Select Sub-Committee on Finance debate -
Wednesday, 24 Apr 2013

Central Bank (Supervision and Enforcement) Bill 2011: Committee Stage

Acting Chairman (Deputy Arthur Spring)

I welcome the Minister for Finance, Deputy Michael Noonan, and his officials. The purpose of the meeting is to consider the Central Bank (Supervision and Enforcement) Bill 2011 which was referred to the select sub-committee by Dáil Éireann on 26 October 2011.

It is proposed to sit until 9 p.m., at which stage a decision can be taken to sit later or resume consideration of the Bill tomorrow morning at 10 a.m. Is that agreed? Agreed.

In amendments Nos. 1 and 121 the reference to section 54 is to be read as referring to the new section 62 proposed to be inserted by amendment No. 114.

SECTION 1

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 1 and 146 are related and will be discussed together.

Minister for Finance (Deputy Michael Noonan)

I move amendment No. 1:

In page 7, lines 23 to 25, to delete subsection (2) and substitute the following:

"(2) The Central Bank Acts 1942 to 2012 and this Act (other than section 54) may be cited together as the Central Bank Acts 1942 to 2013 and shall be construed together.".

Amendment agreed to.

Section 1, as amended, agreed to.

Section 2 agreed to.

SECTION 3

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 2 and 36 are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 2:

In page 8, subsection (1), between lines 16 and 17, to insert the following:

“ “contravene” includes fail to comply, and also includes—

(a) attempting to contravene,

(b) aiding, abetting, counselling or procuring a person to commit a

contravention,

(c) inducing, or attempting to induce, a person (whether by threats or

promises or otherwise) to commit a contravention,

(d) being (directly or indirectly) knowingly concerned in, or a party to, a

contravention, and

(e) conspiring with others to commit a contravention;”.

These are technical amendments relocating a definition within the Bill.

Amendment agreed to.

Section 3, as amended agreed to.

Section 4 agreed to.

SECTION 5

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 3 to 5, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 3:

In page 9, subsection (1), line 29, to delete “Part 1 to Part 4” and substitute “Parts 1 to 4”.

These are technical amendments changing cross-references.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 4:

In page 9, subsection (2), line 30, to delete “Part 1 to Part 8” and substitute “Parts 1 to 8”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 5:

In page 9, subsection (3), line 32, to delete “Part 1 to Part 7” and substitute “Parts 1 to 7”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 6:

In page 9, between lines 34 and 35, to insert the following subsection:

“(4) The amendment of a statutory instrument by subsection (3) does not prevent or restrict the subsequent amendment or revocation of the instrument by another statutory instrument.”.

This is a technical amendment about statutory instruments.

Amendment agreed to.

Section 5, as amended, agreed to.

NEW SECTION

Deputy Michael McGrath

I move amendment No. 7:

In page 9, before section 6, to insert the following new section:

“6.—Section 2 of the Statute of Limitations (Amendment) Act 1991 is amended—

(a) in subsection (1), between the words “for the purposes of any provision of this Act whereby the time within which an action in respect of an injury” and the words “may be brought” by inserting the words “or an action in respect of a financial product”,

(b) by inserting the following subsection after subsection (3):

“(4) For the purposes of any provision of this Act whereby the time within which an action in respect of financial product may be brought depends on a person’s date of knowledge references to that person’s date of knowledge are references to the date on which he first had knowledge of the fact that the financial product was defective.”.”.

This amendment concerns the workings of the Office of the Financial Services Ombudsman. Under existing legislation, there is a six-year rule whereby, in effect, somebody can only complain to the ombudsman about a product sold to him or her within the past few years. I am proposing this amendment to deal with the potential misselling of payment protection insurance policies, problems that arise some years later about endowment mortgages, risky borrow-to-invest schemes and so forth. Very often people only find out well after the six-year period has expired that there is a problem with the product they bought. The most high profile example involves the misselling of payment protection insurance policies, a matter which is being investigated by the Central Bank.

I understand that in other jurisdictions the time limit applies after a person becomes aware that the product he or she bought was in some way defective or potentially missold. That is the essence of what I am proposing. The Minister should consider moving from the situation where the existing time limit is strictly six years from the date a product is sold to one where people would have a period of time from when they become aware of an issue with the product in which to make a complaint about the product bought. Very often, under existing legislation, people find out too late that they were sold a pig in a poke and have no recourse through the ombudsman. Therefore, this is a sensible proposal. If the Minister cannot accept it under this Bill, I hope he will consider legislating for it in another.

Deputy Michael Noonan

Section 3 of the Statute of Limitations Act 1991 introduced an element of discoverability to the limitation period applicable in respect of claims for personal injuries. Personal injuries are defined to include any disease or impairment of a person's physical or mental condition. On a basic level, claims in respect of such injuries must now be instituted within two years of the date on which the injury occurred or, if later, the date on which the injured person became aware of the injury.

The limitation period for almost all other actions arising in tort, including actions in respect of financial products, is six years from the date on which the cause of action accrues, regardless of the date on which the person affected became aware of the damage. The amendment seeks to introduce a provision on discoverability in the limitation period applicable to claims relating to financial products. The apparent intention of the amendment is to ensure the limitation period in respect of such claims will not begin to run until the claimant has become aware of the damage incurred. I am aware that the Law Reform Commission has published reports recommending the introduction of an element of discoverability in provisions on the limitation periods applicable to claims arising in tort. The Minister for Justice and Equality has indicated his willingness to consider the reports in the context of future legislation on the Statute of Limitations. The issue the amendment seeks to address should be dealt with as part of a wider Government response to the reform of the Statute of Limitations taking account of the Law Reform Commission's reports. On that basis, I do not propose to change the limitation period applicable to claims in respect of financial products on an isolated basis. I do not, therefore, propose to accept the amendment.

Deputy Michael McGrath

I am aware of the reports of the Law Reform Commission on the Statute of Limitations. What I seek from the Minister is an indication of whether he supports some movement in principle on the issue. It can often take much longer than six years for consumers of various financial products to realise that the product is not what they thought it was. I take the example of a self-employed person who purchased a payment protection insurance policy. He or she might find himself or herself out of work after ten or 15 years only to realise on inquiry that the product is of no use and was missold in the first place. The measure proposed in the amendment is a common-sense one. While I accept the Minister will not act this evening, I ask him to give an indication that he supports in principle the introduction of an element of discoverability. It would strengthen consumer rights and enhance consumer protection in the financial services area. It would be a positive step.

Deputy Michael Noonan

I am not opposed in principle to the measure under discussion. The provision would more appropriately be introduced in a reforming Bill of the Minister for Justice and Equality to take account of recommendations from the Law Reform Commission on the Statute of Limitations. I may have a legislative vehicle in my Department which will provide for the amalgamation of the Office of the Pensions Ombudsman with Financial Services Ombudsman. I will reconsider the matter in that context.

I am supportive of the general principle and understand the Law Reform Commission's recommendation was that the limitation period run for two years from the time one became aware of the flaw in the product. Something along these lines is appropriate, but the Bill before the committee is the wrong vehicle for it. In the absence of a commitment from the Minister for Justice and Equality to legislate on the generality of the Law Reform Commission's recommendations, I will look for an appropriate legislative vehicle originating in my Department in which to include a provision along the lines suggested by Deputy Michael McGrath.

Deputy Pearse Doherty

That is a welcome commitment. In the absence of a comprehensive Bill from the Minister for Justice and Equality, when does the Minister expect the alternative vehicle to be brought forward?

Deputy Michael Noonan

It will involve the amalgamation of two offices over a two year period, which means it will not be introduced immediately. I hope it will be introduced within the lifetime of the Government.

Amendment put and declared lost.

Sections 6 to 8, inclusive, agreed to.

SECTION 9

Chairman

Amendments Nos. 8 to 15, inclusive, are related and may be discussed together.

Deputy Michael McGrath

I move amendment No. 8:

In page 10, subsection (1), line 18, to delete "the reviewee" and substitute "a reviewer".

I went back over my speech on Second Stage, which was made over a year and half ago. I raised the issue addressed by amendments Nos. 8 to 15, inclusive, at that point. Where a company is investigated by the Central Bank, it will nominate a firm or an individual to prepare a report to be approved by the Central Bank. Where it fails to nominate a firm or an individual or confirmation of the proposed firm or individual is denied by the Central Bank, the bank will appoint a firm to conduct a review. I propose through the amendments the introduction of a better system whereby the Central Bank would appoint the firm to carry out the investigation or review. The onus would not, therefore, be placed on the company subject to the review to identify an appropriate reviewer. It would be a more meaningful review if it were conducted by an independent firm selected by the Central Bank from a panel of qualified firms and enhance the integrity of the resulting report. The Minister may correct me if I am wrong, but that is my interpretation having read through the Bill initially.

Deputy Michael Noonan

I have a lengthy speaking note which I will deliver for the Deputy.

Part 2 of the Bill provides a new power for the Central Bank to require financial service providers to commission and submit to it an independent and objective report. The Central Bank has significant information gathering powers which are being further enhanced under the Bill, given the central importance of information to the business of regulation. Part 2 creates a new way to collect information and insights on financial service providers. The new power is an additional tool for the Central Bank to supervise entities and not something which is intended or has the capacity to take the place of direct regulatory oversight such as authorised officer powers. The provision is modelled on the regime that has operated in the UK financial system in the past decade, with some modifications to ensure it is used in a balanced and proportionate way.

The proposed reports are not a substitute for direct supervision by the Central Bank and it is not intended that they would be used without regard to their necessity and the associated cost burden on firms. The reports may be used for a variety of purposes, including a review of controls over data security; controls to prevent money laundering; the adequacy of systems and controls, corporate governance, senior management, compliance and risk management arrangements; fair customer treatment; market abuse and capital adequacy. A key aspect of the provision is to ensure there is confidence in the analysis and its objectivity, which includes avoiding client bias. In examining the most suitable approach a number of models were considered, including having the Central Bank undertake its own analysis, getting the financial service provider to work with a reviewer of the Central Bank's choosing or providing for the financial service provider to nominate a reviewer, subject to Central Bank approval. The third approach was chosen and is reflected in the Bill for the reasons I will set out.

The Central Bank already has extensive powers to gather information, prepare analysis and produce its own reports directly. These powers are further enhanced through the information gathering and authorised officer powers provided for in the Bill.

Where appropriate, this approach would be used. However, the skilled person's report may be more appropriate in other contexts. It is best that responsibility rest with the firm in terms of its own management and reporting responsibilities to the Central Bank. Having said that, my Department has been very aware of the mistakes made in the past where firms presented supposedly objective outside analysis which turned out to be unreliable and compromised by client bias.

A number of safeguards have been included in the draft to overcome this problem. The choice of reviewer must be approved by the Central Bank. Before approving the reviewer, the bank must take account of any potential conflict of interest in reviewing the matters to be reported on, including any conflict arising from the fact that matters may raise questions relating to the quality and reliability of work previously carried out by the proposed reviewer. The bank must be satisfied that there is sufficient detachment in the relationship between the reviewer and the reviewee, having regard to a existing professional or commercial relationship, to give an objective opinion. The contract with the reviewer may be reviewed and modified by the bank.

The published provision is being amended to allow for direct discussions between the Central Bank and the reviewer on completion of the report to pick up on any issues of interest. The reviewer will also benefit from the limitation of liability and whistleblower protections available under the Bill in order that any duty of confidentiality will not impede open and frank dialogue with the Central Bank.

While I have sympathy with the underlying point being made and the Deputy's amendments, the provision, as proposed, including the amendments, strikes the right balance between the production of reports that are genuinely objective and independent and avoiding a situation where the Central Bank will be sucked into hands-on responsibility for the production of this type of report. For these reasons, I am not accepting the amendment.

Deputy Michael McGrath

The Minister's speaking note was lengthy. When the Central Bank is of the view that a firm needs to be investigated or have a report prepared on an issue, why is it preferable for the firm to appoint another to compile the report, as opposed to the Central Bank, as the independent watchdog and regulator, appointing a firm to do the work? There was a considerable amount of material in the Minister's response and he outlined the safeguards. However, I do not get the principle involved. Why is it preferable for the firm to appoint another? Why not remove any doubt about the independence, objectivity and integrity of the report by having the Central Bank put together a panel of appropriate firms every year under the procurement process and dip into it to appoint one of them to produce a report on a particular issue about a licensed entity? I do not understand the logic used.

Deputy Michael Noonan

An industry consultation process took place on this provision. I will give the Deputy a short summary to give him an insight into the thinking behind the measure. What emerged from the process were concerns that the Central Bank might take action on the basis of interim or incomplete reports, to which it can have access under section 12. There was also the need for prior consultation with a regulated financial services provider to confirm the factual accuracy of any information contained in a report before the Central Bank would take any action arising from a report and the need for clarity around how and when the power to require a report would be used by the bank.

In response to the consultation process a number of amendments are being proposed to the Bill which enhance the focus and balance of the provision without compromising its effectiveness. These include an amendment to section 15 which will enable the Central Bank to sit down with the reviewer to discuss the findings of the report and any other issue that might be relevant and a further amendment to provide that the bank may issue guidelines setting out clearly how and under what circumstances it would make use of these powers. I am open to suggestions as to how the provision might be improved to ensure adequate detachment and objectivity. However, I would like to preserve the core design of this part where it is the responsibility of the financial service provider to nominate the reviewer for Central Bank approval and the contractual relationship remains between the reviewer and the reviewee, albeit subject to Central Bank oversight. That gives the Deputy an insight into the official thinking behind this provision.

Deputy Pearse Doherty

The reviewer is dealt with in section 11. Can the reviewer be an individual?

Deputy Michael Noonan

That is correct.

Deputy Pearse Doherty

It is more likely that an individual would be appointed to compile a report depending on its scale. I agree with the sentiments expressed by Deputy Michael McGrath. While I know there is protection offered by the fact that the Central Bank has to approve the reviewer, would it not be more appropriate for the bank to have some panel of individuals who would know what it required? I know they will be issued with a direction as to what the report must contain. However, instead of the bank choosing whoever it deemed necessary, with it being forced to refuse someone which is an issue because the bank must find reasons to refuse him or her, would it not be more appropriate for a suitable panel to be identified by the bank? The bank would then select someone from the panel who would enter into the contract with the financial institution.

Deputy Michael Noonan

The Central Bank already has that power.

Acting Chairman (Deputy Arthur Spring)

I hope the Minister will not mind if I let Deputy Michael McGrath comment again.

Deputy Michael McGrath

I know comparisons are not always valid, but if one was a building regulations inspector with a concern about the quality of a certain building and told the developer to bring a report on a particular aspect of the way the building was constructed, would one have more confidence in that report than in a report commissioned by the building inspectorate? No, one would not. It is a matter of principle. I will not press the issue, but I find it difficult to understand why one is so anxious to retain the direct reviewer-reviewee relationship.

Deputy Michael Noonan

It is an additional power. The Central Bank already has the power to select an authorised officer to produce a report on a particular practice or set of circumstances. This is in addition to the power recommended by Deputy Pearse Doherty as an alternative. They are not alternatives. The two powers give the Central Bank a range of options on how to proceed and will make regulation more effective.

Deputy Pearse Doherty

Is it not the case that the authorised officer of the Central Bank would be used in more extreme cases and that the reviewer could be used in more routine cases where the alarms were not as loud? When we get to the section dealing with authorised personnel, it will be seen that they have serious and substantial powers. I am not sure, therefore, if it is fair to compare them. It is not a die in the ditch issue, but it does not make sense for the Central Bank to have a veto but to have to justify why it is not going to accept an individual when it would be far more appropriate for it to identify skilled individuals who would know what it was looking for and who it had already deemed fit to carry out this work and then select from that panel of individuals. It would still retain the relationship between the reviewer and the financial institution because the contract between the two would still be in place, but it would take away the complete freedom of the financial institution to choose whom it wanted.

Deputy Michael Noonan

There are various ways of looking at this but we want to maintain the relationship between reviewer and reviewed in the first instance. We drew on the experience in the UK, which has had legislation along these lines for approximately ten years. This approach seems to work well in practice. I am sure the Deputy's observation is correct. In terms of regulation, the officer appointed by the Central Bank to go in would be a higher order of regulation than what is contained in this section. They coexist, however.

Amendment, by leave, withdrawn.

Amendment No. 9 not moved.

Section 9 agreed to.

Section 10 agreed to.

Amendments Nos. 10 to 12, inclusive, not moved.

Section 11 agreed to.

Amendments Nos. 13 to 15, inclusive, not moved.

Sections 12 to 15 agreed to.

NEW SECTION

Acting Chairman (Deputy Arthur Spring)

Acceptance of amendment No. 16 involves the deletion of section 16. Amendments Nos. 16 and 19 are related and may be discussed together by agreement.

Deputy Michael Noonan

I move amendment No. 16:

In page 13, before section 16, to insert the following new section:

16. - A reviewer shall, where requested by the Bank, in such form and within such period as the Bank may specify, provide an explanation of all or any part of a report under this Part or the recommendations, if any, made in the report, or of such other matters relating to the report as the Bank considers appropriate.”

These amendments relate to the feedback meetings with the reviewer and the ability for the Central Bank to publish guidelines on this Part.

Amendment agreed to.

Section 16 deleted.

Section 17 agreed to.

SECTION 18

Question proposed: "That section 18 stand part of the Bill."

Deputy Pearse Doherty

Section 18 sets out convictions and fines for any person who impedes the work of the reviewer. I am not objecting to these provisions but the focus is on the financial institutions or individuals who may be obstructing the reviewer or providing misleading information to an inquiry. What if the reviewer provides misleading information, however? This is a very small country and many of the individuals who will be appointed as reviewers will have experience in or understanding of the financial services sector. I suggest that the Minister might consider an amendment on Report Stage so that a reviewer who provides misleading information would be subject to the same sanctions. There should be additional protection in this regard.

Deputy Michael Noonan

I understand there is a generic offence if the reviewer was to provide false information to the bank. That is covered in the contract between the reviewed and the reviewer. The offence to which the Deputy drew our attention is contained as a generic provision in the contract between the two parties but it is not set out in a specific section.

Deputy Pearse Doherty

I ask the Minister to explain that to me. I am thinking of a scenario in which a financial institution is under review by the Central Bank and the reviewer and the reviewee are somehow colluding to provide false information to the bank. Under this section, the reviewee would be subject to prosecution but I do not see how the reviewer would be subject to sanction.

