishes its previous decisions on the IFSAT website. See recent public statements issued by the Central Bank in relation to decisions of IFSAT.

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.
  • 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 by a regulated financial service provider.
  • Direction to pay to the Central Bank a monetary penalty (not exceeding the greater of €10,000,000 or 10% of turnover where the regulated financial service provider is a body corporate or an unincorporated body and not exceeding €1,000,000 where the regulated financial service provider is a natural person and for persons concerned in the management of a regulated financial service provider).
  • In the case of a regulated financial service provider which is not authorised by the European Central Bank under the Single Supervisory Mechanism Regulations, suspension or revocation of the authorisation of that regulated financial service provider.
  • In the case of a regulated financial service provider which is authorised by the European Central Bank under the Single Supervisory Mechanism Regulations, the submission of a proposal to the European Central Bank to suspend or revoke the authorisation of that regulated financial service provider.
  • In the case of a natural person, a direction disqualifying the person from being concerned in the management of a regulated financial service provider for a prescribed period of time.
  • 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.

Inquiry Guidelines and Administrative Sanctions Procedure

For further and specific information in respect of the 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 pursuant to Section 33BD of the Act, which detail the procedures the Central Bank ordinarily proposes to follow at Inquiry.

The latest Outline of the Administrative Sanctions Procedure and the Inquiry Guidelines are dated 4 November 2014.