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Financial Services Regulation.

Dáil Éireann Debate, Wednesday - 16 September 2009

Wednesday, 16 September 2009

Questions (132)

Paul Kehoe

Question:

286 Deputy Paul Kehoe asked the Minister for Finance his views on imposing a ban on all commercial banks getting involved in speculative investment other than deposit accounts (details supplied); and if he will make a statement on the matter. [31296/09]

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Written answers

My role as Minister for Finance with respect to financial regulation is to bring forward legislative proposals to the Oireachtas for the regulation and supervision of the financial services sector. That statutory legislative framework places responsibility for the day-to-day supervision of financial institutions with the Financial Regulator. The Regulator is statutorily independent in the exercise of its supervisory functions.

The Regulator's statutory consumer protection mandate is aimed at helping consumers make informed decisions in a safe and fair marketplace. In this context, the ‘General Principles' of the Regulator's August 2006Consumer Protection Code (Code) stipulates that a regulated entity must ensure that in all its dealings with customers and within the context of its authorisation, it acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market.

In addition, the Code's ‘Common Rules for all Regulated Entities', sets out specific requirements with which a regulated entity must comply in areas such as its terms of business, provision of information to the consumer, preservation of a consumer's rights, knowing the consumer, suitability, unsolicited contact (cold calling), disclosure requirements, handling complaints, conflicts of interest, Chinese walls and compliance with the Code. Chapter 6 of the Code contains specific requirements in relation to investment products including, in relation to tracker bonds, a requirement to warn the customer that the value of an investment may go down as well as up.

Furthermore, the Regulator's July 2006Minimum Competency Requirements set out minimum standards across all financial service providers which are applicable to individuals who, on a professional basis, as, for, or on behalf of, a regulated firm provide advice to consumers on retail financial products, arrange or offer to arrange retail financial products for consumers or undertake certain specified activities. Retail financial products include shares, bonds and other investment instruments and savings, investment and pension products. Regulated entities are required to comply with both the Code and Minimum Competency Requirements as a matter of law and the Regulator will investigate any matter brought to its attention where it appears that these, or any other regulatory requirement, may have been breached by an entity.

Any allegation of mis-selling of financial products is a serious matter and will be treated as such by the relevant authorities and any complaint regarding the conduct of a regulated entity should be brought to the attention of the Regulator for investigation. Where found by the Regulator to have breached its obligations, a regulated entity may be subject to financial or other sanctions, up to and including withdrawal of its authorisation.

The Deputy may wish to note that where a customer has a complaint regarding his / her treatment which has not been resolved through the internal complaints resolution systems of a regulated entity, the customer may also bring the matter to the attention of the Financial Services Ombudsman for investigation. I am satisfied therefore that adequate provisions are in place to regulate the activities to which the Deputy refers. However, if it considered that additional powers are required to address such matters, I am open to considering appropriate suggestions for changes to the statutory framework.

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