Deputy Michael Noonan

It would be an offence and it is covered by a generic provision in the contract between the two parties. Amendment No. 31 introduces a generic offence whereby a person commits an offence if he or she:

(a) obstructs or impedes the Bank or an authorised officer in the exercise of any powers under this Part,

(b) without reasonable excuse, does not comply with a requirement imposed under this Part,

(c) in purported compliance with such a requirement, provides information or records or other documents to the Bank or an authorised officer that the person knows to be false or misleading in a material respect, or

(d) falsely represents himself or herself to be an authorised officer.

Deputy Pearse Doherty

However, that section is only relevant to the Part of the Bill dealing with authorised officers. It would be an offence in that context but the amendment does not deal with the reviewer. I am merely flagging the issue.

Deputy Michael Noonan

It is covered under the provision on supplying information to the bank and it would be an offence under that section if somebody behaved as the Deputy suggested. It is also covered in the contract.

Deputy Pearse Doherty

I presume the contract would also specify an offence of providing false information to the bank but, while this section goes further in outlining the maximum penalties, it does not apply to the reviewer.

Deputy Michael Noonan

The penalties would be the standard penalties. They are also the penalties that apply to equivalent offences regarding authorised officers. My understanding is that it is covered in different parts of the legislation.

Question put and agreed to.

SECTION 19

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 17 and 18 are related and may be discussed together by agreement.

Deputy Michael Noonan

I move amendment No. 17:

In page 14, subsection (1), line 9, after “Part” to insert the following:

“or by the terms of a contract referred to in section 12(1)”.

These are technical amendments regarding the reviewer's contract.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 18:

In page 14, subsection (1), line 11, after “Part” to insert “or under the terms of such a contract”.

Amendment agreed to.

Section 19, as amended, agreed to.

NEW SECTIONS

Deputy Michael Noonan

I move amendment No. 19:

In page 14, before section 20, but in Part 2, to insert the following new section:

20. - (1) The Bank may publish, in such form and manner as it considers appropriate, guidelines for the purpose of providing practical guidance for reviewees and reviewers relating to the application and operation of this Part.

(2) The guidelines may include different provisions in respect of different classes of reviewee or reviewer.”.

Amendment agreed to.

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 20 and 32 are related and may be discussed together by agreement.

Deputy Michael Noonan

I move amendment No. 20:

In page 14, before section 20, to insert the following new section:

“PART 3

INFORMATION, ETC

CHAPTER 1

Introductory

21.—(1) The following are persons to whom this Part applies (whether they are within or outside the State):

(a) a regulated financial service provider;

(b) a person who has applied for an authorisation but whose application has not been determined;

(c) a person whom the Bank or an authorised officer reasonably believes is or has been a regulated financial service provider or is or has been acting as,

or claiming or holding himself or herself out to be, a regulated financial service provider;

(d) a person who is or has been, or whom the Bank or an authorised officer reasonably believes is or has been, without an authorisation, providing a financial service in respect of which an authorisation is required;

(e) a related undertaking of any of the persons referred to in any of the preceding paragraphs;

(f) any person whom the Bank or an authorised officer reasonably believes may possess or have control of information about—

(i) a financial service, or

(ii) an investment, security or other financial instrument which is, or is to be, admitted to trading under the rules and systems of a regulated market or an equivalent system operating under the law of a territory other than the State;

(g) any other person whom the Bank or an authorised officer reasonably believes may possess information about a person referred to in any of the preceding paragraphs;

(h) a person who is, in relation to a person referred to in any of the preceding paragraphs, a person mentioned in subsection (2);

(i) a person who is or has been an officer or employee or agent of a person referred to in any of the preceding paragraphs or is, in relation to a person who is or has been such an officer, employee or agent, a person mentioned in subsection (2).

(2) The persons referred to in subsection (1)(h) and (i) are—

(a) an administrator within the meaning of section 1(1) of the Insurance (No.2) Act 1983,

(b) an administrator within the meaning of section 2 of the Investor Compensation Act 1998,

(c) a person appointed as an administrator of a credit union by virtue of section 137 of the Credit Union Act 1997 or appointed to act as a provisional administrator of a credit union by virtue of section 138 of that Act,

(d) a special manager appointed pursuant to the Credit Institutions (Stabilisation) Act 2010,

(e) a special manager appointed pursuant to the Central Bank and Credit Institutions (Resolution) Act 2011,

(f) an examiner, liquidator, receiver or official assignee, and

(g) a person with functions corresponding to those of any of the persons within the preceding paragraphs under the law of a territory other than the State.

(3) In subsection (1)(i) “agent”, in relation to a person referred to in subsection (1)(a) to (h), includes a past (as well as a present) agent and includes the person’s banker, accountant, solicitor, auditor and financial or other adviser.”.

This amendment sets out consolidated and enhanced information gathering and authorised officer powers for the Central Bank. The key new provisions include the power to require the creation of information, for example stress tests, and provisions regarding legal professional privilege, which mirror those in company law.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 21:

In page 14, before section 20, to insert the following new section:

“CHAPTER 2

Bank’s power to gather information, etc.

22.—(1) Where it is necessary to do so for the purpose of the performance of the Bank’s functions under financial services legislation relating to the proper and effective regulation of financial service providers, the Bank may, by notice in writing given to a person to whom this Part applies, require the person—

(a) to provide to the Bank the information specified in the notice,

(b) to provide to the Bank the records so specified, or

(c) to prepare and provide to the Bank the forecasts, plans, accounts or other documents so specified.

(2) A person on whom a requirement is imposed under subsection (1) shall comply with the requirement—

(a) at such time or times, or within such period, as may be specified in the notice or in a further notice given by the Bank, and

(b) at such place as may be so specified.

(3) The Bank may require that information, records or other documents provided in compliance with a requirement under subsection (1) be certified or attested as to their authenticity or correctness in such manner as the Bank may reasonably require, including by statutory declaration.

(4) The Bank may take copies of, or extracts from, any records or other documents provided in compliance with a requirement under subsection (1).

(5) This section does not limit any other power of the Bank to require the provision of information or records or the preparation and provision of documents.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 22:

In page 14, before section 20, to insert the following new section:

23.—(1) The Bank may require that information, records or other documents provided in response to a requirement under section 22(1) be provided in such form and manner as the Bank may reasonably require.

(2) A person who fails to provide any information, records or other documents in the form reasonably required by the Bank shall be treated as not having provided it or them in compliance with the requirement.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 23:

In page 14, before section 20, to insert the following new section:

“CHAPTER 3

Authorised officers

24.—(1) Where it is necessary to do so for the purpose of the performance by the Bank of its functions under financial services legislation relating to the proper and effective regulation of financial service providers, the Bank may appoint any of its officers or employees or other suitably qualified persons to be authorised officers and to exercise any of the powers conferred by this Chapter.

(2) The Bank may revoke any appointment made by it under subsection (1).

(3) An appointment or revocation under this section shall be in writing.

(4) A person’s appointment by the Bank as an authorised officer ceases on the earlier of—

(a) the revocation by the Bank of the appointment,

(b) in a case where the appointment is for a specified period, the expiration of the period,

(c) the person's resignation from the appointment, and

(d) in the case where the person is an officer or employee of the Bank—

(i) the resignation of the person as an officer or employee of the Bank, or

(ii) the termination of the person's employment with the Bank, or when the person's term of office ceases, for any reason.

(5) Whenever requested to do so by the Bank, an authorised officer shall give to the Bank a report on the exercise by him or her of all or any of the powers conferred on an authorised officer by this Chapter.

6) In this section “suitably qualified person” means any person (other than an officer or employee of the Bank) who, in the opinion of the Bank, has the qualifications and experience necessary to exercise the powers conferred on an authorised officer by this Chapter.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 24:

In page 14, before section 20, to insert the following new section:

25.—Every authorised officer appointed by the Bank shall be furnished with a warrant of his or her appointment, and when exercising a power conferred by this Chapter shall produce such warrant or a copy of it, together with a form of personal identification, for inspection if requested to do so by a person affected by the exercise of the power.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 25:

In page 14, before section 20, to insert the following new section:

26.—(1) Subject to subsection (2), an authorised officer may at all reasonable times enter any premises—

(a) which the authorised officer has reasonable grounds to believe are or have been used for, or in relation to, the business of a person to whom this Part applies, or

(b) at, on or in which the authorised officer has reasonable grounds to believe that records relating to the business of a person to whom this Part applies are kept.

(2) An authorised officer shall not enter a dwelling, otherwise than—

(a) with the consent of the occupier, or

(b) pursuant to a warrant under section 28.

(3) In this Chapter “premises” includes vessel, aircraft, vehicle and any other means of transport, as well as land and any other fixed or moveable structure.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 26:

In page 14, before section 20, to insert the following new section:

27.—(1) An authorised officer may do any one or more of the following:

(a) search and inspect premises entered under section 26* or pursuant to a warrant under section 28;

(b) require a person to whom this Part applies who apparently has control of, or access to, records, to provide the records;

(c) summon, at any reasonable time, a person to whom this Part applies—

(i) to give to the authorised officer such information as the authorised officer may reasonably require,

(ii) to provide to the authorised officer any records over which the person has control of, or access to, and which the authorised officer may reasonably require, or

(iii) to provide an explanation of a decision, course of action, system or practice or the nature or content of any records provided under this section;

(d) inspect records so provided or found in the course of searching and inspecting premises;

(e) take copies of or extracts from records so provided or found;

(f) subject to subsection (3), take and retain records so provided or found for the period reasonably required for further examination;

(g) secure, for later inspection, any records provided or found and any data equipment, including any computer, in which those records may be held;

(h) secure, for later inspection, premises entered under section 26 or pursuant to a warrant under section 28, or any part of such premises, for such period as may reasonably be necessary for the purposes of the exercise of his or her powers under this Chapter, but only if the authorised officer considers it necessary to do so in order to preserve for inspection records that he or she reasonably believes may be kept there;

(i) require a person to whom this Part applies to answer questions and to make a declaration of the truth of the answers to those questions;

(j) require a person to whom this Part applies to provide an explanation of a decision, course of action, system or practice or the nature or content of any records;

(k) require a person to whom this Part applies to provide a report on any matter about which the authorised officer reasonably believes the person has relevant information;

(l) if a person to whom this Part applies who is required to provide a particular record is unable to provide it, require the person to state, to the best of that person's knowledge and belief, where the record is located or from whom it may be obtained;

(m) require that any information given to an authorised officer under this Chapter is to be certified as accurate and complete by such person or persons and in such manner as the Bank or the authorised officer may require.

(2) Where records are not in legible form, an authorised officer, in the exercise of any of his or her powers under this Chapter, may—

(a) operate any data equipment, including any computer, or cause any such data equipment or computer to be operated by a person accompanying the authorised officer, and

(b) require any person who appears to the authorised officer to be in a position to facilitate access to the records stored in any data equipment or computer or which can be accessed by the use of that data equipment or computer to give the authorised officer all reasonable assistance in relation to the operation of the data equipment or computer or access to the records stored in it, including—

(i) providing the records to the authorised officer in a form in which they can be taken and in which they are, or can be made, legible and comprehensible,

(ii) giving to the authorised officer any password necessary to make the records concerned legible and comprehensible, or

(iii) otherwise enabling the authorised officer to examine the records in a form in which they are legible and comprehensible.

(3) Where the Bank or an authorised officer proposes to retain, pursuant to this section, any records taken by the authorised officer under subsection (1) for a period longer than 14 days after the date on which the records are taken, the Bank or the authorised officer shall, before the end of that period of 14 days, or such longer period as the person concerned may agree, furnish, on request, a copy of the records to the person who it appears to the Bank or the authorised officer, but for the exercise of the powers under this section, is entitled to possession of it.

(4) A person to whom this Part applies shall give to an authorised officer such assistance as the authorised officer may reasonably require and make available to the authorised officer such reasonable facilities as are necessary for the authorised officer to exercise his or her powers under this Chapter including such facilities for inspecting and taking copies of any records as the authorised officer reasonably requires.

(5) Subject to any warrant issued under section 28**, an authorised officer may be accompanied, and assisted in the exercise of the officer’s powers under this Chapter, by such other authorised officers, members of the Garda Síochána or other persons as the authorised officer reasonably considers appropriate.

(6) An authorised officer may require a person to provide him or her with his or her name and address where—

(a) the authorised officer has reasonable grounds for believing that the person—

(i) is committing or has committed an offence under financial services legislation,

(ii) is committing or has committed a prescribed contravention, or

(iii) has deliberately concealed or destroyed evidence, or is deliberately concealing or destroying evidence, or is likely to deliberately conceal or destroy evidence, of such an offence or a prescribed contravention, or

(b) the authorised officer has reasonable grounds for requiring such information for the purpose of applying for a warrant under this Chapter.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 27:

In page 14, before section 20, to insert the following new section:

28.—(1) Without prejudice to the powers conferred on an authorised officer by or under any other provision of this Chapter, if a judge of the District Court is satisfied on the sworn information of the authorised officer that there are reasonable grounds for believing that records are to be found on, at or in any premises, the judge may issue a warrant authorising an authorised officer accompanied by such other authorised officers or members or the Garda Síochána as may be necessary, at any time or times, within the period of validity of the warrant, on production, if so requested, of the warrant—

(a) to enter the premises specified in the warrant, if need be by reasonable force, and

(b) to exercise the powers conferred on authorised officers by this Chapter or such of those powers as are specified in the warrant.

(2) The period of validity of a warrant shall be 1 month from its date of issue but that period of validity may be extended in accordance with subsections (3) and (4).

(3) The authorised officer may, during the period of validity of a warrant (including such period as previously extended under subsection (4)), apply to a judge of the District Court for an order extending the period of validity of the warrant and such an application shall be grounded upon information on oath laid by the authorised officer stating, by reference to the purpose or purposes for which the warrant was issued, the reasons why the authorised officer considers the extension to be necessary.

(4) If the judge of the District Court is satisfied that there are reasonable grounds for believing, having regard to that information so laid, that further time is needed so that the purpose or purposes for which the warrant was issued can be fulfilled, the judge may make an order extending the period of validity of the warrant by such period as, in the opinion of the judge, is appropriate and just; and where such an order is made, the judge shall cause the warrant to be suitably endorsed to indicate its extended period of validity.

(5) Nothing in the preceding subsections prevents a judge of the District Court from issuing, on foot of a fresh application made under subsection (1), a further search warrant under this section in relation to the same premises.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 28:

In page 14, before section 20, to insert the following new section:

29.—(1) An authorised officer may attend any meeting relating to the business of a regulated financial service provider if the authorised officer considers that it is necessary to attend in order to assist the Bank in the performance of any of its functions under financial services legislation.

(2) The attendance of an authorised officer pursuant to subsection (1) at a meeting referred to in that subsection does not in any circumstances limit the powers of the authorised officer or of the Bank.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 29:

In page 14, before section 20, to insert the following new section:

“CHAPTER 4

Supplementary

30.—(1) The provision to the Bank or an authorised officer of any information, record or other document by a person under this Part shall not be treated, for any purpose, as a breach of any restriction under any enactment or rule of law on provision by the person or any other person on whose behalf the information, record or other document is provided.

(2) Where a person required under this Part to provide a record or other document claims a lien on it, the provision of it shall be without prejudice to the lien.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 30:

In page 14, before section 20, to insert the following new section:

31.—(1) If any person to whom this Part applies fails or refuses to comply with a requirement imposed by the Bank or an authorised officer under this Part, the Bank or the authorised officer may certify the failure or refusal to the High Court.

(2) When the Bank or an authorised officer certifies a failure or refusal referred to in subsection (1) to the High Court, the High Court may inquire into the case and may make such order (including interim or interlocutory orders) or direction as the High Court thinks fit, after hearing—

(a) any witnesses who may be produced against or on behalf of the person concerned, and

(b) any statement which may be offered in defence.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 31:

In page 14, before section 20, to insert the following new section:

32.—(1) A person commits an offence if he or she—

(a) obstructs or impedes the Bank or an authorised officer in the exercise of any powers under this Part,

(b) without reasonable excuse, does not comply with a requirement imposed under this Part,

(c) in purported compliance with such a requirement, provides information or records or other documents to the Bank or an authorised officer that the person knows to be false or misleading in a material respect, or

(d) falsely represents himself or herself to be an authorised officer.

(2) A person who commits an offence under this section is liable—

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(b) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years, or both.

(3) If a person refuses to answer a question asked of him or her or to comply with any other requirement made, under this Part, on the grounds that the answer or compliance with the requirement might tend to incriminate the person and the person is informed of his or her obligation to answer the question or to comply with the requirement, the person shall not refuse to answer the question or to comply with the requirement but the answer given or information provided on that occasion shall not be admissible as evidence in criminal proceedings against the person other than proceedings against him or her under this section.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 32:

In page 14, before section 20, to insert the following new section:

33.—(1) In this section—

“the Court” means the High Court;

“privileged legal material” means information which, in the opinion of the High Court, a person is entitled to refuse to produce on the grounds of legal professional privilege.

(2) If a person refuses to produce information or give access to it, pursuant to a request from an authorised officer under this Part, on the grounds that the information contains privileged legal material, the Bank may, at any time within 6 months (or such longer period as the Court may allow) of the date of such refusal, apply to the Court for a determination as to whether the information, or any part of the information, is privileged legal material where—

(a) in relation to the information concerned—

(i) the Bank has reasonable grounds for believing that it is not privileged legal material, or

(ii) due to the manner or extent to which such information is presented together with any other information, it is impossible or impractical to extract only such information, and

(b) the Bank has reasonable grounds to suspect that the information contains evidence relating to the commission of a prescribed contravention or an offence under financial services legislation.

(3) A person who refuses to produce information or give access to it, pursuant to a request from an authorised officer under this Part, on the grounds that the information contains privileged legal material shall preserve the information and keep it in a safe and secure place and manner pending the determination of an application under subsection (2) and shall, if the information is so determined not to be privileged legal material, produce it in accordance with such order as the Court considers appropriate.

(4) A person shall be considered to have complied with the requirement under subsection (3) to preserve information, where the person has complied with such requirements as may be imposed by an authorised officer under paragraph (g) or (h) of section 27(1).

(5) Where an application is made by the Bank under subsection (2), the Court may give such interim or interlocutory directions as the Court considers appropriate including, without prejudice to the generality of the foregoing, directions as to the appointment of a person with suitable legal qualifications possessing the level of experience, and the independence from any interest falling to be determined between the parties concerned, that the Court considers to be appropriate for the purpose of—

(a) examining the information, and

(b) preparing a report for the Court with a view to assisting or facilitating the Court in the making by the Court of its determination as to whether the information is privileged legal material.

(6) An application under subsection (2) shall be by motion and may, if the Court so directs, be heard otherwise than in public.”.

Amendment agreed to.

Sections 20 to 31, inclusive, deleted.

NEW SECTIONS

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 33 and 34 are related and will be discussed together by agreement.

