In the event of non-compliance with a legal requirement or code of conduct binding on a financial institution, the Financial Regulator may conduct investigations and impose sanctions.
The first step, if the Financial Regulator suspects that on reasonable grounds that a contravention is taking place, it can hold an inquiry. It must give notice to the provider specifying the grounds on which the suspicions are based, specifying the time and place of an enquiry and provide it with the opportunity to make submissions about the matter. The Financial Regulator must take account of the submissions.
The enquiry is to be conducted with as little formality or a technicality and as quickly as possible, as a proper consideration of the matter allows Enquires are generally held in public but may be held in private where the regulator believes information of a confidential nature or where there is another good reason. Witnesses may be summoned answer by notice.
At the conclusion, the regulator shall notify whether it has found that the prescribed contravention has taken place, the grounds of the finding and the proposed sanction.
Where the regulated entity acknowledges that there has been a prescribed contravention, an enquiry may be held to determine sanctions to be imposed. There may be consent ton the composition of sanctions.
Sanctions may include
A caution or reprimand,
- a direction to refund or repay money charged or withheld
- a monetary penalty not exceeding €5 million for corporates and €500,000 for individuals,
- a direction disqualifying a person from being concerned in the management of a regulated entity
- direction to cease contravention, direction to pay costs.
The level of a sanction depends on whether the contravention was
- deliberate,reckless or negligent
- its duration or frequency,
- systematic weaknesses,
- the extent of departure from the norm
- impact on the financial markets,
- nature and extent any crime facilitated,
- whether there are a number of issues collectively
- the potential for pending criminal proceedings.
- the conduct of the regulated provider after the contravention the previous record general consideration.
No sanctions may be imposed if the person, financial services provider or its managers have been found guilty of a criminal offence involving that contravention. It a monetary penalty is imposed, no criminal offence may be prosecuted. Only one penalty may be imposed in respect of the same conduct if it constitutes multiple offences. The extent of penalty should not impair the ability to conduct business.
Details of sanctions are usually published.
If the regulated provider disagrees with findings, the matter may be appealed to the Financial Services Appeal Tribunal or High Court.
Persons involved in the management of a regulated provider may be subject to personal sanctions in respect to prescribed contraventions. This includes cautions or reprimand, fine of up to €500,000,disqualification from management, cessation of the contravention, order to pay costs.
An agreement may be entered to resolve suspected contraventions without a formal enquiry or during the course of an enquiry.
These financial services consumer panel (now the consumer advisory panel) and the industry panel (now the industry advisory panel) must be consulted before certain documents are made. This includes codes of conduct. Each panel has a mix of representatives of the appropriate groups.
The consumer panel monitors and provides comments and suggestions on policy or regulatory documents. The industry panel provides comments from the industry perspective.
The registrar of credit unions is established within the Financial Regulator, in relation to the regulation of credit union.