Publication of the Central Bank (Individual Accountability Framework) Bill 2022

• Ireland

• Financial services and markets regulation - Briefings and articles
• Financial services

03-08-2022

The Central Bank (Individual Accountability Framework) Bill 2022 (“Bill”), together with accompanying Explanatory Memorandum, was published on 28 July.

It is currently anticipated that the Bill will be enacted by end-2022. Once enacted, the Central Bank of Ireland (“CBI”) will shortly thereafter issue detailed draft implementing regulations and guidance, for public consultation. Following this period of public consultation and subsequent finalisation of the CBI regulations and guidance, the substance of the new regime will enter into force.

The Bill, to a large extent, mirrors the substance of the General Scheme of the then proposed Bill (“General Scheme”), published in July 2021. There are, however, a number of important differences.

This briefing note outlines a number of the key points of the Bill, specifically relating to;

• The Senior Executive Accountability Regime (“SEAR”)

• The Conduct Standards

• Changes to the Fitness & Probity regime

• Changes to the CBI’s Administrative Sanctions Procedure (“ASP”)

Important points to note in the Bill, discussed further below, include:

• The requirement on individuals to “take any steps that it is reasonable in the circumstances for the person to take” to ensure compliance with relevant requirements. This requirement appears to be a higher standard than the standard of “reasonable steps” set out in the General Scheme and may be the subject of debate during the Oireachtas process leading to enactment of the Bill.

• The CBI will be able to investigate individuals under the fitness and probity regime even if they are no longer in a Controlled Function (“CF”) role, if they were in a CF role within 6 years of commencement of the CBI’s investigation. Also, the length of time an individual may be suspended while the CBI is investigating the individual under the fitness and probity regime has been significantly extended.

• The Bill contains a significant number of amendments to investigation processes under the ASP and fitness and probity regimes, including for purposes of taking account of the Supreme Court’s 2021 Zalewski judgement which addressed standards of fairness to be applied in the administration of justice. For example, for settlements under the ASP, where the breaches in question are admitted (which the CBI would typically expect), sanctions under the settlement could not take effect without High Court confirmation.

Our multi-disciplinary team has been helping businesses across all affected sectors prepare for the new regime. We can help you understand your obligations and practically implement any changes to ensure the requirements are properly embedded and remain fit for purpose.

For further information, see our client update here.