Deputy Michael Noonan

I move amendment No. 33:

In page 20, before section 32, to insert the following new section:

“PART 4

AUDITOR ASSURANCE

32.—The Central Bank Act 1997 is amended by inserting the following new section after section 27B:

27BA.—(1) Where the Bank considers it necessary owing to the nature, scale or complexity of the activities of a regulated financial service provider, it may, by notice in writing to the auditor of the regulated financial service provider, require the auditor to conduct an examination for the purpose of providing to the Bank a statement as to the extent to which the regulated financial service provider has complied with obligations imposed by or under such provisions of financial services legislation as are specified in the notice.

(2) The notice—

(a) shall be given not less than 3 months before the date on which the auditor’s report on the regulated financial service provider’s accounts is due to be submitted to the Bank, and

(b) shall specify the standards in accordance with which the examination is to be conducted.

(3) The auditor shall conduct an examination in accordance with the notice and during the examination shall undertake such testing procedures and obtain such information as the auditor thinks appropriate.

(4) The auditor shall, not more than 2 months after the date on which the auditor’s report on the relevant regulated financial service provider’s accounts is due to be submitted to the Bank, provide to the Bank a statement outlining the findings of the examination (including, in particular, the outcome of the testing procedures undertaken, and the evidence obtained, by the auditor during the examination).

(5) If the auditor is not satisfied that the regulated financial service provider has complied with an obligation imposed under or by virtue of the provisions of financial services legislation specified in the notice, the auditor shall include in the statement the reasons why the auditor is not so satisfied.

(6) The Bank may make regulations prescribing the obligations imposed by or under provisions of financial services legislation any or all of which may be specified in a notice under subsection (1).

(7) The Bank may prescribe an obligation imposed by or under a provision of financial services legislation in regulations under subsection (6) if and only if the provision concerns—

(a) administrative or accounting procedures of regulated financial service providers,

(b) internal control mechanisms of, or risk management by, regulated financial service providers, or

(c) the organisational structure or governance of regulated financial service providers.

(7) Before making regulations under this section the Bank shall consult the Minister and the Minister for Jobs, Enterprise and Innovation.

(8) In specifying under subsection (2)(b) the standards in accordance with an examination is to be conducted, the Bank shall have regard to internationally recognised standards for assurance and auditing.”.”.

These amendments allow the Central Bank to require auditors to provide a report on issues such as internal controls, accounting practices and governance. They follow on from earlier recommendations in the Comptroller and Auditor General's reports.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 34:

In page 20, before section 32, to insert the following new section:

33.—Section 27G of the Central Bank Act 1997 is amended—

(a) in subsection (1) by inserting “27BA(4) or (5),” after “section 27B(2),”, and

(b) in subsection (3) by inserting “27BA,” after “section 27B,”.”.

Amendment agreed to.

SECTION 32

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 35, 37 and 38 are related and will be discussed together by agreement.

Deputy Michael Noonan

I move amendment No. 35:

In page 20, subsection (1), between lines 20 and 21, to insert the following:

“ “contract of employment” means a contract of employment or of service or of apprenticeship, whether the contract is express or implied and, if express, whether it is oral or in writing;”.

These amendments relate to the provisions on what constitutes penalisation of a whistleblower and mirror the language used in employment law.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 36:

In page 20, subsection (1), to delete lines 21 to 30.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 37:

In page 21, subsection (1), between lines 4 and 5, to insert the following:

“(b) the threat of suspension, lay-off or dismissal,”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 38:

In page 21, subsection (1), line 14, before “reprisal” to insert “threats of”.

Amendment agreed to.

Section 32, as amended, agreed to.

NEW SECTION

Deputy Michael McGrath

I move amendment No. 39:

In page 21, before section 33, to insert the following new section:

“33.—The Bank shall investigate any information provided to it by way of a protected disclosure under Part V.”.

The protected disclosure is defined in section 33 of the Bill, providing for circumstances where a whistleblower would bring information to the attention of the Central Bank. The purpose of my amendment is to establish whether there is an onus on the Central Bank to investigate the subject matter of the complaint submitted by the whistleblower.

Deputy Michael Noonan

I can appreciate the concern expressed by Deputy Michael McGrath in raising this amendment. It is important that where key information comes to the attention of the Central Bank it is taken seriously and acted upon. There are examples in the past where whistleblowers have made reports to the Central Bank in good faith and in the public interest without any further action from the Central Bank or protection for the person concerned. In the case of Mr. Eugene McErlean, the deputy governor, Mr. Matthew Elderfield has already issued a public apology on behalf of the Central Bank.

There is a balance to be struck here. On the one hand we would all expect the Central Bank to take action, where warranted, however other disclosures could be routine or minor, not to mention the possibility of frivolous or vexatious claims. The Central Bank will receive information from many sources - authorised officers, firms, auditors, skilled person reports, information requests, inspections, etc. It is important that action is taken based on the seriousness of the issue and an assessment of the risks involved. A blanket requirement to act on all whistleblower disclosures which would not apply to information received through other channels may be a little black and white to work effectively.

I have, however, some sympathy for the point raised by the Deputy and will ask my Department to consult with the Attorney General's office on the scope for an appropriate Report Stage amendment here. Perhaps we could include a requirement for Central Bank officials to report to the Central Bank Commission on the action taken on foot of disclosures and to explain cases where no further action was taken. This would allow for oversight of Central Bank officials by the Central Bank Commission, which is its function, but would also allow reasonable scope for information to be reviewed and assessed before deciding if further action is required. I will put that to the Attorney General and see if we can frame an appropriate amendment to meet the well-made point of Deputy Michael McGrath.

Deputy Michael McGrath

I thank the Minister. I accept that my amendment was blunt, but he understands the principle underlying it. Nobody wants the Central Bank to be bogged down in bureaucracy and undertaking unnecessary investigations. We are all sent a great deal of material by aggrieved persons on various issues. It is impossible to investigate all of the complaints made, but there should be traceability of complaints made to the bank, provided they are regarded as having substance. I withdraw my amendment and await the Minister's amendment on Report Stage.

Deputy Michael Noonan

I thank the Deputy.

Amendment, by leave, withdrawn.

SECTION 33

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 40 to 42, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 40:

In page 22, subsection (2)(a), line 8, to delete “knows or believes might be” and substitute “believes will be”.

These amendments nuance the compulsory reporting requirement for those with pre-approval control functions and provide for guidelines.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 41:

In page 22, subsection (2), between lines 16 and 17, to insert the following:

“(e) It is a reasonable excuse for the purposes of paragraph (c) for a person to fail to make a disclosure on the ground that the information has already been disclosed by another person.

(f) Paragraphs (d) and (e) do not limit what is a reasonable excuse for the purposes of paragraph (c).”.

Amendment agreed to.

Section 33, as amended, agreed to.

NEW SECTION

Deputy Michael Noonan

I move amendment No. 42:

In page 22, before section 34, to insert the following new section:

34.—(1) The Bank may, in such form and manner as it considers appropriate, publish guidelines for the purpose of providing practical guidance for persons referred to in subsection (2)(a) of section 33 relating to the application and operation of that section with respect to those persons, including guidelines as to the assessment by such persons as to whether a disclosure is required to be made.

(2) The guidelines may include different provisions in respect of different classes of persons referred to in section 33(2)(a).”.

SECTION 34

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 43:

In page 22, lines 34 to 37, to delete subsection (5) and substitute the following:

“(5) Subject to any enactment or rule of law, the Bank may not disclose the identity of a person who has made a protected disclosure without first obtaining the person’s consent except in so far as it may be necessary—

(a) for the effective investigation of any matter to which the disclosure relates,

or

(b) for the purposes of—

(i) an inquiry by the Bank under section 33AO or 33AR of the Act of 1942,

(ii) subject to section 57W of the Act of 1942, an appeal to the Appeals Tribunal under Part VIIA of the Act of 1942,

(iii) an assessment under Part 5 of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (S.I. No. 342 of 2005),

(iv) an assessment under Part 15 of the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005),

(v) an assessment under Part 10 of the Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. No. 277 of 2007), or

(vi) investigations and hearings under Part 3 of the Central Bank Reform Act 2010,

in relation to any matter to which the disclosure relates.”.

The amendment sets out the situations where the Central Bank may disclose the identity of a whistleblower, namely, where to do so is necessary for an investigation or various forms of inquiry or appeal.

Amendment agreed to.

Section 34, as amended, agreed to.

SECTION 35

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 45, 46 and 137 to 145, inclusive, are related to amendment No. 44 and will be discussed together.

Deputy Michael Noonan

I move amendment No. 44:

In page 23, between lines 22 and 23, to insert the following subsection:

“(5) (a) If penalisation of an employee, in contravention of subsection (1), constitutes a dismissal of the employee, as referred to in paragraph (a) of the definition of “penalisation” in section 32, the employee (or, in the case of an employee who has not reached the age of 18 years, the employee’s parent or guardian, with the employee’s consent) may institute proceedings in respect of that dismissal under the Unfair Dismissals Acts 1977 to 2007 or to recover damages at common law for wrongful dismissal and, if the employee or his or her parent or guardian, as the case may be, does so, a complaint of such dismissal may not be presented to a rights commissioner under paragraph 1(1) of Schedule 5.

(b) If an employee (or, in the case of an employee who has not reached the age of 18 years, the employee’s parent or guardian, with the employee’s consent) presents a complaint to a rights commissioner under paragraph 1(1) of Schedule 5 in respect of a dismissal referred to in paragraph (a), the employee or his or her parent or guardian, as the case may be, may not institute proceedings in respect of that dismissal under the Unfair Dismissals Acts 1977 to 2007 or to recover damages at common law for wrongful dismissal.”.

These amendments make various changes to the penalisation provisions as they apply to employee whistleblowers and the recourse they may have through various industrial relations channels. They bring the wording of the Bill into line with the existing precedents in employment law.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 45:

In page 24, subsection (8), line 4, to delete “subsection (6) or (7)” and substitute “subsection (7)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 46:

In page 24, between lines 6 and 7, to insert the following subsection:

“(9) Summary proceedings for an offence under subsection (6) or (7) may be brought and prosecuted by the Minister for Jobs, Enterprise and Innovation.”.

Amendment agreed to.

Section 35, as amended, agreed to.

Section 36 agreed to.

NEW SECTIONS

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 47 and 48 are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 47:

In page 24, before section 37, to insert the following new section:

“PART 5

CUSTOMER PROTECTION

37.—(1) Where the Bank is satisfied—

(a) that there have been widespread or regular relevant defaults by a regulated financial service provider, and

(b) that, in consequence of the relevant defaults, customers of the regulated financial service provider have suffered, are suffering or will suffer loss or damage,

the Bank may give the regulated financial service provider a direction requiring the making of appropriate redress to the customers.

(2) In subsection (1) “relevant default” means—

(a) charging a customer an amount which the regulated financial service provider is not entitled to charge,

(b) providing a customer with a financial service which the customer has not agreed to receive,

(c) providing a customer with a financial service which was not suitable for the customer at the time when it was provided,

(d) providing a customer with inaccurate information which influences the customer in making a decision about any financial service,

(e) a failure of any system or controls of the regulated financial service provider, or

(f) a prescribed contravention.

(3) In subsection (1) “appropriate redress” means such monetary or other redress as is specified in the direction and (in the case of redress for pecuniary loss) as does not exceed the amount of the loss suffered or anticipated to be suffered, together (where appropriate) with interest at such rate as is so specified.

(4) A direction given under subsection (1) may require the costs of the Bank in giving the direction to be met by the regulated financial service provider to whom the direction is given.

(5) The fact that a regulated financial service provider has made redress in compliance with a direction given under subsection (1) shall not, of itself, constitute for any purpose an admission of liability by the regulated financial service provider.

(6) A decision by the Bank to give a direction under subsection (1) is an appealable decision for the purposes of Part VIIA of the Act of 1942.

(7) The provisions of a direction given under subsection (1) have effect from the date specified in the direction in relation to them.

(8) A direction given under subsection (1) shall set out—

(a) all terms of the direction, including any specification of a date by which, or a period within which, any provision made by it is to be complied with, and

(b) any incidental, consequential or supplemental provisions for implementing the direction and securing that it is fully and effectively carried out.

(9) The Bank may publish a direction given under subsection (1) in any such manner as the Bank considers appropriate.

(10) Where the Bank is considering a complaint, or investigating any other matter, for the purpose of deciding whether to give a direction under subsection (1) it may publish notice that it is doing so in any such manner as the Bank considers appropriate.

(11) The duty imposed on the Bank by section 57BX(11) of the Act of 1942 to refer a complaint to the Financial Services Ombudsman does not apply in relation to a complaint if the Bank has dealt with the complaint by giving a direction under subsection (1) or during any period when the Bank is considering the complaint for the purpose of deciding whether to give such a direction.

(12) The duty imposed on the Financial Services Ombudsman to investigate a complaint does not apply if the Bank has dealt with the complaint by giving a direction under subsection (1) or during any period when the Bank is considering the complaint for the purpose of deciding whether to give such a direction.”.

This amendment provides for a system of customer redress where financial service providers engage in misconduct that is widespread or recurring and causes customers loss or damage. The amendments also provides that a failure by a financial service provider to comply with regulatory requirements may be actionable by a customer who suffers loss or damage.

Deputy Pearse Doherty

I am happy with the section, but we are moving at a fast pace. I have no problem with this, but I would like to raise something in retrospect with regard to the disclosure of a whistleblower.

Acting Chairman (Deputy Arthur Spring)

I am advised that I cannot go back once a section has been discussed.

Deputy Michael Noonan

If the Deputy does not mind, I will deal with the matter on Report Stage if he tables an amendment.

Acting Chairman (Deputy Arthur Spring)

I am advised that when we discuss the Title, the Deputy can raise the issue then.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 48:

In page 24, before section 37, to insert the following new section:

38.—A failure by a regulated financial service provider to comply with any obligation under financial services legislation is actionable by any customer of the regulated financial service provider who suffers loss or damage as a result of such failure.”.

Amendment agreed to.

SECTION 37

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 49 to 51, inclusive, 53 to 57, inclusive, and 59 to 61, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 49:

In page 26, between lines 11 and 12, to insert the following subsection:

“(4) Where the Bank gives a direction under subsection (1) to a regulated financial service provider or a related undertaking (in this subsection referred to as the “principal provider”), the Bank may, where it considers it necessary for the purpose of securing compliance with that direction, give a direction in writing to any regulated financial service provider at which the principal provider holds an account of any description to cease making payments from, or entering into or performing other transactions in respect of, such account without the prior authorisation of the Bank.”.

These amendments set out a range of technical provisions related to directions and appeals.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 50:

In page 26, subsection (4), line 12, after “direction” to insert “under subsection (1) or (4)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 51:

In page 26, subsection (5), line 14, after “direction” to insert “under subsection (1) or (4)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 52:

In page 26, between lines 20 and 21, to insert the following subsection:

“(6) If the Bank gives a direction under subsection (1) or (4) the intention of which, or part of which, is the preservation or restoration of the financial position of a credit institution within the meaning of Directive 2001/24/EC of the European Parliament and of the Council of 4 April 20011 and which is capable of affecting the rights of third parties existing before the direction comes into effect, the Bank shall declare in the direction that the direction or part of it is made with that intention, in accordance with that Directive.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 53:

In page 26, subsection (6), line 21, after “direction” to insert “under subsection (1) or (4)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 54:

In page 26, subsection (7), line 24, to delete “under this section” and substitute “under paragraph (a) or (b) of subsection (3)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 55:

In page 26, between lines 25 and 26, to insert the following subsection:

“(8) A regulated financial service provider to whom a direction is given under subsection (4) may apply to the High Court for an order setting aside the direction.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 56:

In page 26, between lines 31 and 32, to insert the following subsection:

“(9) An application under subsection (8) shall be made to the High Court within 14 days beginning on the date of receipt of the direction by the regulated financial service provider or such further period as the High Court considers just and equitable in the circumstances, and the High Court may make any interim or interlocutory order as it considers appropriate.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 57:

In page 26, subsection (9), line 35, to delete “subsection (7)” and substitute “subsection (7) or (8)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 58:

In page 26, between lines 36 and 37, to insert the following subsection:

“(10) A decision by the Bank to issue a direction under any of paragraphs (c) to (g) of subsection (3) is an appealable decision for the purposes of Part VIIA of the

Central Bank Act 1942.”.

Amendment agreed to.

Section 37, as amended, agreed to.

SECTION 38

Deputy Michael Noonan

I move amendment No. 59:

In page 26, subsection (1), line 37, after “under” to insert “subsection (1) or (4) of”.

Amendment agreed to.

Section 38, as amended, agreed to.

SECTION 39

Deputy Michael Noonan

I move amendment No. 60:

In page 27, subsection (1), line 15, after “under” to insert “subsection (1) or (4) of”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 61:

In page 27, subsection (2), line 21, after “under” where it secondly occurs to insert “subsection (1) or (4) of”.

Amendment agreed to.

Section 39, as amended, agreed to.

SECTION 40

Deputy Michael Noonan

I move amendment No. 62:

In page 28, subsection (2)(c), line 6, to delete “employees and agents” and substitute “employees, agents and intermediaries”.

Amendment agreed to.

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 63 to 68, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 63:

In page 28, subsection (2)(f)(i), line 24, to delete “promotional literature” and substitute “promotional material (in whatever media)”.

These amendments deal with Central Bank regulation making powers on the provision of information for customers.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 64:

In page 28, subsection (2)(f), to delete lines 27 to 29 and substitute the following:

“(ii) the giving of specified information about the regulated financial service provider and the financial services provided by it,”

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 65:

In page 28, subsection (2)(f), between lines 36 and 37, to insert the following:

“(v) the giving to customers of information about incentives in relation to financial services, including as to the advantages and disadvantages of taking up the incentives, the duration of their availability, the assumptions on which they are based, their cost, any other material information which customers should have for deciding whether to take them up and the desirability of seeking of independent advice before taking them up,”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 66:

In page 29, subsection (2), between lines 18 and 19, to insert the following:

“(i) provision specifying requirements which are to apply in relation to the provision of financial services to customers for the purpose of determining the suitability of the financial services for the customers;

(j) provision about the management of conflicts of interest that may arise as between customers and regulated financial service providers, their officers, employees, agents or intermediaries or related undertakings, in the provision of financial services;”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 67:

In page 29, subsection (2)(j), between lines 37 and 38, to insert the following:

“(iv) requiring the giving of notification to persons giving security or guarantees in respect of loans, other credit facilities or other financial services of changes in the terms of the loans, other credit facilities or other financial services,”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 68:

In page 30, subsection (2), between lines 20 and 21, to insert the following:

“(l) provision requiring—

(i) the giving of reasons for refusals to provide quotations for insurance cover applied for and for not accepting claims under policies or contracts of insurance,

(ii) the giving of notification in relation to decisions on claims under policies and contracts of insurance and in relation to the carrying out of work to repair property under such policies and contracts including the cost and scope of such work and its certification, and

(iii) the giving of information in relation to appeals procedures;

(m) provision requiring the giving of statements of account by regulated financial service providers to customers in respect of financial services, including the information to be given in such statements and the form and frequency of, and manner in which, such statements may be given;”.

