The Government agrees to the establishment of a Single Regulatory Authority at the earliest date possible. On 20th October 1998, the Irish Government agreed in principle to the establishment of a Single Regulatory Authority (SRA) for the financial services sector at the earliest date possible, and also to the immediate establishment of an Implementation Advisory Group to progress the work necessary to achieve this.
Note! In the context of what we have undertaken within this website book, pertinent elements from ‘The Report of the Implementation Advisory Group on a Single Regulatory Authority’ (generally referred to as ‘The McDowell Report’), as set out below, have been used to explain the sequence of events leading to the establishment of what would be the Irish Financial Services Authority (IFSRA).
On 19th May 1999, the Implementation Advisory Group on a Single Regulatory Authority submitted its Report (The McDowell Report) to the Government.
‘The Report of the Implementation Advisory Group on a Single Regulatory Authority’
(The McDowell Report)
Background to Establishment of Implementation Advisory Group
(Referenced from the McDowell Report, Chapter 1)
The Implementation Advisory Group was chaired by Mr. Michael McDowell, Senior Counsel, and contained nine other members; these included the Deputy ‘Director General and Secretary’ of the Central Bank, the Assistant Secretary of the Department of Finance, and a Director of the Department of Finance who was appointed Secretary of the Group.
NOTE !
The presence within the Implementation Advisory Group of those from senior positions within the Central Bank and the Department of Finance has been highlighted here because, notwithstanding the Advisory Group’s recommendation that the Single Regulatory Authority (SRA) should be a completely new organisation outside, and independent of, the Central Bank, it was a minority view, supporting the establishment of the new Single Regulatory Authority within a restructured Central Bank, that prevailed.The fact that, ultimately, the final decision, while political, would be steered by those within the Department of Finance and that, historically, there was also a somewhat incestuous symbiotic relationship between the Central Bank and the Department of Finance, must be seen as having a subvertive impact on the defining concerns of the majority of the Advisory Group.
Current (May 1999) Role and Functions of Supervisors / Regulators of the Financial Services Sector
(Referenced from the McDowell Report, Chapter 2)
The Department of Finance was responsible for the development of the LEGAL FRAMEWORK for most of the regulation of the Financial Services Sector carried out by the Central Bank of Ireland.
The Central Bank, however, as lead regulator for financial groups headquartered in Ireland, had ULTIMATE supervisory authority for all of a group’s financial activities. In the case of the main Irish banks, for example, this included their stockbroking, funds management and life assurance operations.
The Office of the Director of Consumer Affairs (ODCA) had considerable powers, as the Director, to bring proceedings for breaches and offences under various Statutory Enactments. But, [as already highlighted in previous Sections under Statutory Intervention] these breaches and offences first had to come to Director’s knowledge ── and the Self Regulatory systems operated by the Financial Services Institutions under the Ombudsman Schemes (see Section 2.6.5.), effectively, ensured that the issues involved were kept well away from the ODCA.
NOTE !
While the Central Bank had ultimate supervisory authority for all of a Financial Institution’s financial activities, it really only concerned itself with monitoring the financial stability of each Institution.
Even when, in November 2000, it did issue its Code of Conduct Requirements under power of Section 37 of the Investment Intermediaries Act 1995, the Regulatory Regime practised by the Irish Central Bank was such that there was no follow-up monitoring by Central Bank officials to check compliance by the Financial Services Institutions with these Requirements.
The bottom line was that the Central Bank did not concern itself in the least with ‘how those within Financial Services Institutions conducted their business’.
Add to this the fact that, within its Code of Conduct Requirements, the Central Bank had taken a positive step that contrived a whitewash of Fraud which protected those within these same unregulated (i.e. Self Regulated) Financial Services Institutions from the justice of both Common Law and Criminal Law, an action that, as we have seen above, would also give effect to a whitewash of the true Statute of Limitations rights of the victims of such Fraud. (See the boxed NOTE! at the end of Section 2.6.3.)
Single Regulatory Authority – Roles and Function
(Referenced from the McDowell Report, Chapter 4)
In order to create and maintain public confidence in the Single Regulatory Authority, the Advisory Group considered that the Authority should have a high degree of accountability to the people through the Minister for Finance and the Oireachtas (Parliament). This accountability was the defining concern of the Group in deciding its recommendations with respect to the structure of the new Single Regulatory Authority.
In this regard, the Group, in the course of its deliberations, particularly considered a speech, titled, ‘Who Regulates the Regulators?’, made by Mr. David Byrne, SC, the Attorney General, at University College Dublin Law Society on Thursday, 12th November, 1998.
Dealing with the issue of the necessity for accountability of Regulators without interference with their independence, the Attorney General stated:
“Most importantly, a comprehensive, statutory system must be devised through which Regulators are required to render account to the legislature and, ultimately, to the people. The mechanisms chosen in each individual case should be agreed at the outset and disclosed to the public.
