Central Bank launches guidance on enforcement sanctions

• Guidance will provide greater clarity on the Central Bank’s approach to enforcement sanctioning factors
• Guidance seeks to promote an improved culture of compliance in firms by clarifying the behaviours which may aggravate or mitigate a breach of financial services law.
• Lack of co-operation with the regulator can have a considerable bearing on subsequent sanctions

The Central Bank of Ireland has today published a new guide to sanctions imposed under the Administrative Sanctions Procedure (ASP) (PDF 632KB) for the financial services sector.

This ASP Sanctions Guidance increases transparency by providing greater clarity on the Central Bank’s general approach to sanctioning of firms and individuals. It provides guidance on the application of a variety of factors relevant to sanctioning under the ASP, including cooperation, self-reporting and remediation.

The Guidance should help to promote an improved culture of compliance in financial firms by clarifying the behaviours which may aggravate or mitigate a breach of financial services law.

Speaking at the launch of the guidance, Derville Rowland, Director General, Financial Conduct said:

“Since 2006, we have imposed almost €100 million in fines in over 130 settled cases under the ASP. It is worth noting too, that the Central Bank’s sanctions procedure has withstood legal challenge and has been found to be constitutionally sound.

“Over the years, our public statements have become more detailed, and we always try to highlight the factors that were taken in to account when determining the appropriate sanctions.

“However, our experience of settlement discussions has revealed these factors are frequently misunderstood. Incredibly, some firms and their legal advisers appear to believe that they should get credit for co-operating with the regulator for settling - even after adopting an obstructionist attitude.

“I remind each and every firm that cooperation with the regulator is a basic expectation of ours in the context of engagement with firms - whether in a supervisory or enforcement context – and that the lack of cooperation can have a considerable bearing on subsequent sanctions.

“Let me be very clear that while the Central Bank absolutely expects firms to prevent wrongdoing in the first place, they can undo some of those wrongs by demonstrating a positive culture in terms of how they deal with regulatory breaches. Or put another way, it is never too late to do the right thing.”

Further Information on the Administrative Sanctions Procedure (ASP)