Amendment agreed to.

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 69 to 71, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 69:

In page 30, subsection (2), to delete lines 38 to 40 and substitute the following:

“(n) provision about how regulated financial service providers are to deal with customers who are or are likely to be in financial difficulty (including customers who are or are likely to be in arrears) including, in relation to such customers provision—”.

These amendments deal with the Central Bank regulations on customers in arrears.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 70:

In page 30, subsection (2)(n)(i), line 42, to delete “customers in arrears” and substitute “such customers”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 71:

In page 30, subsection (2)(n)(ii), line 44, to delete “customers in arrears” and substitute “such customers”.

Amendment agreed to.

Section 40, as amended, agreed to.

NEW SECTION

Deputy Michael Noonan

I move amendment No. 72:

In page 32, before section 41, to insert the following new section:

41.—(1) Before making regulations under section 40, the Bank—

(a) shall consult with the Minister and for that purpose shall provide to the Minister a draft of the proposed regulations,

(b) in the case of regulations under section 40(2)(b), shall also consult with the Minister for Enterprise, Jobs and Innovation and for that purpose shall provide to that Minister a draft of the proposed regulations, and

(c) may consult with such other persons as the Bank considers appropriate to consult in the circumstances.

(2) (a) This subsection applies to credit unions acting under an authorisation from the Bank under Part II of the Credit Union Act 1997.

(b) Before making regulations under section 40 in respect of credit unions to which this subsection applies, the Bank shall also consult with—

(i) the Credit Union Advisory Committee (within the meaning of the Credit Union Act 1997), and

(ii) any other body that appears to the Bank to have expertise or knowledge of credit unions.”.

This amendment relates to the consultation requirements on Central Bank regulations, including provision for consultation with credit unions in line with the equivalent arrangements in credit union legislation

Amendment put and declared carried.

Section 41 deleted.

Sections 42 and 43 agreed to.

NEW SECTIONS

Acting Chairman (Deputy Arthur Spring)

Amendments Nos. 87 to 94, inclusive, are alternatives to amendment No. 73. Amendments Nos. 73 and 87 to 94, inclusive, may be discussed together.

Deputy Michael McGrath

I move amendment No. 73:

In page 33, before section 44, but in Part 6, to insert the following new section:

“44.—Part V of the Central Bank Act 1997 is amended by the insertion of the following after section 36:

“36A.—The Bank shall be the authority in the State for the authorisation of debt management advisors.

36B.—It shall be an offence for a company registered or operating in the State or any other person or partnership operating in the State to act as a debt management advisor, or to claim or to hold themselves out to be a debt management advisor, in the State or outside the State unless it is acting under and within the terms of an authorisation to do so under sections 36C or 36D.

36C.—(1) Subject to the provisions of this Act, the Bank may grant or refuse to grant to any person or partnership or company applying to it under this section an authorisation to operate as a debt management advisor.

(2) The grant of an authorisation under subsection (1) of this section may be given unconditionally or it may be given subject to such conditions, including conditions limiting the duration of authorisation, or requirements or both as the Bank considers fit.

(3) Whenever the Bank refuses to grant authorisation to a proposed debt management advisor under this section it shall serve notice on the proposed debt management advisor of its intention to refuse to authorise it and stating the reasons therefore, and the proposed debt management advisor may within 21 days of receipt of such notice appeal to the Court against the decision.

(4) An application for authorisation under subsection (1) of this section shall be in such form and contain such particulars as the Bank shall specify from time to time and, without prejudice to the generality of the aforesaid, shall include such particulars or information as the Bank may request in relation to:

(a) the type of business to be carried on or likely to be carried on by the proposed debt management advisor;

(b) any person or persons having a qualifying shareholding or having control or ownership of the proposed debt management advisor including any natural or legal person whose shareholding or other commercial relationship with the proposed debt management advisor might influence the conduct of the proposed debt management advisor to a material degree; and

(c) if the proposed debt management advisor is a company, the Memorandum of Association and Articles of Association of the proposed debt management advisor.

(5) A proposed debt management advisor shall not be authorised by the Bank under this section unless—

(a) if it be a company, that it be incorporated by statute or under the Companies Acts, or is incorporated outside the State;

(b) if it be an unincorporated body of persons, that they be governed by a partnership agreement;

(c) if it be a sole trader, that he or she satisfies the Bank as to the probity and competence of the sole trader;

(d) if it be a company or partnership, that it satisfies the Bank as to the probity and competence of each of the directors and/or managers and/or partners of the company or partnership;

(e) it satisfies the Bank as to the suitability of each of its qualifying shareholders;

(f) it provides to the Bank details of the proposed fees and charges that it will impose for the provision of debt management advice;

(g) it provides to the Bank a current Tax Clearance Certificate; and

(h) it provides whatever other information that the Bank deems is appropriate for the purpose of assessing the probity and reliability of the debt management advisor.

(6) A proposed debt management advisor shall be informed whether or not authorisation has been granted—

(a) within two months of the date of receipt of the application or within two months of the coming into operation of this section, whichever is the later, or

(b) where additional information in relation to the application has been sought by the Bank, within a period of two months after the receipt by the Bank of the additional information or the period of six months after the receipt of the application, whichever is the sooner.

(7) The Bank may impose conditions or requirements or both on an authorised debt management advisor which is constituted as a partnership or sole trader, in order to achieve an equivalent level of supervision to that pertaining to an authorised debt management advisor which is constituted as a corporate body.

(8) It shall be an offence for a proposed debt management advisor or any other person to apply for authorisation under this section knowingly or recklessly using false or misleading information, or knowingly or recklessly making false or misleading statements, in relation to an application for an authorisation under this section.

(9) On receipt of its authorisation from the Bank, an authorised debt management advisor shall, prior to entering into any agreement to provide debt management advice to a consumer, present to that consumer for whom it is providing debt management advice a copy of the authorisation granted by the Bank.

36D.—(1) A person who is a debt management advisor on the day immediately prior to the coming into operation of this section and who is not deemed to be authorised under section 36C may stand authorised, on the coming into operation of this section, as an authorised debt management advisor until the Bank has granted or refused authorisation to it provided that, no later than two months after the coming into operation of this Part, it applies to the Bank under section 36C for authorisation, and, in that section, references to a proposed debt management advisor shall be construed accordingly.

(2) Pending a decision by the Bank to authorise a debt management advisor to whom subsection (1) of this section refers, or during the two months referred to in subsection (1) of this section, or during both such times, the Bank may do all or any of the following, namely:

(a) impose such conditions or requirements or both as it thinks fit relating to the proper and orderly regulation and supervision of the debt management advisor or in relation to the protection of consumers,

(b) issue directions under this Act.

(3) A person to whom subsection (1) of this section refers may appeal to the Court against the conditions or requirements imposed under this section. On hearing an application under this subsection of this section, the Court may confirm, vary or rescind any condition or requirement imposed under this section.

36E.—(1) The Bank may revoke the authorisation of an authorised debt management advisor where—

(a) a request is made to it to do so by the authorised debt management advisor, or

(b) an authorised debt management advisor—

(i) has failed to operate as a debt management advisor within twelve months of the date on which it was authorised under this Act, or

(ii) has failed to operate as a debt management advisor for a period of more than six months, or

(iii) if it is a company, is being wound up,

(c) it is expedient to do so in the interests of the proper and orderly regulation and supervision of debt management advisors or in order to protect consumers,

(d) an authorised debt management advisor or one of its directors and/or partners has been convicted on indictment of any offence under this Act or any offence involving fraud, dishonesty or breach of trust,

(e) circumstances have materially changed since the granting of the authorisation such that if an application for authorisation were made at the time when the circumstances had materially changed, a different decision would be taken in relation to the application for authorisation,

(f) the authorisation was obtained by knowingly or recklessly making false or misleading statements, or by knowingly or recklessly using false or misleading information,

(g) an authorised debt management advisor has systematically failed to comply with the condition or requirement of this Act,

(h) an authorised debt management advisor no longer fulfils any or all of the conditions or requirements which were imposed when the authorisation was granted or which were subsequently imposed,

(i) an authorised debt management advisor becomes unable or, in the opinion of the Bank, is likely to become unable to provide any proper or reliable debt management advice to consumers.

(2) The Bank shall publish notice of revocation of an authorisation of an authorised debt management advisor in Iris Oifigiúil within fourteen days of such revocation.

(3) Where the Bank revokes an authorisation of an authorised debt management advisor, the debt management advisor may apply to the Court within twenty eight days of such revocation for an Order varying or setting aside the revocation on such terms as the Court thinks fit.

36F.—(1) The Bank shall administer the system of regulation and supervision of debt management advisors in accordance with the provisions of this Act in order to promote—

(a) the maintenance of the proper and orderly regulation and supervision of debt management advisors, and

(b) the protection of consumers.

(2) Where the Bank is of the opinion that it is necessary in the interests of assessing the capacity of an authorised or proposed debt management advisor to provide debt management advice, it may commission an independent assessment of the capacity of the proposed debt management advisor or the authorised debt management advisor.

(3) Subject to subsection (4) of this section, the Minister may, after consulting with the Bank, prescribe by regulation the fee to be paid to the Bank by a proposed debt management advisor or by an authorised debt management advisor supervised by it and the Minister may prescribe different fees for different classes of debt management advisors.

36G.—(1) Without prejudice to the powers of the Bank to impose conditions or requirements or both under this Act, and, without prejudice to the powers of the Bank under subsections (2) or (3) of this section, where the Bank considers it necessary to do so in the interests of the proper and orderly regulation and supervision of debt management advisors and for the protection of investors, the Bank may give a direction to any or all authorised debt management advisors or any or all proposed debt management advisors in relation to any matter related to the operation of the provision of debt management advice.

(2) Without prejudice to the powers of the Bank under subsection (1) of this section, and without prejudice to the powers of the Bank to impose conditions or requirements or both under this Act, where the Bank is of the opinion that it is necessary to do so in the interests of the proper and orderly regulation and supervision of debt management advisors or for the protection of investors or both, the Bank may give a direction in writing to the debt management advisor concerned to suspend for such period (not exceeding twelve months) the provision of any debt management advice.

(3) Without prejudice to the powers of the Bank to impose conditions or requirements or both under subsections (2) and (7) of section 36C, an authorised debt management advisor shall, upon engagement by a consumer, and before the provision of any debt management advice—

(a) advise the consumer in writing of the existence, role and function of the Money Advice and Budgeting Service, and

(b) set out in writing the fees and costs to be charged, in accordance with the debt management advisor’s authorisation, for the provision of debt management advice.

36H.—It shall be an offence for a debt management advisor to receive from or hold on behalf of a consumer to whom it is providing debt management advice any monies other than monies paid by the consumer for the provision of debt management advice.

36I.—(1) The Bank shall, after consultation with the Minister, publish a code of practice in relation to debt management advisors and the provision of debt management advice and it shall be a condition of authorisation of all debt management advisors that they shall comply with the terms of the code of practice.

(2) The Bank shall publish the code of practice concerning the provision of debt management advice within six months from the coming into force of this section.

(3) In drawing up the code of practice in relation to the provision of debt management advice, the Bank shall have regard to—

(a) the interest of consumers and the general public,

(b) the vulnerable position that debtors may find themselves in because of the significant decline in property values between 2006 and the date of coming into force of this Act,

(c) any submissions made by authorised debt management advisors.

(4) It shall be an offence for a debt management advisor not to comply with the Code of Practice published by the Bank.

36J.—(1) A person who contravenes sections 36A to 36H is guilty of an offence and shall be liable—

(a) on summary conviction to a fine not exceeding €5,000 or, at the discretion of the Court in the case of an individual, to imprisonment for a term not exceeding twelve months, or both, or

(b) on conviction on indictment, to a fine not exceeding €100,000 or, at the discretion of the Court in the case of an individual, to imprisonment for a term not exceeding five years, or both.”.”.

As the Minister knows this area relates to the regulation of firms offering debt-management services and debt advice. I am delighted this issue is finally about to be tackled. I would have liked to have seen it done some time ago. We published a Bill in 2011 addressing the regulation of this sector. It passed Second Stage, but did not progress further. I am glad it is now being done. I will keep my comments brief at this stage.

While the Central Bank does not have a full set of tools available to it at this point, it has nonetheless been very active in the area. I understand the number of firms offering such services has reduced quite significantly, not least because of the enforcement activity the Central Bank has undertaken. The sector has been squeezed. We all know of the cases that went so badly wrong with people unfortunately losing a lot of money including Home Payments Limited and a number of others. Many people relying on the services of such firms are quite vulnerable.

For a number of years we have needed this area to be regulated and monitored, especially where firms are handling people's money. Where people put their trust in firms to negotiate with their creditors and to handle their money there is a very strong onus on the Government to ensure that area is regulated and to introduce some transparency on fees. Through the years these companies often made great promises about what they could negotiate with their creditors to have debt reduced. People were paying into these firms and finding out subsequently that a good proportion of the money that went in went to the fees of the firms. I look forward to the debate. I am glad that this area will finally be regulated.

Deputy Michael Noonan

I know that this is an area in which the Deputy is particularly interested and it was the subject of a Private Members' Bill he introduced. We had a number of debates about this previously and I am pleased that the commitments I gave on that occasion are being fulfilled now. The Deputy's amendment relates to debt-management companies and I have also tabled a series of amendments.

Deputies will be aware of the Private Members’ Bill I mentioned that was discussed in the House last year. The Government promised that legislation would be brought forward to provide for the regulation of debt management and debt advice companies. This is now being done.

Part V of the Central Bank Act 1997 will be amended to provide for a regulatory regime for the services of debt advice and debt management firms that currently fall outside existing regulatory regimes. This will be achieved by incorporating a new category of regulated business into the existing regulatory framework in Part V of the Act, thereby extending the application of the provisions of financial services law that currently apply to regulated financial service providers to debt management and debt advisory firms. A debt management firm is defined in the amendment as a person who, for remuneration, provides debt management services to one or more consumers other than an excepted person. A consumer means an individual acting otherwise than in the course of business or a micro enterprise within the meaning given by Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. Debt management services and excepted persons are also defined in the amendment.

It is also proposed to amend the existing definition of "money transmission services" in Part V of the Central Bank Act 1997 in order to clarify and make it clear that money transmission services provided by such debt management firms fall to be regulated.

The Bill also provides for transitional arrangements to apply to existing debt management firms. Such firms will be required to apply to the Central Bank no later than three months after the commencement of the Act for the appropriate authorisation.

The legislation reflects most of Fianna Fáil’s Private Members' Bill. The structure may differ in that it has been incorporated into Part V of the Central Bank Act 1997. The benefits of this structure is that existing provisions in Part V on the imposition of conditions, revocation of authorisations etc. will apply to the firms that will be covered by the new regime. The introduction of this new category of regulated business will subject such firms to the powers and provisions contained in other legislation relating to regulated financial service providers, such as fitness and probity powers in the Central Bank Reform Act 2010, administrative sanction powers under the Central Bank Act 1942 and the supervision and enforcement powers of the Central Bank (Supervision and Enforcement) Bill 2011 when enacted.

Deputy McGrath has proposed to insert a new section 36B making it an offence for a person to hold themselves out, or claim to be, a debt management provider without authorisation. The legislative proposal, if adopted, will provide that the provision of debt management services without an authorisation will be prohibited by virtue of section 29(1) of the 1997 Act. While that is the case, the activity of holding oneself out or claiming to be performing an activity is not the same as performing that activity, and holding oneself out, or claiming to be the holder of an authorisation is not the same as performing the activity. Thus the prohibition contained in section 29 would not prohibit these related types of related conduct. My officials will examine this and discuss the matter with the Office of the Attorney General.

The proposed section 36C(8) would make it an offence to provide false or misleading information with respect to an authorisation. This proposed prohibition does not appear to be contained within either the legislative proposal, or within the existing authorisation regime provided for in Part V. The 1997 Act appears to penalise this conduct through provisions such as section 31(2)(c), which would allow an authorisation to be refused where such information is provided; or section 36A (1)(c), which would allow an authorisation to be removed in such circumstances. My officials will examine this and discuss the matter with the Office of the Attorney General.

The proposed section 36G 3(a) requires an authorised debt management adviser to advise the consumer in writing of the existence, role and function of the Money Advice and Budgeting Service. This not the appropriate place for this provision. These are private companies and it would be disproportionate to place this requirement on them. There are also public bodies to advise consumers with regard to MABS and its role.

That covers most of the points. As I have said, we will have some discussions with the Office of the Attorney General between now and Report Stage.

Deputy Michael McGrath

I thank the Minister for his response and for going through the elements of the Private Members' Bill that have and have not been incorporated here. The Bill we proposed was an honest effort to put the spotlight on the issue and was by no means the finished article.

Do the Minister's amendments comprehensively deal with the issue of firms that provide household budgeting services? There is considerable emphasis on debt management and debt advice. However, for example, Home Payments Limited was not dealing with debt but was merely taking a weekly payment and discharging a person's bills. Is that dealt with under the money transmission services?

Deputy Michael Noonan

Yes. The money transition service's definition includes everything the Deputy wants to have inserted.

Deputy Michael McGrath

Are the Minister and the Central Bank satisfied that the way in which it is being proposed to do this is broadly consistent with the Law Reform Commission's proposals on the regulation of the sector? Is the Central Bank satisfied that it will be adequately equipped by these powers to regulate the sector properly?

Deputy Michael Noonan

Yes, the Central Bank is satisfied that it will be adequately equipped. The Department and the Attorney General's office are of the opinion that knitting this measure into the 1997 Act is the most effective approach. We have taken on board everything proposed in the Deputy's Private Members' Bill. I thank him for his work on that occasion.

Deputy Pearse Doherty

Are we discussing the Minister's amendments to the section? I wish to make a couple of points.

Vice Chairman

No, we are discussing amendment No. 73 in the name of Deputy Michael McGrath.

Deputy Pearse Doherty

Amendments Nos. 73 and 87 to 94, inclusive, are being discussed together.

Vice Chairman

Does the Deputy wish to refer to amendments Nos. 74 and 75?

Deputy Pearse Doherty

Yes. They are the Minister's amendments.

