Dáil Éireann Debate, Tuesday - 18 September 2012
324. Deputy Peter Mathews asked the Minister for Finance his views on whether the Central Bank of Ireland regulates all providers of pensions and financial services in accordance with the law; his views on whether the current laws are adequate to protect investors in pensions and financial services; and if he will make a statement on the matter. [38783/12]
Amharc ar fhreagraThe Central Bank is responsible for the regulation of regulated financial service providers. Pension schemes or products are not regulated by the Central Bank but are separately regulated by the Pensions Board under the aegis of the Minister for Social Protection. The Central Bank (Supervision and Enforcement) Bill 2011 is currently before the Oireachtas. The Bill strengthens the ability of the Central Bank to impose and supervise compliance with regulatory requirements and to undertake timely prudential interventions. It also provides the Central Bank with greater access to information and analysis and will underpin the credible enforcement of Irish financial services legislation in line with international best practice.
Section 37 of the Bill gives the Central Bank far-reaching powers of direction, which can be issued on grounds including where the regulated financial service provider is conducting business in such a manner as to jeopardise or prejudice monies held by or controlled by it on behalf of customers. Section 40(2)(l) of the Bill provides the Central Bank with the power to make regulations setting out the standards to be met, and the procedures, systems and checks to be adopted, by regulated financial service providers for dealing with and holding the assets and money of customers. This includes provisions on the safeguarding of customers’ rights, in particular in the event of insolvency; the use to which customers’ assets and money may be put; and the management of customer accounts.
Further changes to be proposed at Committee Stage of the Bill will provide further regulation-making powers to the Central Bank which are specifically targeted at enabling the Central Bank to support the protection of client assets. These powers will facilitate communication between the Central Bank and customers and clients of a regulated financial service provider, which has been identified by the Central Bank as an important tool for investigations on compliance with client assets requirements.
Section 45 of the Bill provides a means of restitution, via a Central Bank application to the High Court, where a person has been unjustly enriched or where others have suffered loss or other adverse effects arising from the commission of an offence or a prescribed contravention. This provision is to be further enhanced at Committee Stage with a proposal which will make it applicable to managers who commit offences or prescribed contraventions. Other proposed Committee Stage amendments will provide for customer redress and compensation mechanisms for consumers.
In relation to investment firms, the Markets in Financial Instruments (MiFID) Regulations provide specific investor protections by setting out rules governing the relationship between investment firms and their clients. Proposals for revised MiFID legislation, currently under negotiations in the Council of the EU and in the European Parliament, aim to strengthen the protection of investors further.
