On 13 December 2023, the Central Bank of Ireland ("Central Bank") published its Feedback Statement and finalised consolidated Guidelines relating to the enhanced Administrative Sanctions Procedure ("ASP"). The Guidelines update and consolidate the Central Bank's existing ASP publications, including ASP Outline 2018, Inquiry Guidelines 2014 and ASP Sanctions Guidance 2019.
The Central Bank states in the Feedback Statement that the Guidelines aim to provide transparency, clarity and consistency on the ASP process while emphasising the Central Bank's principles of proportionality and fairness when dealing with individuals and firms. The Central Bank further explained that as the Guidelines are procedural in nature much of the feedback received related mainly to requests for additional clarifications rather than suggested changes. The majority of the submissions received by the Central Bank related to queries regarding the investigations stage of the ASP, however there were also queries raised across the inquiry stage, the settlement process and the sanctions process.
This update provides a high-level overview of the amendments made to the Guidelines following the submissions received by the Central Bank, categorised by area of focus. For a more in-depth analysis of the implications of these amendments and observations on the Feedback Statement, please monitor Matheson's Insights page over the coming days.
Key Amendments
ASP Investigations
- Role of the Responsible Authorised Officer: the Central Bank has provided additional clarity regarding the role and responsibilities of the Responsible Authorised Officer ("Officer") and amended the Guidelines to reflect this;
- Confidential Information: while the Central Bank Individual Accountability Framework Act ("IAF Act") acknowledges that recipients of confidential information may disclose it where required by law to do so, the responses received by the Central Bank identified other circumstances where individuals may have a legitimate need to disclose confidential information, and the Central Bank has considered these and amended the Guidelines to reflect this situation;
- Timeframe for Responses: the Central Bank expects that investigations will be carried out in a timely manner, but acknowledges that additional complexities may require an extension and has set out procedures for extension requests. There is a 7 day time period for submissions on the draft investigation report set out in the draft Guidelines will be insufficient in many cases, and therefore the period will be set by the Officer following a consideration of the complexities of the issues, contents of the draft investigation report and the necessary period to ensure the subject has a fair opportunity to respond. The Guidelines have been updated accordingly;
- Use of Information by the Central Bank: information can be used by the Central Bank to perform any of its statutory duties, but will only be used where it is fair and reasonable to do so. The Guidelines have been amended to provide further clarification on the type of uses;
- Legal Professional Privilege: the IAF Act does not require the subject of an investigation to disclose legally privileged information, and the Guidelines have been clarified to state that entry into a disclosure agreement is done on a voluntary basis. It should be noted that guidance on how to provide information to the Central Bank is not set out in the Guidelines as the practice is subject to change. Additionally, the Central Bank has explained that in practice, a disclosure agreement will include a provision confirming that the Central Bank can utilise the disclosed material for the performance of any of its statutory functions and any other purpose specified in the agreement. The Guidelines have been amended to clarify this; and
- Publication of the Details of the Notice of Inquiry: in line with the principle of proportionality, the Guidelines have been amended to state that where inquiry members make a finding that no prescribed contravention has been committed, it is expected that they will issue a public notice to this effect. By doing so, the Central Bank maintains that equal public visibility of an inquiry finding of no contravention will be achieved.
ASP Inquiries
- Appointment of Inquiry Members: the Central Bank's Regulatory Decisions Unit will write to inquiry participants to confirm their appointment and the Guidelines have been amended to clarify that inquiry members will also be included in that communication and a notice will appear on the Central Bank's website confirming that an inquiry has commenced and who has been appointed;
- Management of Conflicts of Interest: the Central Bank will select members based on experience and expertise and the Guidelines have been amended to provide additional detail on how conflicts are managed at the appointment stage and throughout the inquiry process; and
- A Finding of No Prescribed Contravention: the Guidelines have been amended to state that where inquiry members have concluded an inquiry and found that no prescribed contravention has been committed, the inquiry members will issue a public notice in all instances.
ASP Settlement
- The Process in Undisputed Facts Settlements and Investigation Report Settlements: the Guidelines have been amended to clarify how the new settlement processes will operate; and
- Public Statements: the Central Bank explains that communication is an important tool in supervisory and enforcement messaging, and the Central Bank must be in a position to signal to the public, consumers and wider markets, their views in terms of trends, systemic issues and behaviours. Consequently, the Guidelines have been amended to state that such commentary is relevant to the wider public.
ASP Sanctions
- Determination of Monetary Penalties for Individuals: the Guidelines have been amended to clarify that firms and individuals will be provided with information on how a monetary penalty has been calculated and provide an opportunity to engage with the Central Bank regarding sanctions as part of the settlement or inquiry process;
- Submissions on Sanction: the Guidelines have been amended to clarify that the subject of an inquiry or investigation will be entitled to make submissions on sanctions as part of the settlement process; and
- Directions Imposing Conditions or Disqualification as a Sanction: the Guidelines have been amended to provide further information on the imposition of directions imposing conditions or disqualification as a sanction, which will generally be decided on a case by case basis.
ASP Court Confirmation and Appeals
- Appealable Decisions: the Guidelines have been amended to state that the inquiry decision is the only decision that can be appealed to IFSAT under the ASP.
Other Notable Matters
- Subjects being accompanied at any stage of the ASP: the Guidelines have been amended to clarify that the subject may elect to be represented by a legal practitioner or with permission from the inquiry members, any other person.
Implementation
The Guidelines came into force immediately on publication, on 13 December 2023. In the Feedback Statement the Central Bank explain that the ASP will continue to evolve as the IAF is implemented and commences fully, and that it will remain engaged and keep the ASP under review.
For any queries on this Insight or any aspect of the Individual Accountability Framework, please do not hesitate to contact to any member of our dedicated team or your usual Matheson contact.