Vice Chairman

They are not included in this grouping. We have not reached them yet.

Deputy Pearse Doherty

I am lost.

Vice Chairman

We are on the same section.

Deputy Michael McGrath

Amendments Nos. 73 and 87 to 94, inclusive, are being discussed together.

Deputy Pearse Doherty

The Minister's proposals are included in amendments Nos. 87 to 94, inclusive.

Vice Chairman

Yes. They are alternatives to amendment No. 73. My apologies, amendments Nos. 73 and 87 to 94, inclusive, are being discussed together.

Deputy Pearse Doherty

No problem. I welcome the Minister's amendments and wish to ask some short questions to seek clarification. There will be "excepted persons" under the new section 48. For example, a number of established groups - New Beginning, the Irish Mortgage Association, IMA, etc. - fall within the definitions of giving advice on the discharge of debt and negotiating with creditors. Do they also fall within the definition of excepted persons or will they fall under this provision and be regulated by the Central Bank?

Deputy Michael Noonan

We are unsure about New Beginning. I will check the matter for the Deputy before Report Stage. We are regulating persons who handle other people's money in one way or another.

Deputy Pearse Doherty

I will ask the question in another way. Is it the intention to regulate organisations such as the IMA or New Beginning which give free advice to persons in mortgage distress?

Deputy Michael Noonan

Some are exempted, for example, charities. If a body is instituted as a charity, it is exempt. If a body gives advice on a commercial basis, it has not instituted as a charity. The best way to explain it is that if there is no remuneration for the giving of advice, the advice's provider is usually an excepted person. If there is remuneration, the person is included.

Deputy Pearse Doherty

The Minister's definition of "no remuneration for the giving of advice" would not necessarily allow persons to attain charitable status.

Deputy Michael Noonan

As long as they are not charging, they do not need charitable status to be exempt.

Deputy Pearse Doherty

Nowhere in the relevant subsections is it stated an organisation that is not a charity will be exempt.

Deputy Michael Noonan

I am told that it is stated in the definitions section under the definition of "remuneration". The Bill reads: "'debt management firm' means a person who for remuneration provides debt management services to one or more consumers, other than an excepted person". If a person does not charge, he or she does not fall within the definition and is allowed to provide the information for free.

Deputy Pearse Doherty

My second query is on the fees to be applied by debt management agencies. Under this regulation, will that database be held centrally by the Central Bank and will the information be published to support consumer protection and the process of transparency?

Deputy Michael Noonan

The system is that run from the Central Bank Act 1942. The fees are set by the Central Bank, with the consent of the Minister for Finance.

Deputy Pearse Doherty

The fees and charges applied by debt management companies must be authorised by the Central Bank, but will there be a public register?

Deputy Michael Noonan

As I understand it, they must inform their customers of the scale of fees. It must be transparent.

Deputy Pearse Doherty

There are public registers of the fees other entities can charge, particularly agencies that provide short-term loans. That database is available on the Central Bank's website. Will the Minister consider something along these lines for debt management agencies in order that people might be empowered to know who is charging the highest fees?

Deputy Michael Noonan

It would not be customary to do that, but I will consider the matter before Report Stage. The task of getting this information from deb management agencies or analogous bodies would fall within the Central Bank's remit. I will determine whether it is possible to provide the information on a wider basis rather than simply for the customer.

Deputy Pearse Doherty

My final question is on something that is missing from the section - debt collection. While debt management agencies are included, debt collectors remain unregulated. Did the Minister consider this matter while developing the legislation?

Deputy Michael Noonan

The issue of debt collection is within the remit of the Minister for Justice and Equality. He controls the appropriate legislation. We did not consider it.

Deputy Pearse Doherty

If the Minister for Justice and Equality was present, he would probably claim that it was a financial service and could be legislated for like any other financial service. Between the two Ministers-----

Deputy Michael Noonan

No, Department of Justice and Equality-sponsored legislation applies tight controls to debt collection.

Deputy Pearse Doherty

Debt collection is not licensed or regulated.

Deputy Michael Noonan

Debt collection is a much wider issue than just financial services. The broader issue falls within the remit of the Department of Justice and Equality.

Deputy Pearse Doherty

It is fair to suggest debt collection legislation should fall to be dealt with by the Department of Justice and Equality, but the problem is that it has been thrown about between the two Departments. The matter should fall to the Department of Finance and debt collectors should be regulated like any other financial entity, yet this sector is unregulated and unlicensed. I take it from the Minister's comments that he will not consider the matter in the context of this Bill. It is welcome that the work done by Deputy Michael McGrath in drafting his Bill prompted this legislation, but there is a glaring gap as regards debt collection. Will the Minister pursue this issue, perhaps with the Minister for Justice and Equality, to ensure the void is closed?

Deputy Michael Noonan

I do not have a briefing note on the issue.

As I recall it, there is specific justice legislation governing that matter. I will try to source additional information on it before Report Stage.

Amendment, by leave, withdrawn.

Deputy Michael Noonan

I move amendment No. 74:

In page 33, before section 44, but in Part 7, to insert the following new section:

44.—(1) If, in the opinion of the Bank, a person has engaged, is engaging or is about to engage in conduct that involved, involves or would involve contravening a provision of financial services legislation the Bank may apply to the Court for an order restraining the person from engaging in the conduct.

(2) If a person has refused or failed, is refusing or failing, or is about to refuse or fail, to do an act that the person is required to do by or under a provision of financial services legislation, the Court may make an order requiring the person to do that act.

(3) The Bank may apply ex parte to the Court for an order under this section and the Court may grant an order in such a case where the Court considers it necessary to do so in order to achieve the purposes of this section, including (in particular) in order to preserve the availability of any property, information, record or other thing.

(4) An order under this section may be made on such terms as the Court thinks appropriate.

(5) The Court may grant an interim order pending the determination of an application under this section.

(6) The Court may discharge or vary an order made under this section.

(7) The power of the Court to make an order restraining a person from engaging in conduct referred to in subsection (1) may be exercised—

(a) whether or not it appears to the Court that the person intends to repeat, or to continue, the conduct,

(b) whether or not the person has previously engaged in that kind of conduct,and

(c) whether or not there is danger of damage to any other person if the person engages in that kind of conduct.

(8) The power of the Court to grant an order requiring a person to do an act may be exercised—

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act,

(b) whether or not the person has previously refused or failed to do that act,and

(c) whether or not there is a danger of damage to any other person if the person refuses or fails to do that act.

(9) Where the Court is satisfied that it is desirable because of the nature or circumstances of the case or that it is otherwise in the interests of justice, the whole or any part of proceedings before it under this section may be heard otherwise than in public.

(10) If the Bank applies to the Court to make an order under this section, the Court may not require the applicant or any other person to give an undertaking as to damages as a condition of granting an interim order.

(11) Whenever the Court has power under this section to make an order restraining a person from engaging in particular conduct, or requiring a person to do a particular act, it may, either in addition to or instead of making such an order,order the person to pay damages to another person.

(12) In this section “the Court” means the High Court.”.

Amendment agreed to.

SECTION 44

Deputy Michael Noonan

I move amendment No. 75:

In page 33, subsection (1)(b), line 14, to delete "provision" and substitute "provider".

Amendment agreed to.

Question proposed: "That section 44, as amended, stand part of the Bill."

Deputy Pearse Doherty

Section 44 allows the courts to issue an order to an individual to stop doing something or to carry out a particular act. Does the order expire once the individual complies with it or after a particular period has elapsed? In other words, if a court orders a person not to engage in a particular transaction, at what point will the order expire?

Deputy Michael Noonan

This section provides that the Central Bank may publish warning notices to the public where it reasonably believes a person is either providing a financial service without the requisite authorisation or falsely purporting to be a regulated financial service provider. The bank already has powers under the EC (Markets in Financial Instruments) Regulations 2007 and the Investor Intermediaries Act 1995 to publish warning notices alerting the public to investment firms operating without the appropriate authorisation.

One of the principal functions of the Central Bank is to protect the public interest, in particular, the interests of consumers of financial services, by monitoring and regulating the provision of those services within its jurisdiction. The regulatory regime established by law to enable the bank to carry out this important function requires that all persons or entities wishing to provide financial services must first become regulated financial service providers by applying to the bank for authorisation. The bank is then equipped with an array of investigative regulatory and enforcement powers to ensure these regulated financial service providers adhere to the requirements of financial services legislation. However, sometimes a person outside the regulatory remit of the Central Bank will engage in conduct that constitutes a contravention of financial services legislation and jeopardises the interests of consumers of financial services. One example would be a moneylender acting without the requisite authorisation. To properly carry out its functions, the Central Bank needs power to restrain such conduct by unregulated entities. The bank has already been given power to restrain breaches of the law by unregulated entities in a limited number of areas. For example, section 36(j) of the Central Bank Act 1997, on which this section is based, allows the bank to apply to court for an order restraining any person from breaching the law relating to bureaux de change and money transmissions businesses. The purpose of this section is to give the bank a general power to apply to court for an injunction to restrain a contravention of financial services legislation, regardless of who is the perpetrator of that contravention.

The United Kingdom has a similar provision in section 380 of its Financial Services and Markets Act 2000 which enables the financial services authority to apply to court for an injunction to restrain any person from contravening a provision of its financial services legislation. Subsection (1) of this section provides that the Central Bank may apply to court for an order restraining conduct that constitutes a contravention of financial services legislation, regardless of whether the person engaging in that conduct is a regulated financial services provider. Subsection (2) provides that the court may make an order compelling a person to do an act that he is she is required to do by or under a provision of financial services legislation. Subsection (3) provides that the bank may apply ex parte for an order under this section and that the court may grant the order if it considers it necessary to do so. Subsection (4) provides that the court may grant an order under this section, subject to such terms as it thinks fit. Subsection (5) provides that the court may grant an interim order pending the final determination of an application under this section. For example, the bank may apply ex parte for an order under this section. The court might be unwilling to give a final order without first giving the person affected an opportunity to state his or her case. This subsection is designed to allow the court to grant an interim order pending the final determination of the matter on notice to the person affected. Subsection (6) provides that the court may discharge or vary an order made under this section.

I think that covers the point raised by the Deputy. The matter is within the hands of the court which can grant interim or absolute orders, either of which it may discharge.

Question put and agreed to.

SECTION 45

Vice Chairman

Amendments Nos. 76 to 84, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 76:

In page 33, lines 21 to 33, to delete subsection (1) and substitute the following:

“(1) This section applies to a person—

(a) on whom any sanction has been imposed under section 33AQ, 33AR or 33AV of the Act of 1942, or

(b) who has been convicted of an offence under financial services legislation.”.

These amendments extend the scope of the restitution order to include restitution against individuals.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 77:

In page 33, subsection (2), lines 35 and 36, to delete “a regulated financial service provider” and substitute “a person”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 78:

In page 33, subsection (2)(b), line 41, to delete “another” and substitute “other”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 79:

In page 33, subsection (3), lines 42 and 43, to delete “the regulated financial service provider” and substitute “the person”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 80:

In page 34, subsection (3)(c), lines 7 and 8, to delete “the regulated financial service provider” and substitute “the person”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 81:

In page 34, subsection (5), line 14, to delete “the regulated financial service provider” and substitute “the person”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 82:

In page 34, subsection (5)(a), lines 17 and 18, to delete “the regulated financial service provider” and substitute “the person”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 83:

In page 34, subsection (5)(b), line 22, after “or” to insert “other”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 84:

In page 34, subsection (5)(b), line 24, before “adverse” to insert “other”.

Amendment agreed to.

Section 45, as amended, agreed to.

NEW SECTION

Deputy Michael Noonan

I move amendment No. 85:

In page 34, before section 46, to insert the following new section:

46.—(1) In this section “relevant offence under financial services legislation” means an offence under financial services legislation to which section 10(4) of the Petty Sessions (Ireland) Act 1851 applies.

(2) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851 and any provision of financial services legislation, summary proceedings for a relevant offence under financial services legislation may be instituted—

(a) at any time within 3 years from the date on which the offence was committed, or

(b) if, at the expiry of that period, the person against whom the proceedings are to be brought is outside the State, within 6 months of the date on which he or she next enters the State, or

(c) at any time within 3 years from the date on which evidence that, in the opinion of the person by whom the proceedings are brought, is sufficient to justify the bringing of the proceedings, comes to that person’s knowledge, whichever is the later, provided that no such proceedings shall be commenced later than 5 years from the date on which the offence concerned was committed.

(3) For the purpose of this section, a certificate signed by or on behalf of or jointly with the person bringing the proceedings as to the date on which evidence relating to the offence concerned came to his or her knowledge shall be prima facie evidence and in any legal proceedings a document purporting to be a certificate issued for the purpose of this subsection and to be so signed shall be deemed to be so signed and shall be admitted as evidence without proof of the signature of the person purporting to sign the certificate.”.

This amendment extends from six months to three years the time for prosecuting summary offences.

Amendment agreed to.

Section 46 agreed to.

NEW SECTION

Deputy Michael Noonan

I move amendment No. 86:

In page 34, before section 47, to insert the following new section:

47.—(1) A person who gives information to the Bank pursuant to a requirement imposed by the Bank in the performance of its functions under financial services legislation or to an authorised officer in the exercise of his or her powers under Part 3 shall be taken not to have contravened any duty of confidentiality owed to any person as a result of so giving information.

(2) A person who is or was an auditor of, or an actuary acting for, a regulated financial service provider and who gives to the Bank—

(a) information on a matter of which he or she has, or had, become aware in his or her capacity as auditor of, or actuary acting for, the regulated

financial service provider, or

(b) his or her opinion of such a matter,

shall be taken not to have contravened any duty of confidentiality owed to any person as a result of so giving information if he or she is acting in good faith and has reasonable grounds for believing that the information or opinion is relevant to any functions of the Bank.”.

This amendment deals with limitation of liability for those who disclose information to the Central Bank, outside of whistleblowers' protections, including auditors and actuaries.

NEW SECTIONS

Amendment agreed to.

Section 47 deleted.

Vice Chairman

Amendment No. 87 has been already discussed with amendment No. 73.

Deputy Michael Noonan

I move amendment No. 87:

In page 35, before section 48, to insert the following new section:

“PART 8

EXTENSION OF PART V OF CENTRAL BANK ACT 1997 TO DEBT MANAGEMENT FIRMS, ETC

48.—Section 28 of the Central Bank Act 1997 is amended—

(a) by substituting the following for the definition of “authorisation”—

" 'authorisation' means an authorisation of a person to carry on a regulated business and, if an authorisation is amended in accordance with section 34, means the authorisation as amended;",

(b) by inserting the following definitions—

" 'consumer' means—

(a) an individual acting otherwise than in the course of business, or

(b) a micro enterprise within the meaning given by Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium sized enterprises;

'debt management firm' means a person who for remuneration provides debt management services to one or more consumers, other than an excepted person;

'debt management services' means—

(a) giving advice about the discharge of debts (in whole or in part),including advice about budgeting in connection with the discharge of debts,

(b) negotiating with a person’s creditors for the discharge of the person’s debts (in whole or in part), or

(c) any similar activity associated with the discharge of debts;

'excepted person' means—

(a) any charitable organisation within the meaning of section 2(1)of the Charities Act 2009,

(b) any licensed bank, building society, credit union or friendly society,

(c) a barrister, solicitor or accountant who provides debt management services only in an incidental manner and is subject to regulation by a professional body,

(d) a person who is a party to the Protocol for Independent Advice to Borrowers Availing of Long Term Mortgage Forbearance made on 2 August 2012 (as amended from time to time) and provides advice in accordance with that Protocol,

(e) the Insolvency Service of Ireland, any approved intermediary authorised under section 47 of the Personal Insolvency Act 2012 acting as such or any personal insolvency practitioner authorised under Chapter 1 of Part 5 of that Act carrying on practice as such,

(f) personal representatives (within the meaning of section 3 of the Succession Act 1965),

(g) trustees of a trust, other than a trust which is established to provide debt management services,

(h) the Bank,

(i) An Post,

(j) the National Asset Management Agency,

(k) the National Treasury Management Agency,

(l) the National Consumer Agency, and

(m) any other person constituted, or holding office, under an enactment or funded (in whole or in part) by a Minister of the Government;

'qualifying shareholder', in relation to another person, means a person with a direct or indirect holding in the other person—

(a) that represents 10 per cent or more of the capital of, or the voting rights in, the other person, or

(b) that makes it possible to exercise a significant influence over the management of the other person;

'remuneration', in relation to debt management services, means any commission or other payment, whether paid directly or indirectly, in respect of the debt management services and includes a payment made in respect of the provision of services other than debt management services as a result of which debt management services are provided otherwise than for payment;”,

(c) by substituting the following for the definition of “money transmission service”—

" 'money transmission service' means a service that involves transmitting money by any means, other than a service—

(a) that is a payment service to which the European Communities (Payment Services) Regulations 2009 (S.I. No. 383 of 2009)apply,

(b) that is provided to customers on a basis that is ancillary to any other services apart from debt management services,

(c) that is provided by—

(i) any charitable organisation within the meaning of section 2 (1) of the Charities Act 2009,

(ii) any licensed bank, building society, credit union or friendly society,

(iii) a barrister, solicitor or accountant who provides money transmission services only in an incidental manner and is subject to regulation by a professional body,

(iv) the Insolvency Service of Ireland, any approved intermediary authorised under section 47 of the Personal Insolvency Act 2012 acting as such or any personal insolvency practitioner authorised under Chapter 1 of Part 5 of that Act carrying on practice as such,

(v) personal representatives (within the meaning of section 3 of the Succession Act 1965),

(vi) trustees of a trust, other than a trust which is established to provide money transmission services,

(vii) the Bank,

(viii) An Post,

(ix) the National Asset Management Agency,

(x) the National Treasury Management Agency,

(xi) the National Consumer Agency, and

(xii) any other person constituted, or holding office, under an enactment or funded (in whole or in part) by a Minister of the Government.",

and

(d) in the definition of "regulated business" by substituting ", a retail credit firm or a debt management firm" for "or a retail credit firm"."

