The Central Bank of Ireland (the "Central Bank") has published its Enforcement Priorities for 2012 which identifies ten priority areas for enforcement activity in the year ahead.

The Central Bank has pursued an aggressive enforcement strategy of late and this looks set to continue. The importance of enforcement activity within the Central Bank's new regulatory framework has again been emphasised, with Peter Oakes, Director of Enforcement noting that:

"Enforcement action combined with the resultant publicity has a powerful impact promoting compliance and deterring other industry participants from similar non-compliance.."

Mr Oakes also acknowledged the value of enforcement action in setting a benchmark for industry participants as regards the standards and behaviours expected of them by the Central Bank.

The ten areas which have been earmarked as "priority" for 2012 are as follows:

  • Mortgage Arrears
  • Retail Intermediaries
  • Payment Protection Insurance
  • Client Asset Requirements
  • Prudential Requirements
  • Anti-Money Laundering and Counter Terrorist Financing
  • Transaction Reporting
  • Systems and Controls
  • Timeliness and Accuracy of Information submitted to the Central Bank
  • Dissemination of inaccurate / incorrect information in the market (Transparency and Prospectus Directives)

The classification of these areas as priority is due to the fact that they are currently the areas of greatest concern to the supervisory divisions within the Central Bank. As a result, robust enforcement action can be expected where breaches in these areas are identified. The priority areas are also stated by the Central Bank to "align" with the themes identified in its "Programme for Themed Reviews and Inspections for 2012".

It should be noted however that the identification of the above areas as "priority", does not restrict the Central Bank from pursuing enforcement objectives in other areas. Indeed, the information document released by the Central Bank in connection with its enforcement priorities highlighted that resources have also been set aside for the purposes of "reactive" enforcement. Enforcement in this context relates to responding to issues identified by the Central Bank in its general supervisory capacity and also to issues which are brought to the Central Bank's attention through other sources.

Inquiry guidelines

The Central Bank, last Friday, published the responses to Consultation Paper 57 on inquiry guidelines to be prescribed pursuant to section 33BD of the Central Bank Act 1942. Consultation Paper 57 was published in November 2011 and demonstrates the Central Bank's clear intention to develop its administrative sanctions procedures to encompass public inquiries. To date, the administrative sanctions commenced by the Central Bank have ended in settlements. As the consultation is now closed it is anticipated that the Central Bank will shortly publish a set of procedures for formal public inquires.

Last Friday, the Central Bank also enhanced its enforcement powers in the area of fitness and probity by publishing the Central Bank Reform Act 2010 (Procedures Governing the Conduct of Investigations) Regulations 2012. The 2012 Regulations empower the Central Bank to issue prohibition notices when considering the fitness and probity of individuals. See the article on fitness and probity for further details.

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