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 88:

In page 35, before section 48, to insert the following new section:

49.—Section 31 of the Central Bank Act 1997 is amended in subsection (2)(b) by inserting "or any other designated enactment and or any designated statutory instrument" after "this Part".".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 89:

In page 35, before section 48, to insert the following new section:

50.—Section 31A of the Central Bank Act 1997 is amended—

(a) by substituting “person proposing to carry on, or carrying on, regulated business” for “retail credit firm or home reversion firm”,

(b) in paragraph (a) by substituting “its memorandum and articles of association” for “the memorandum and articles of association of the firm”,

(c) in paragraphs (b) and (c) by substituting “the person or (where it is a firm) of each of” for “each of”,

(d) in paragraphs (d) and (e) by substituting "person” for "firm",

(e) in paragraph (f) by substituting "person’s" for "firm’s", and

(f) in paragraph (g)—

(i) by substituting "person’s" for "firm’s", and

(ii) by substituting "regulated business" for "authorised firms".".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 90:

In page 35, before section 48, to insert the following new section:

51.—Section 32A of the Central Bank Act 1997 is amended—

(a) in subsection (1)—

(i) by substituting “person” for “retail credit or home reversion firm”, and

(ii) by substituting “the person” for “the firm”,

(b) in subsection (3)—

(i) by deleting “retail credit services or other”, and

(ii) by substituting “persons” for “firms”,

(c) in subsection (4) by substituting “persons” for “firms”,

(d) in subsection (5) by substituting “person” for “firm” in both places, and

(e) in subsection (6)—

(i) by substituting “person” for “retail credit or home reversion firm”, and

(ii) by substituting “the person” for “the firm” in both places.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 91:

In page 35, before section 48, to insert the following new section:

52.—Section 33A of the Central Bank Act 1997 is amended—

(a) in subsection (1) by substituting “, a person authorised to carry on a regulated business” for “an authorised retail credit firm or an authorised home reversion firm”,

(b) in subsection (1)(a)—

(i) by substituting “the person’s” for “the firm’s”, and

(ii) by substituting “persons authorised to carry on regulated business” for “retail credit firms or authorised home reversion firms”,

(c) in subsection (1)(c)—

(i) by substituting “any relevant document” for “a credit agreement or home reversion agreement, or on any other relevant document,”, and

(ii) by substituting “the document” for “the agreement”,

(d) in paragraph (1)(d) by substituting “person” for “firm”,

(e) in subsections (2) and (3), by substituting “person” for “firm” and by substituting “persons” for “firms”, in each place, and

(f) by inserting the following subsections after subsection (3)—

“(4) The Bank may also impose on persons authorised to carry on a money transmission business a condition or requirement to raise and maintain such capital or other financial resources as may be specified by the Bank.

(5) The Bank may also impose on a debt management firm a condition or requirement to effect a policy of professional indemnity insurance—

(a) in such form,

(b) providing indemnification up to such sum and in respect of such matters, and (c) valid for such minimum period,

as the Bank may specify from time to time.",".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 92:

In page 35, before section 48, to insert the following new section:

53.—The Central Bank Act 1997 is amended by inserting the following section after section 34C—

34D.—(1) Notwithstanding section 29, a person carrying on the business of a debt management firm immediately before the commencement of Part 8 of the Central Bank (Supervision and Enforcement) Act 2013 is taken to be authorised to carry on the business of a debt management firm until the Bank has granted or refused authorisation to the person, provided that the person applies to the Bank under section 30 for authorisation no later than 3 months after that commencement.

(2) If a person is taken to be authorised to carry on the business of a debt management firm under subsection (1), the Bank may do either or both of the following:

(a) impose on that person such conditions or requirements or both as the Bank considers appropriate relating to the proper and orderly regulation and supervision of debt management firms;

(b) direct that person not to carry on the business of a debt management firm for such period (not exceeding 3 months) as is specified in the direction.

(3) A condition or requirement imposed, or a direction given, under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942.".".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 93:

In page 35, before section 48, to insert the following new section:

54.—Section 36 of the Central Bank Act 1997 is amended by inserting “and such of the other designated enactments and designated statutory instruments as apply” after “this Part”.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 94:

In page 35, before section 48, to insert the following new section:

55.—Section 36A(1) of the Central Bank Act 1997 is amended—

(a) in paragraph (d) by inserting “or any other designated enactment or designated statutory instrument” after “this Part” in both places,

(b) in paragraph (l)(ii) by substituting “terrorism, or” for “terrorism.”, and

(c) by inserting the following after paragraph (l):

“(m) the holder of the authorisation is not, in the opinion of the Bank, a fit and proper person to hold the authorisation, or

(n) any officer or qualifying shareholder of the holder of the authorisation is not, in the opinion of the Bank, a fit and proper person to be such an officer or shareholder, or

(o) it is necessary in the interests of the proper and orderly regulation and supervision of the regulated business concerned.”.”.

Amendment agreed to.

Sections 48 to 50, inclusive, agreed to.

SECTION 51

Deputy Michael Noonan

I move amendment No. 95:

In page 36, to delete lines 44 to 46 and substitute the following:

"commits an offence and is liable—

(i) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(ii) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years, or both.".".

This is a technical amendment regarding offences.

Amendment agreed to.

Section 51, as amended, agreed to.

Section 52 agreed to.

NEW SECTIONS

Vice Chairman

Amendment No. 97 is an alternative to amendment No. 96, so the amendments will be discussed together by agreement. Is that agreed? Agreed.

Deputy Michael McGrath

I move amendment No. 96:

In page 38, before section 53, but in Part 8, to insert the following new section:

“53.—Part VIIB of the Central Bank Act 1942 (as inserted by section 16 of the Central Bank and Financial Services Authority of Ireland Act 2004) is amended as follows:

(a) by inserting the following paragraph after paragraph (d) of section 57BB:

“(e) to enable the Financial Services Ombudsman to publish and report upon:

(i) complaints made to his Office about the conduct of regulated financial service providers, and

(ii) the investigation and adjudication by his Office of complaints made to it about the conduct of regulated financial service providers.”;

(b) by deleting the second sentence in section 57BG and substituting the following:

“Such a report may include particulars or comments on any complaint that has been investigated and/or adjudicated by the Financial Services Ombudsman.”;

(c) by deleting subsection (2) and inserting the following in section 57BH:

“(2) Such a Committee is entitled to request the Chairperson of the Council to provide information relating to any complaint that has been investigated and/or adjudicated by the Financial Services Ombudsman, including details pertaining to the number and nature of complaints made against individual regulated financial service providers.”;

(d) by deleting paragraph (a) and substituting the following in section 57BS:

“(a) a summary of all complaints made to that Ombudsman during the preceding financial year, including:

(i) details of the regulated financial service providers against whom those complaints were made,

(ii) details of the nature of the complaints made against financial service providers, and

(iii) the results of the investigations into those complaints, and”;

(e) by deleting subsection (1) and substituting the following in section 57BV:

“(1) The Financial Services Ombudsman is required to provide the Council or the Minister with such reports relating to the activities of the Bureau as the Council or the Minister requires from time to time. Such a report may include particulars or comments on any complaint that has been investigated and/or adjudicated upon by the Financial Services Ombudsman.”;

(f) by deleting subsection (2) and inserting the following in section 57BW:

“(2) Such a Committee is not entitled to request the Financial Services Ombudsman to provide information relating to any complaint that is currently under investigation. However, the Committee is entitled to request the Financial Services Ombudsman to provide information relating to any complaints that have been investigated and/or adjudicated by the Financial Services Ombudsman.”;

(g) to insert the following subsection after subsection (7) in section 57CI:

“(7A) The Financial Services Ombudsman shall publish a copy of his finding in the report referred to in section 57BS and it shall include details of the identity of the financial services provider that was investigated and adjudicated upon by him.”.”.

This issue would be colloquially known as the "name and shame" provision, giving the Financial Services Ombudsman the power to publish the complaints records of individual financial service providers. Successive ombudsmen have called for this power and I welcome the fact that the Minister is making a move in that direction. We had a Private Members' Bill dealing with the issue some time ago, which forms the basis of our amendment. It is very important that these changes are made and it will certainly help to hold repeat offenders to account in the financial services area and weed out the remaining bad practices that remain. It will be an important consumer protection tool if it is properly implemented.

Having welcomed the fact that the Minister is making some moves, I want to make some comments on amendment No. 97. The Minister is proposing to give the ombudsman the power to issue a report if he or she believes it in the public interest to do so in circumstances in which a financial service provider has in the previous year had at least three complaints relating to it upheld by the ombudsman. The Minister is setting the bar quite high, particularly for large financial services providers, as having three complaints upheld would be par for the course and no big deal. Other providers may not complete many transactions in the year and if they had two complaints upheld every year, it would be in the public interest for them to be reported. The bar has been set too high and it should be possible to publish this information in an aggregate form, as consumers have the right to know if complaints against financial services firms have been upheld.

I also question the information that the ombudsman is allowed to publish, which equates to the name of the provider against whom three complaints have been upheld, the identity of any group that the provider may be a member of and the number of complaints found to be substantiated or partly substantiated against that provider. There does not appear to be any provision whereby the ombudsman can provide descriptions of the types of complaint that have been upheld against a provider, which is crucial information, so I hope the Minister will address the issue. For example, if it is reported that four complaints have been upheld against AIB and Bank of Ireland, the information is meaningless, as they could relate to interest rates, fees, charges or the mis-selling of payment protection or investment products. The ombudsman should be given the power to describe the subject area of the upheld complaint.

I note that the Minister is proposing that if a financial services firm appeals a decision of the ombudsman, the ombudsman is not allowed to report the fact that there was a finding against a provider when it is subject to appeal. That is unnecessary; there could be a footnote to the effect that a firm has had five complaints upheld with three under appeal, for example. Otherwise, I am concerned that appealing may become a delaying tactic to prevent information from being published and put into the public domain.

I welcome the fact that the Minister is making some moves, but his proposals are overly restrictive. I would appreciate it if the Minister could respond to my points and be open to improving the process.

Deputy Michael Noonan

The issue of granting the ombudsman permission to publish the names of financial service providers against which complaints have been upheld has been debated for some time. A Private Members' Bill on the issue, sponsored by the Deputy and his party, was debated last year in the Dáil. At that stage I indicated that legislation in this area was necessary to allow the ombudsman to name regulated financial institutions about which he upheld or substantially upheld claims. The ombudsman initiated a consultation process on the issue of publishing the complaints records of individual financial service providers, and in the submissions received, financial service providers raised the issue of how the information on the complaints could be presented. The ombudsman has long held the view that the public interest is better served by his having the ability to publish information on the complaints record of firms about which such complaints are upheld. The review of international best practice has confirmed this.

Dissemination of such information in a responsible fashion allows consumers to analyse the performance of all financial service providers and helps them make an informed choice while choosing a provider or product. The naming of financial service providers in certain circumstances will support the work of the ombudsman in carrying out his duties in an effective manner. Much work went into developing the proposal set out in the Bill and the ombudsman was consulted during the preparation of the legislation and is aware of its provisions.

The ombudsman suggested certain safeguards that should be included in any legislation to give the office power. The first is that there should be discretion as to whether an institution should be named and the second is that a complainant should not be named. The third is that there should be statutory privilege covering the naming of institutions. These safeguards have been provided in the Bill.

Deputy McGrath has examined the possibility of extending this further so that publication would occur after two complaints rather than three, with the nature of the complaints published by way of additional information. He is also asking that we examine the possibility that the appeals mechanism, particularly the provision for non-publication until resolution of the appeal, could be used as a device to delay publication. These are legitimate points and I will examine them between now and Report Stage. As this Bill was constructed after consultation with the Financial Services Ombudsman, I will need to consult with the office again before making any further change.

Deputy Michael McGrath

I thank the Minister for his response. Some of the issues I raised are pretty obvious and the fingerprints of the financial services sector are evident in reading the section. It does not go far enough, and consumers are entitled to information about the performance of financial service firms. There should not be any specification of the number of complaints that must be upheld against a firm before the matter is published, and there should be a provision for the information to be published in aggregated form. It is essential that the nature of the complaint that has been upheld be described or categorised; as has been mentioned, if there are four or five complaints against one of the big banks, the information given is utterly meaningless. I am glad the Minister will consider the issue of the possible prevention of publication through the submission of appeals, as they may be designed merely for this purpose.

Deputy Pearse Doherty

I saw the three safeguards suggested by the Financial Services Ombudsman and I have an issue with none of them. I do have an issue with setting the number of complaints at three, and even two is inadequate. This legislation has a double lock. One of these is the threshold of three complaints in one year, but the most important is that the Financial Services Ombudsman must decide it is in the public interest to publish the findings.

If we are to have an independent financial ombudsman, we should have confidence and faith in that individual or body to decide whether it is in the public interest. If there is one complaint upheld by the financial ombudsman that relates to one of the major institutions, or even to a minor one, it is important to publish that information if the financial ombudsman believes it is in the public interest to do so. That has been called a "name and shame" process but it is not just about putting a black mark against a financial institution. It is to empower other consumers to determine whether they have been victims of the same type of wrongdoing by that financial institution.

The financial ombudsman recently said that the majority of complaints received by his office are about financial institutions wrongfully moving customers off tracker mortgages. I recently dealt with a family in mortgage distress who received a letter from a financial institution referring to the repossession or voluntary surrender of their family home. I looked through the documents relating to the loan, which was taken out about six years ago. The mortgage was initially a fixed-rate one and the documents clearly stated that at the end of the fixed-rate period a tracker rate would apply. The family was completely unaware that this was happening and did not know that the financial ombudsman was dealing with similar complaints against this institution. That is why it is really important that the financial ombudsman is given the independence to decide on what is in the public interest to publish. There will be some complaints that are minor, which will be upheld but which it may not be in the public interest to publish, particularly if they are as a result of human error. However, there are other complaints that are really important and could have implications for large numbers of people. If the financial ombudsman believes that providing information on such complaints is in the public interest, we should not have another test based on having a given number of complaints within a given period of time. Laying down such criteria for publication would tie the hands of the financial ombudsman. I agree that such information could be provided in summary format. We do not need all the details but we need to know, for example, that two complaints about AIB forcing customers off tracker-rate mortgages onto variable-rate mortgages were upheld. That information must be provided so that other customers become aware of it and can examine their mortgage documents to determine whether there is an issue. This is about empowering consumers, which is why it is important to make a substantial amendment to this section on Report Stage.

Deputy Michael Noonan

I will have a look at this again between now and Report Stage and will take all the views expressed here into account. The reason for having three complaints as the test for publication is that to publish with a lesser number of complaints might have a disproportionate impact on small brokers in a competitive situation in small towns. We could literally put somebody out of business if information was published on the back of one complaint. The financial ombudsman will have to make a judgment that what he or she is doing is in the public interest within the town. In small towns and communities, rumours alone can put people out of business. Three complaints seems reasonable but we will examine the issue again and discuss it further. I am not making a commitment to change, but it is worth examining the points made by Deputy Doherty. I will consult again with the financial ombudsman and we can have further discussion on the matter on Report Stage.

Amendment put and declared lost.

Deputy Michael Noonan

I move amendment No. 97:

In page 38, before section 53, to insert the following new section:

“PART 9*

AMENDMENTS TO FINANCIAL SERVICES LEGISLATION

53.—(1) Section 57BS of the Central Bank Act 1942 is amended by inserting the following after subsection (3):

“(4) If the Financial Services Ombudsman thinks that it would be in the public interest to do so, a report under subsection (1) may, in accordance with regulations made under section 57BF, include in respect of every regulated financial service provider falling within subsection (5) the information specified in subsection (6).

(5) A regulated financial service provider falls within this subsection if, in the preceding financial year, at least 3 complaints relating to the regulated financial service provider which have been made to the Financial Services Ombudsman have been found by that Ombudsman to be substantiated or partly substantiated.

(6) The information referred to in subsection (4) is—

(a) the name of the regulated financial service provider, including any trading name (if different),

(b) where applicable, the identity of any group of which the regulated financial service provider is a member, and

(c) the number of complaints found to be substantiated or partly substantiated in respect of the regulated financial service provider in the preceding financial year.

(7) For the purposes of the law of defamation the publication of the information referred to in subsection (4) in a report under subsection (1) shall be absolutely privileged.

(8) A report under subsection (1) shall not divulge the identity of any complainant nor shall anything be published in the report which may lead to the identification of any complainant unless the complainant consents in writing.

(9) For the purposes of this section if the regulated financial service provider has appealed against the Ombudsman’s finding that a complaint has been found to be substantiated or partly substantiated the complaint is to be taken to have been so found only when—

(a) the finding is affirmed (with or without modification) on appeal, or

(b) the appeal is withdrawn, struck out by the High Court or abandoned.

(10) For the purposes of this subsection (6)(b) a person is a member of a group if it is an undertaking dealt with in group accounts (within the meaning of section 150(1) of the Companies Act 1963).”.

(2) Section 57BF of the Central Bank Act 1942 is amended in subsection (2) by inserting the following after paragraph (c):

“(ca) for the purposes of a report under section 57BS(1) make provision for—

(i) the form and manner in which the information specified in the report is given, including provision for the categorisation of the different classes of regulated financial service providers identified in the report and the different classes of financial services to which the complaints by reason of which they are so identified relate, and

(ii) the form and manner in which the report may be published and the information made available;”.”.

Amendment agreed to.

Vice Chairman

Amendments Nos. 98 and 99 are related and may be discussed together.

Deputy Michael Noonan

I move amendment No. 98:

In page 38, before section 53, to insert the following new section:

54.—Section 76 of the Central Bank Act 1989 is amended by inserting the following after subsection (2):

“(3) An application under subsection (2) shall be on notice to the Bank and the Bank shall be entitled to appear, be heard and adduce evidence at the hearing of the application.

(4) Notice of the application shall be served upon the Bank at least 14 days before the date of hearing of the application.

(5) An affidavit giving the names and addresses of, and the places and dates of service on, all persons who have been served with the notice of application, grounding affidavit and exhibits (if any) shall be filed by the applicant at least 4 days before the application is heard. If any person who ought under this section to have been served has not been so served, the affidavit shall state that fact and the reason for it.

(6) In this section ‘the Court’ means the High Court.”.”.

These amendments provide for the Central Bank to be a notice party where a financial service provider applies to the court to grant retrospective approval for a transaction.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 99:

In page 38, before section 53, to insert the following new section:

55.—Section 43 of the Investment Intermediaries Act 1995 is amended by renumbering the existing provision as subsection (1) and by inserting the following after that subsection:

“(2) A person may apply to the Court for an order, on such conditions as the Court may decide, declaring that, notwithstanding the failure of that person to notify the Bank as required by this Part, the acquiring transaction is, and always has been, a valid transaction and that title to any shares or other interest concerned did pass and that all purported exercise of powers is and always had been valid; and if the Court finds that the failure to notify the Bank of the proposed acquiring transaction was due to inadvertence on the part of the person, or if the Court considers that it is otherwise in the interest of justice to do so, it shall grant the order sought.

(3) An application under subsection (2) shall be on notice to the Bank and the Bank shall be entitled to appear, be heard and adduce evidence at the hearing of the application.

(4) Notice of the application shall be served on the Bank at least 14 days before the date of hearing of the application.

(5) An affidavit giving the names and addresses of, and the places and dates of service on, all persons who have been served with the notice of application, grounding affidavit and exhibits (if any) shall be filed by the applicant at least 4 days before the application is heard. If any person who ought under this section to have been served has not been so served, the affidavit shall state that fact and the reason for it.”.”.

Amendment agreed to.

Vice Chairman

Amendments Nos. 100 to 102, inclusive, are related and may be discussed together.

Deputy Michael Noonan

I move amendment No. 100:

In page 38, before section 53, to insert the following new section:

56.—Section 30 of the Consumer Credit Act 1995 is amended in subsection (1) by substituting the following for paragraphs (a) and (b):

“(a) a paper copy of the agreement shall be sent to the consumer by the creditor within 10 days of the making of the agreement, and

(b) in the case of any contract of guarantee relating to the agreement, a paper copy of the guarantee and the agreement shall be sent to the guarantor by the creditor within 10 days of the making of the contract.”.”.

These amendments relate to consumer credit legislation and the option to conclude agreements electronically.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 101:

In page 38, before section 53, to insert the following new section:

57.—Section 45 of the Consumer Credit Act 1995 is amended in subsection (1) by substituting “communication on paper” for “written communication”.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 102:

In page 38, before section 53, to insert the following new section:

58.—Section 149 of the Consumer Credit Act 1995 is amended—

(a) in subsection (5) by substituting “3 months” for “4 months”,

(b) in subsection (6) by substituting “3 months” for “3 weeks”,

(c) by inserting the following after subsection (6):

“(6A) In calculating the periods of 3 months specified in subsections (5) and (6) no account shall be taken of any day on which any information required by the Bank to be provided by the credit institution for the performance of the Bank’s functions under this section has not yet been so provided.”,

and

(d) by inserting the following after subsection (14):

“(15) A direction given under section 28 of the Central Bank Act 1989 and in force immediately before the coming into force of this section is to be treated as continuing in effect as if given under this section and accordingly is a subsisting direction under this section for the purposes of subsection (10).

(16) The duty imposed by subsection (1) shall not apply to a relevant new credit institution until the end of the period of 3 years after it commences business in the State; but at the end of that period, the credit institution shall notify the Bank of all decisions to impose charges in relation to the provision of any service to a customer or to a group of customers during that period and of any proposal to do so which is not implemented during that period.

(17) A notification under subsection (16) shall be treated as a notification under subsection (1) for the purposes of this section; and references in this section to a proposal include a decision to impose charges notified under subsection (16).

(18) In subsection (16) ‘relevant new credit institution’ means a credit institution which commences business as a credit institution in the State after the coming into operation of section 59 of the Central Bank (Supervision and Enforcement) Act 2013 and is not when it does so a related undertaking (within the meaning of that Act) of another credit institution carrying on business as a credit institution in the State.”.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 103:

In page 38, before section 53, to insert the following new section:

59.—Section 27 of the Central Bank Act 1997 is amended by inserting the

following after subsection (5):

“(6) (a) Subsection (1) does not apply if the regulated financial service provider concerned has a reasonable excuse.

(b) It is a reasonable excuse for the purposes of paragraph (a) for a regulated financial service provider to fail to comply with a requirement under section 25 or 26 that such compliance might tend to incriminate the regulated financial service provider.

(c) Paragraph (b) does not limit what is a reasonable excuse for the purposes of paragraph (a).”.”.

This amendment relates to various auditor reporting provisions in the Central Bank Act 1997 and the associated offences.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 104:

In page 38, before section 53, to insert the following new section:

60.—The Investor Compensation Act 1998 is amended—

(a) in section 33 by substituting the following for subsection (4):

“(4) Following consultation with the Company, an administrator may apply to the Court to determine any question arising in relation to his or her functions under this Act.

(5) Notice of an application under subsection (4) shall be given to the Company.”,

(b) by inserting the following section after section 33A:

33B.—(1) The Minister may, following consultation with the Bank and the Company, make regulations providing for the return of investors’ funds or investment instruments, as the case may be, following the appointment of an administrator, where the Minister considers it necessary to do so in order to provide for their efficient, equitable and prompt return.

(2) Regulations under subsection (1) may include provision for—

(a) the procedures and steps to be taken for the purpose of identifying, recording and, to the extent necessary, reconciling, the books, records or other documents of the investment firm to establish—

(i) the monies, investment instruments or documents of title relating to such investment instruments which are held or which ought to be held on behalf of clients by the investment firm or by its nominee, and

(ii) the claims of the clients of the investment firm against those monies, investment instruments or documents of title (whether or not those monies, investment instruments or documents of title continue to exist),

(b) the satisfying and the ranking of claims against investment instruments or classes of investment instruments,

(c) the number, value and nature of claims against monies held or which ought to be held by an investment firm on behalf of clients,

(d) the treatment and abatement of claims by clients,

(e) the return of dividends, monies and investment

(f) the allocation and provision of reasonable expenses of a liquidator, receiver, administrator, examiner or official assignee subject to Regulations 157 and 158 of the European Communities (Markets in Financial Instruments) Regulations 2007 (S.I. No. 60 of 2007), and

(g) the making of reports by an administrator to the Company containing such information relating to the administration of claims and at such time or times and in such manner as may be specified in the regulations,”,

and

(c) in section 35 by inserting the following after subsection (7):

“(7A) Notice of an appeal under subsection (7) shall be given to the Company and it shall be entitled to appear, be heard and adduce evidence on the hearing of the appeal.”.”.

This amendment implements the report produced on foot of the collapse of Murrogh stockbrokers some years ago and relates to the procedures for the distribution of assets to investors on appointment of an administrator.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 105:

In page 38, before section 53, to insert the following new section:

61.—The Financial Services (Deposit Guarantee Scheme) Act 2009 is amended—

(a) in section 1 by inserting the following definition:

“ ‘relevant Member State institution’ means an institution authorised in another Member State which has established in the State a branch which maintains a deposit in the deposit protection account pursuant to Regulation 26 of the Deposit Guarantee Regulations;”,

and

(b) by inserting the following sections after section 8:

8A.—(1) Where the Bank considers it necessary to do so in the public interest the Bank may make regulations for securing that accurate information in relation to persons who maintain eligible deposits with credit institutions or relevant Member State institutions (in this section referred to as ‘depositors’) is available to them and to the Bank (in particular to enable the Bank to meet its obligations to make guarantee payments out of the deposit protection account to depositors in accordance with the Deposit Guarantee Regulations).

(2) The regulations may include provision—

(a) requiring credit institutions and relevant Member State institutions to keep such information as the Bank may prescribe in relation to depositors,

(b) about the form and manner in which, and the period for which, the prescribed information is to be kept,

and

(c) for enabling the verification of the prescribed information.

8B.—The Bank may require a credit institution or relevant Member State institution to provide to the Bank at such time or times and in such manner as the Bank may require—

(a) any information kept by it in compliance with regulations under section 8A, and

(b) any information which the Bank may reasonably require to satisfy itself that requirements imposed by regulations under that section have been, and are being, complied with by the credit institution or relevant Member State institution.

8C.—(1) If the Bank considers that a credit institution or relevant Member State institution has failed, or is failing, to comply with any requirement imposed by regulations made under section 8A, the Bank may direct it to take specified steps to comply with the requirement.

(2) If the Bank considers that a credit institution or relevant Member State institution has failed, or is failing, to comply with a direction under subsection (1) the Bank may make an application to the High Court, and the High Court may, on such an application, make an order requiring it to comply with the direction.

8D.—(1) The provisions of a direction under 8C have effect from the date specified in the direction in relation to them.

(2) A direction under section 8C shall set out—

(a) all terms of the direction, including any date specified as the date by which, or period specified as the period within which, any provision of the direction is to be complied with, and

(b) any incidental, supplementary or consequential provision for securing that the direction is fully complied with.

(3) On an application under section 8(2), the High Court may make any such interim or interlocutory order as it considers appropriate.

(4) An order under subsection (3) may include an order to take such ancillary or incidental steps as the High Court may consider appropriate to give full effect to the order.”,

and

(c) in section 9(1) by substituting the following for “A person who contravenes section 4(1) commits an offence and is liable—”:

“A person who contravenes section 4(1), fails to comply with a requirement under section 8B or a direction under section 8C or provides information under section 8B knowing it to be false or misleading commits an offence and is liable—”.”.

This amendment provides for technical Central Bank regulations on procedures to apply to firms under the deposit guarantee scheme to ensure prompt and accurate payouts.

Amendment agreed to.

Section 53 deleted.

NEW SECTIONS

Vice Chairman

Amendments Nos. 106 and 107 are related and may be discussed together.

Deputy Michael Noonan

I move amendment No. 106:

In page 39, before section 54, to insert the following new section:

54.—Section 1 of the Insurance Act 1964 is amended by substituting the following for paragraph (a) of the definition of “excluded risk”:

“(a) a risk relating to insurance that falls within the following classes of the Annex to First Council Directive 73/239/EEC of 24 July 1973 —

(i) 4, 5, 6, 7, 11 and 12,

(ii) 1 and 10 in so far as they relate to the insurance of passengers in marine and aviation vehicles and carriers liability insurance, respectively,

(iii) class 14 in so far as it relates to export credit;”.”.

These are technical amendments relating to the Insurance Acts.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 107:

In page 39, before section 54, to insert the following new section:

55.—Section 6 of the Insurance Act 1964 is amended by substituting the following for the definition of “premium” in subsection (14):

“ ‘premium’, in relation to a policy issued both in respect of risks in the State and risks not in the State, means that proportion of the premium paid in respect of risks in the State;”.”.”.

Amendment agreed to.

Vice Chairman

Amendments Nos. 108 and 109 are related and may be discussed together.

Deputy Michael Noonan

I move amendment No. 108:

In page 39, before section 54, to insert the following new section:

56.—(1) Section 4(1) of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 (referred to in this section as “the 1978 Act”) is amended by inserting the following after paragraph (b):

“(bb) the Central Bank of Ireland,”.

(2) The amendment made by subsection (1) shall not apply to—

(a) an application to the Registrar of Titles under Part III of the 1978 Act made before the commencement of this section,

(b) a notice of intention to acquire a fee simple under section 4 of the Landlord and Tenant (Ground Rents) Act 1967 (referred to in this section as “the 1967 Act”) served before the commencement of this section,

(c) an application to a county registrar under section 17 of the 1967 Act, or an arbitration under that Act, relating to a notice to which paragraph (b) applies,

(d) an arbitration under Part III of the 1978 Act relating to an application to which paragraph (a) applies,

(e) an appeal to the Circuit Court from a decision of a county registrar under the 1967 Act relating to a notice to which paragraph (b) applies, or

(f) an appeal to the Circuit Court from a decision of the Registrar of Titles under Part III of the 1978 Act relating to an application to which paragraph (a) applies.”.

These are amendments to landlord and tenant legislation relating to property issues at the Central Bank cash centre.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 109:

In page 39, before section 54, to insert the following new section:

57.—(1) Section 4 of the Landlord and Tenant (Amendment) Act 1980 is amended—

(a) in subsection (1) by inserting “or the Central Bank of Ireland, as the case may be,” after “State authority”, and

(b) by inserting the following after subsection (1)—

“(1A) Subject to subsections (1B) and (1C), this Act shall not bind the Central Bank of Ireland (in this subsection and subsections (1B) and (1C) referred to as ‘the Bank’) in its capacity as lessor or immediate lessor of any premises.

(1B) Where the Bank acquires the interest of the lessor or immediate lessor of any premises after the commencement of this Act and the Bank did not have any previous interest in the premises as lessor or immediate lessor, section 13 shall apply as if the expressions ‘at any time’ and ‘at that time’ in subsection (1) thereof were references to the relevant date and Part II shall have effect accordingly, save that a tenant of the Bank whose tenancy of the premises is renewed under that Part as applied by this section shall not be entitled to a further renewal of that tenancy.

(1C) In a case to which subsection (1B) applies, subsection (1A) shall not apply so as to disqualify any person for payment of compensation for improvements in respect of such improvements as may have been carried out before the relevant date.”.

(2) The amendments made by subsection (1) shall not apply to leases granted before the coming into force of this section.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 110:

In page 39, before section 54, to insert the following new section:

58.—Section 3 of the Companies (Amendment) Act 1990 is amended—

(a) in subsection (2)—

(i) in paragraph (a) by substituting “only by the Central Bank or by the company acting with the prior consent of the Central Bank,” for “only by the Minister”,

(ii) in paragraph (b) by inserting “or by the company with the prior consent in writing of the Central Bank” after “the Central Bank”, and

(iii) by deleting paragraph (c)(ii),

and

(b) by inserting the following after subsection (2):

“(2A) Where a petition is presented under subsection (2) otherwise than by the Central Bank—

(a) the petitioner—

(i) subject to subsection (2B), shall, before he or she presents the petition at the office of the court, cause to be received by the Central Bank a notice in writing of his or her intention to present the petition, and

(ii) shall serve a copy of the petition on the Central Bank as soon as may be after the presentation of it at the office of the court,

and

(b) the Central Bank shall be entitled to appear and be heard at any hearing relating to the petition.

(2B) A notice under subsection (2A)(a)(i) shall not be required if the petitioner is the company.”.”.

This is a technical amendment to the Companies Acts and the procedure for petitioning for examinership. It was overlooked when the amendments were made to similar provisions in the original financial services legislation in 2003.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 111:

In page 39, before section 54, to insert the following new section:

59.—(1) Nothing in the Taxes Consolidation Act 1997 prevents the disclosure to the Bank of information held by the Revenue Commissioners in relation to—

(a) qualifying companies, within the meaning of section 110 of the Taxes Consolidation Act 1997, or

(b) FVCs, within the meaning of Article 1 of Regulation (EC) No 24/2009 of the European Central Bank of 19 December 20083 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions.

(2) Information disclosed to the Bank by virtue of subsection (1) may be used by the Bank only in the exercise of the Bank’s functions and shall not be disclosed by

the Bank to any other person.”.

This amendment allows the Revenue Commissioners to share statistical information on financial vehicle corporations with the Central Bank.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 112:

In page 39, before section 54, to insert the following new section:

60.—Section 11 of the Electronic Commerce Act 2000 is amended in paragraph (d) by deleting “the Consumer Credit Act, 1995, or any regulations made thereunder and”.”.

This is a technical amendment to the Electronic Commerce Act, which is related to the changes to the consumer credit legislation in an earlier amendment.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 113:

In page 39, before section 54, to insert the following new section:

61.—The Planning and Development Act 2000 is amended—

(a) in section 33 by inserting the following after subsection (4):

“(5) Regulations under this section may make different provision with respect to applications for permission for development made by the Central Bank of Ireland in cases where the disclosure of information in relation to the application concerned might prejudice the security, externally or internally, of the development or the land concerned or facilitate any unauthorised access to or from the land by any person, and such regulations may make provision modifying the operation of section 38 in relation to applications in those cases.”,

and

(b) in section 142 by inserting the following after subsection (5):

“(6) Regulations under this section may make different provision with respect to appeals in relation to applications for permission for development made by the Central Bank of Ireland in the cases referred to in section 33(5), and such regulations may make provision modifying the operation of sections 132 and 146 in relation to such appeals.”.”.

This is an amendment to planning legislation relating to property issues at the Central Bank cash centre.

Amendment agreed to.

Vice Chairman

Acceptance of amendment No. 114 involves the deletion of section 54 of the Bill.

Deputy Michael Noonan

I move amendment No. 114:

In page 39, before section 54, to insert the following new section:

62.—Section 56 of the Personal Injuries Assessment Board Act 2003 is amended in subsection (5) by substituting the following for paragraph (c):

“(c) one shall be a person nominated for such appointment by the Irish Insurance Federation (or any successor of it), and

(d) one shall be an employee of the Central Bank of Ireland nominated for such appointment by the Governor of the Central Bank of Ireland.”.”.

This is an amendment regarding the Central Bank appointee to the Personal Injuries Assessment Board.

Amendment agreed to.

Section 54 deleted.

NEW SECTION

Deputy Michael Noonan

I move amendment No. 115:

In page 39, before Schedule 1, to insert the following new section:

55.—The Credit Institutions (Financial Support) Act 2008 is amended by repealing section 7.”.

This is an amendment regarding the Credit Institutions (Financial Support) Act 2008, removing the temporary role of the Minister in approving mergers and returning it to the Competition Authority.

Amendment agreed to.

SCHEDULE 1

Deputy Michael Noonan

I move amendment No. 116:

In page 40, to delete lines 5 to 44 and substitute the following:

“

Item (1)	Number and year (2)	Short title (3)	Extent of repeal (4)
1	No. 3 of 1989	Insurance Act 1989	Section 3(2C)
2	No. 16 of 1989	Central Bank Act 1989	Section 87(3)
3	No. 17 of 1989	Building Societies Act 1989	Section 119(5)
4	No. 21 of 1989	Trustee Savings Banks Act 1989	Section 66(2)
5	No. 37 of 1990	Unit Trusts Act 1990	Section 18(3)
6	No. 24 of 1994	Investment Limited Partnerships Act 1994	Section 41(3)
7	No. 11 of 1995	Investment Intermediaries Act 1995	Section 79(3)
8	No. 24 of 1995	Consumer Credit Act 1995	Section 14(3)
9	No. 8 of 1997	Central Bank Act 1997	Section 27K
10	No. 15 of 1997	Credit Union Act 1997	Section 171(5)
11	No. 37 of 1998	Investor Compensation Act 1998	Section 43(3)
12	No. 32 of 2001	Dormant Accounts Act 2001	Section 6(4)
13	No. 47 of 2001	Asset Covered Securities Act 2001	Section 97
14	No. 2 of 2003	Unclaimed Life Assurance Policies Act 2003	Section 5(3)
15	No. 12 of 2005	Investment Funds, Companies and Miscellaneous Provisions Act 2005	Section 21(4)
16	No. 19 of 2007	Consumer Protection Act 2007	Section 76
17	No. 23 of 2010	Central Bank Reform Act 2010	Part 5

Section 4(2).

PART 2

Revocations

Item (1)	Number and year (2)	Citation (3)	Extent of revocation (4)
1	S.I. No. 727 of 2004	European Communities (Financial Conglomerates) Regulations 2004	Regulation 28(3)
2	S.I. No. 13 of 2005	European Communities (Insurance Mediation) Regulations 2005	Regulation 38(3)
3	S.I. No. 380 of 2006	European Communities (Reinsurance) Regulations 2006	Regulation 79(3)
4	S.I. No. 60 of 2007	European Communities (Markets in Financial Instruments) Regulations 2007	Regulations 164 and 190(2)
5	S.I. No. 383 of 2009	European Communities (Payment Services) Regulations 2009	Regulation 113(2) and (3)
6	S.I. No. 183 of 2011	European Communities (Electronic Money) Regulations 2011	Regulation 75(2) and (3)
7	S.I. No. 352 of 2011	European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011	Regulation 132(10) and (11)

These amendments relate to what constitutes financial service legislation".

Amendment agreed to.

Schedule 1, as amended, agreed to.

SCHEDULE 2

Vice Chairman

Amendments Nos. 117 to 121, inclusive, are related and will be discussed together.

Deputy Michael Noonan

I move amendment No. 117:

In page 41, between lines 18 and 19, to insert the following:

“

2	Section 18D(2)	In paragraph (a) after “Bank” insert “or with one or more persons with relevant knowledge of any of the matters specified in section 24(1) (or with both)”.
3	Section 24(2)	(a) In paragraph (c) substitute “Parliament,” for “Parliament, or”. (b) In paragraph (d) substitute “member, or” for “member.” and insert the following after that paragraph: “(e) performs a pre-approval controlled function (within the meaning given by section 22 of the Central Bank Reform Act 2010) or has what in the opinion of the Minister constitutes a significant shareholding in a regulated financial service provider, (f) has been adjudged bankrupt (either in the State or elsewhere) or has entered into a composition with his or her creditors, or (g) has been convicted of an offence (either in the State or elsewhere) and sentenced to serve a term of imprisonment for the offence.”.
4	Section 32B(2)	In paragraph (a) substitute “2016” for “2011”.
5	Part IIIA	Before section 32L substitute the following for the Chapter heading: “Chapter 3A Accountability”.

”.

These amendments relate to changes to the qualifying criteria for the Central Bank Commission and technical matters.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 118:

In page 41, lines 19 to 32, to delete item 2.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 119:

In page 41, between lines 32 and 33, to insert the following:

“

3	Section 32L(3)	Delete “and” at the end of paragraph (a) and insert the following paragraph: “(aa) the Bank in relation to the exercise of its powers under Part 2 of the Central Bank (Supervision and Enforcement) Act 2013, and”.
4	Section 33AN	In the definition of “contravene” substitute the following for paragraph (b): “(b) aiding, abetting, counselling or procuring a person to commit a contravention, and”.

".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 120:

In page 41, to delete lines 33 to 38 and substitute the following:

“

3

Section 57BC

Insert the following after subsection (7): “(8) The Minister may from time to time advance to the Council, out of moneys provided by the Oireachtas, such sums as the Minister may determine for the purposes of the performance of the functions relating to superannuation conferred on the Council by this Act.”.

".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 121:

In page 42, to delete lines 4 to 15 and substitute the following:

"

4	Schedule 2, Part 1	(a) Substitute the following for item 38:
		" 38 - No. 23 of 2010 - Central Bank Reform Act 2010 - Parts 3 and 4 ".
		"(b) Insert the following". No. 27 of 1992 - Financial Transfers Act 1992 - Section 4 No. 2 of 2005 - Criminal Justice (Terrorist Offences) Act 2005 - Section 42(6) No. 13 of 2009 - Financial Services (Deposit Guarantee Scheme) Act 2009 - The whole Act No. _ of 2013 - Central Bank (Supervision and Enforcement) Act 2013 - The whole Act other than section 54

" ".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 122:

In page 42, to delete lines 16 to 24 and substitute the following:

“Section 5(1).

PART 2

Amendments of Central Bank Act 1971

Item (1)	Provision affected (2)	Amendment (3)
1	Section 2(1)	In paragraph (d) of the definition of “related body” substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.
2	Section 7(1)	Delete “on behalf of any other person”.

                                                                                                    ”.

This corrects a cross-reference.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 123:

In page 42, to delete lines 25 to 42 and substitute the following:

“Section 5(1).

PART 3

Amendment of Central Bank Act 1997

Item (1)	Provision affected (2)	Amendment (3)
1	Section 32A(5)(b)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.

”.

This corrects a cross-reference.

Amendment agreed to.

Vice Chairman

Amendments Nos. 124 and 125 are related and will be taken together by agreement.

Deputy Michael Noonan

I move amendment No. 124:

In page 43, between lines 4 and 5, to insert the following:

“

1	Section 3	Substitute the following for the definition of “authorised officer”: “ ‘authorised officer’ means an authorised officer appointed under Part 3* of the Central Bank (Supervision and Enforcement) Act 2013;”.
2	Section 23	(a) Substitute the following for subsection (1): “(1) A regulated financial service provider shall not appoint a person to perform a pre-approval controlled function unless the Bank has approved in writing the appointment of the person to perform the function.”. (b) In subsection (6)(b) substitute “(a) to (h)” for “(a) to (g)”.

                                                                                                                                                ”.

These amendments correct references and provide for delegation of functions within the Central Bank concerning fitness and probity. Amendment No. 125 rewords the provision on international co-operation with regulators, which was introduced into the Central Bank Acts at the end of last year.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 125:

In page 43, after line 26, to insert the following:

“

3

Section 52

(a) Insert the following after subsection (2): “(2A) The Bank may at its discretion appoint a suitably qualified person (including a person who is not an officer or employee of the Bank) to perform a function (or any part of a function) of the Bank under this Part, other than any function of making regulations or issuing codes, if the Bank considers it necessary or appropriate to do so to ensure that the functions of the Bank under this Part are performed efficiently and effectively.”. (b) In subsection (3)— (i) substitute “, (2) and (2A)” for “and (2)”, (ii) substitute “any” for “either”, and (iii) substitute “, the Head of Financial Regulation or the Bank” for “or the Head of Financial Regulation”.

4

Section 54 (inserted by the Credit Union and Co-operation with Overseas Regulators Act 2012)

Substitute the following section: “Co-operation with Member State authorities or third country authorities. 54.— (1) In this section ‘Member State authority or third country authority’ means an authority in a jurisdiction other than that of the State duly authorised to perform functions similar to any one or more of the statutory functions of the Bank. (2) At the request of a Member State authority or a third country authority to do so in relation to any matter, the Bank may— (a) require information on the matter about which the Bank has required or could require the provision of information or the production of documents under any provision of financial services legislation, or (b) authorise one or more than one authorised officer to exercise any of his or her powers for the purposes of investigating the matter. (3) In deciding whether or not to exercise any of its powers under subsection (2), the Bank may take into account in particular: (a) whether in the country or territory of the Member State authority or third country authority, corresponding assistance would be given to an authority duly authorised in the State to perform functions corresponding to functions exercised by the Member State authority or third country authority; (b) whether the case concerns the breach of a law, or other requirement, which has no close parallel in the State or involves the assertion of a jurisdiction not recognised by the State; (c) the seriousness of the case and its importance to persons in the State; (d) whether it is otherwise appropriate in the public interest to give the assistance sought.

(4) The Bank may decide that it will not exercise any of its powers under subsection (2) unless the Member State authority or third country authority undertakes to make such contribution towards the cost of such exercise as the Bank considers appropriate. (5) Subsections (3) and (4) do not apply if the Bank considers that the exercise of its power is necessary to comply with any obligation created or arising by or under the Treaties governing the European Union. (6) If the Bank authorises an authorised officer for the purposes of subsection (2)(b), the Bank may direct the authorised officer to permit a representative of the Member State authority or third country authority to attend, and take part in, any interview conducted for the purposes of the investigation of the matter concerned. (7) A direction under subsection (6) is not to be given unless the Bank is satisfied that any information obtained by a Member State authority or third country authority as a result of the interview will be subject to obligations of non-disclosure of information similar to those imposed on the Bank in section 33AK of the Act of 1942. (8) A person shall not be required for the purposes of the exercise of any power under this section to answer any question tending to incriminate the person.”.

".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 126:

In page 43, after line 26, to insert the following new Part:

“Section 5(1).

PART 5

Amendment of Central Bank and Credit Institutions (Resolution) Act 2011

Item (1)	Provision affected (2)	Amendment (3)
1	Section 18(2)	Substitute “supervisory directives” for “supervisory enactments”.

                                                                                                    ”.

This corrects a typo.

Amendment agreed to.

Schedule 2, as amended, agreed to.

SCHEDULE 3

Vice Chairman

Amendments Nos. 127 and 128 are related and will be taken together by agreement.

Deputy Michael Noonan

I move amendment No. 127:

In page 44, lines 3 to 28, and in page 45, lines 1 to 13, to delete Parts 1 to 4.

These amendments delete references to repeals that have been given effect already under legislation at the end of 2012.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 128:

In page 45, to delete lines 14 to 28 and substitute the following:

“Section 5(2).

PART 5

Amendments of Investment Intermediaries Act 1995

Item (1)	Provision affected (2)	Amendment (3)
1	Section 2(1)	In the definition of “authorised officer” substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.
2	Section 20(6)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 129:

In page 45, to delete lines 29 to 48 and in page 46 to delete lines 1 to 50 and substitute the following:

“Section 5(2).

PART 6

Amendments of Credit Union Act 1997

Item (1)	Provision affected (2)	Amendment (3)
1	Section 91	Substitute the following for subsection (1): “(1) If required to do so by notice in writing served by the Bank at any time— (a) a credit union, (b) any person who is or has been an officer, member, voluntary assistant, agent or liquidator of a credit union, and (c) any other person who has in his or her possession or power any books or documents relating to a credit union,        shall furnish to the Bank such books or documents which relate to the credit union and are in the possession or power of the credit union or such person and such information relating to the business of the credit union as may be specified in the notice and as may be reasonably required by the Bank in the exercise of its powers under this Act.”.
2	Section 93(1)	Substitute the following for paragraph (b): “(b) ‘agent’ has the same meaning as in section 20* of the Central Bank (Supervision and Enforcement) Act 2013.”.
3	Section 95	In subsection (1) substitute “, after the exercise by an authorised officer of any of his or her powers under Part 3** of the Central Bank (Supervision and Enforcement) Act 2013,” for “, after an inspection under section 90,”.
4	Section 95A (inserted by the Credit Union and Co-operation with Overseas Regulators Act 2012)	In subsection (1) substitute “after the exercise by an authorised officer of any of his or her powers under Part 3** of the Central Bank (Supervision and Enforcement) Act 2013” for “after an inspection under section 90”.
5	Section 96(1)	Substitute “after the exercise by an authorised officer of any of his or her powers under Part 3** of the Central Bank (Supervision and Enforcement) Act 2013” for “after an inspection under section 90”.
6	Section 186(3)	Insert “or Part 3** of the Central Bank (Supervision and Enforcement) Act 2013” after “this Act”.

”.

This updates references in the Credit Union Act 1997.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 130:

In page 47, to delete lines 5 to 50 and substitute the following:

“

1	Section 9	(a) Substitute the following for subsection (1): “(1) In this section “Act of 2013” means the Central Bank (Supervision and Enforcement) Act 2013.”. (b) Substitute “Part 3* of the Act of 2013” for “Part 5 of the Act of 2010” in each place.
2	Section 33(2)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.

".

This updates references.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 131:

In page 48, lines 1 to 7, to delete Part 8.

This deletes references that are no longer needed.

Amendment agreed to.

Schedule 3, as amended, agreed to.

SCHEDULE 4

Vice Chairman

Amendments Nos. 132 to 136, inclusive, are related and will be taken together by agreement.

Deputy Michael Noonan

I move amendment No. 132:

In page 49, to delete lines 3 to 29.

These are technical amendments.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 133:

In page 50, to delete lines 8 to 21 and substitute the following:

“

1	Regulation 3(1)	In the definition of “authorised officer” substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Act 2010”.
2	Regulation 6(7)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.
3	Regulation 14(1)(b)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.
4	Regulation 147(1)(g)(ii)	Substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.

".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 134:

In page 50, to delete lines 29 to 47 and substitute the following:

“

1	Regulation 3(1)	In the definition of “authorised officer” substitute “Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “Part 5 of the Central Bank Reform Act 2010”.
2	Regulation 9(7)	Substitute “under Part 3* of the Central Bank (Supervision and Enforcement) Act 2013” for “under Part 5 of the Central Bank Reform Act 2010”.

".

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 135:

In page 51, before line 1, to insert to insert the following new Part:

"Section 5(3).

PART 6

Amendment of European Communities (Reorganisation and Winding-up of Credit Institutions) Regulations 2011

(S.I. No. 48 of 2011)

Item (1)	Provision affected (2)	Amendment (3)
1	Regulation 2(2)	Insert the following subparagraph after subparagraph (x): “(xi) a direction given by the Bank under Part 5 of the Central Bank (Supervision and Enforcement) Act 2013 that contains a declaration that it or part of it is made with the intention of preserving or restoring the financial position of a credit institution, where the direction is capable of affecting the rights of third parties existing before the direction comes into effect.”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 136:

In page 51, to delete lines 1 to 40.

Amendment agreed to.

Schedule 4, as amended, agreed to.

SCHEDULE 5

Deputy Michael Noonan

I move amendment No. 137:

In page 52, paragraph 1(1), lines 5 and 6, to delete all words from and including “the employee's” in line 5 down to and including “consent” in line 6 and substitute the following:

“the employee’s parent or guardian, with the consent of the employee”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 138:

In page 54, paragraph 3(2)(b), line 25, to delete “, or both”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 139:

In page 54, paragraph 3(4), line 36, to delete “the employee concerned may” and substitute the following:

“the employee concerned (or, in the case of an employee who has not reached the age of 18 years, the employee’s parent or guardian, with the consent of the employee) or, with the consent of the employee, any trade union of which the employee is a member, may”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 140:

In page 55, paragraph 3, to delete lines 1 to 21.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 141:

In page 55, paragraph 4(1)(a), line 30, to delete “with his or her consent” and substitute “, with the employee’s consent”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 142:

In page 55, paragraph 4(3), lines 51 and 52, to delete “and ending on the day the order is made” and substitute the following:

“and ending on the day immediately before the day on which the order of the Circuit Court is made”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 143:

In page 56, paragraph 5(1), line 8, to delete “paragraph 2(1)” and substitute “paragraph 2(1)(b)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 144:

In page 56, paragraph 5(2), line 17, to delete “paragraph 2(1)” and substitute “paragraph 2(1)(b)”.

Amendment agreed to.

Deputy Michael Noonan

I move amendment No. 145:

In page 56, after line 21, to insert the following:

“Amendment of Protection of Employees (Employers’ Insolvency) Act 1984.

6. Section 6 of the Protection of Employees (Employers’ Insolvency) Act 1984 is amended—

(a) in subsection (2)(a)—

(i) in subparagraph (xxviii) by deleting “and” after “that Schedule,”,

(ii) in subparagraph (xxix) by substituting “that Act, and” for “that Act.”, and

(iii) by inserting the following subparagraph after subparagraph (xxix):

“(xxx) any amount which an employer is required to pay by virtue of a decision of a rights commissioner under paragraph 1(2)(b) of Schedule 5 to the Central Bank (Supervision and Enforcement) Act 2013 or a determination by the Labour Court under paragraph 2(1)(b) of that Schedule.”,

(b) in subsection (2)(b), by substituting “, (xxix) or (xxx)” for “or (xxix)”,

(c) in subsection (2)(c), by substituting “, (xxix) or (xxx)” for “or (xxix)”, and

(d) in subsection (9), in the definition of “relevant date”, by substituting “, (xxix) or (xxx)” for “or (xxix)”.”.

Amendment agreed to.

Schedule 5, as amended, agreed to.

TITLE

Deputy Michael Noonan

I move amendment No. 146:

In page 7, line 15, to delete “CENTRAL BANK ACTS 1942 TO 2010” and substitute “CENTRAL BANK ACTS 1942 TO 2012”.

Amendment agreed to.

Question proposed: "That the Title, as amended, stand part of the Bill."

Deputy Pearse Doherty

Under section 31 there is provision for an individual who does not comply with the appointed person. He is subject to a class A fine of €5,000, which can increase to €250,000. What protection is there to remove a person from a financial institution? If someone is obstructing the work of an appointed person, he or she can be subject to a fine and some of them would be wealthy enough to accept that. Is there provision for disqualification from a role in a financial institution? I am not just talking about people at director level but at other levels too, if someone has obstructed this sort of inquiry from the Central Bank.

Deputy Michael Noonan

It could be grounds for a fitness and probity investigation and it would then fall into that space. If upheld it would carry the penalties associated with that legislation.

Deputy Pearse Doherty

What level does the fitness and probity investigation go down to? Would that not be only at very senior level?

Deputy Michael Noonan

It would go down to anyone dealing with compliance issues or anyone interacting with customers.

Deputy Pearse Doherty

Section 43 deals with the protection of whistleblowers and protected disclosures. Understandably, the section allows for the bank to disclose the identity of the person in a number of cases, such as tribunals, without the person's consent. The person should be notified, however, that disclosure of his identity is taking place, not so that there is obstruction but so that consent is obtained. It is a minor issue.

Deputy Michael Noonan

That is reasonable. I will read the note on amendment No. 43 and then consider whether an amendment is necessary for Report Stage.

Subsection (5) in the published Bill provides for the protection of the identity of the person making the disclosure, except with their consent, or where divulging the identity of the person is necessary for an investigation of the matter to which the disclosure relates. Investigation is meant here in its broader sense to include an examination of the matter or any proceedings that may follow. This amendment specifically lists a number of situations under financial services legislation where such a disclosure may be required, including an administrative sanction inquiry, an appeal before the Irish Financial Services Appeal Tribunal or a fitness and probity hearing.

We can discuss this on Report Stage, because it seems to be a good idea. If provision has not been made for it elsewhere, I will draft an appropriate amendment.

I wish to notify the committee that I am considering a number of new amendments on Report Stage.

I propose to present a number of amendments to the Credit Institutions (Stabilisation) Act 2010 and the Central Bank and Credit Institutions (Resolution) Act 2011. These are designed to clarify and streamline the operation of those Acts. I am considering an amendment seeking the removal of the statutory prohibition on the third country bank branches being established in Ireland. It would be an enabling clause which would be consistent with the 2006 Banking Resolution directive to ensure that national legislative frameworks cannot favour third countries over EU-EEA banks. Both of these amendments are subject to further policy and drafting consideration by the Office of the Attorney General. Apart from these proposals I am also considering a number of technical amendments and of course, I would like to repeat the commitments I made to Deputies McGrath and Doherty to consider amendments to issues they raised with me in the course of this debate.

Question put and agreed to.

Vice Chairman

I thank the Minister and his officials for attending.

Deputy Michael Noonan

I thank the Deputies who contributed. I thank the clerk and the committee secretariat. I thank my own staff for dealing so expeditiously with the Committee Stage of the Bill.

Bill reported with amendments.