Anything less represents an erosion of the principles of democracy and political accountability, and weakens the democratically elected branches of Government ──── the legislature and the executive.”
The Group recommended that, as well as being responsible for the prudential regulation of the various Financial Services, the SRA should be given statutory responsibility for consumer issues related to those entities and that all financial services consumer-protection related functions currently (in May 1999) undertaken by existing authorities should be transferred to it.
The Group also recommended that a statutory position of Customer Protection Director, reporting directly to the CEO, should be established within the SRA.
The Group’s expressly stated opinion was that the term ‘consumer’ embraces both ‘private individuals’ and ‘business interests’, and the intended impact of the Group’s recommendations should be seen in light of this opinion.
The Group recommended the establishment of two panels, representative of consumer and industry interests, to suggest initiatives which they wish to see pursued, and the establishment of a single Statutory Ombudsman scheme, to operate independently of the SRA, for all financial services provided by regulated entities.
Structure and Location of the Single Regulatory Authority
(Referenced from the McDowell Report, Chapter 6)
After lengthy and careful deliberation, the Group concluded that it should recommend to the Government the establishment of a Single Regulatory Authority as a completely new organisation outside, and independent of, the Central Bank.
In relation to such a broadly based and important institution in the economic life of the State, the Group expressed its belief that full public accountability was of paramount importance.
The Group pointed out the fact that there was no significant international precedent for combining such a large range of regulatory responsibilities, as was proposed for the SRA, within a conventional Central Bank, and that no EU member state had done so or proposed to do so.
Having regard to its own criterion that the SRA should be fully accountable in the discharge of its functions in a transparent way, and taking account of the views expressed by the Attorney General on the importance of the accountability of Regulators (see above), the Group was of the view that the Central Bank, as then constituted, did not afford the degree of accountability recommended by the Group and, as such, was not a suitable unitary agency to discharge the functions of a fully accountable Single Regulatory Authority.
In its deliberations on the merits of establishing a new organisation, the Group concluded that there would be significant benefits from doing so, including the following:
| ♦ | It would provide for singularity of purpose in relation to regulation and customer protection in financial services. |
| ♦ | It would provide a coherent, robust and transparent approach to financial regulation which would promote public and institutional confidence in the financial services industry and in the regulatory process. |
| ♦ | The development of a separate corporate identity would help attract and motivate high quality staff and help to develop staff loyalty. |
| ♦ | All staff would enter the new body on a basis of equality of opportunity which would enhance their commitment to the new body. |
While the Advisory Group, after lengthy and careful deliberation, recommended the establishment of a completely new, independent, organisation outside the Central Bank, the preferred approach of a minority of the Group was to locate the SRA within a restructured Central Bank.
NOTE !
Remember that only three of the nine members comprising the Advisory Group were: the Deputy ‘Director General and Secretary’ of the Central Bank, the Assistant Secretary of the Department of Finance, and a Director of the Department of Finance.
In its September 2002 submission (see Appendix 2/5 cbfsai2) to the Department of Finance on the Department’s ‘Financial Sector Regulation: New Proposals’, the Consumer Association of Ireland (CAI) would draw particular attention to the effective dominance of this Minority View, stating that:
‘the work of the McDowell committee was undermined by an axis combining the Central Bank of Ireland and the Department of Finance in the development of a Minority Report.‘
Minority’s Alternative Model
(Referenced from the McDowell Report, Appendix II)
This model provided for the establishment of a Single Regulatory Authority, with consumer protection functions, within the Central Bank.
Advantages put forward by the Minority in support of this model were that:
(a) There was very considerable support among the entities currently regulated by the Central Bank for it to become the new Regulator.
(b) Criticism of the Central Bank in relation to the exercise of its statutory functions, as prudential regulator, had been non-existent in the context of the submissions received.
(c) It would provide for continuity of expertise.(d)It would help mimimise industrial relations difficulties.
Note! And it was this Minority View that would be ratified by the Legislature.
Outline of Legislation Required and Timeframe for Establishment of a Single Regulatory Authority (SRA)
(Referenced from the McDowell Report, Chapter 9)
The Group considered that the establishment of a Single Regulatory Authority along the lines that it had recommended (i.e. as a completely new organisation outside, and independent of, the Central Bank) could be realistically achieved within one year of a Government decision to proceed.
Financial Services Regulation to come from the Organisational Structure of the existing Central Bank
On 20th February 2001, the Tánaiste (Deputy Prime Minister), who was also Minister for Enterprise, Ms. Mary Harney, and the Minister for Finance, Mr. Charlie McCreevy, announced that the new structure for Financial Services Regulation would be derived from the organisational structure of the existing Central Bank and would be chaired the by the existing Central Bank Governor.
The Ministers also announced their intention to proceed immediately to establish an ‘Interim Board’ for this new Authority on a non-statutory basis which would appoint a Chief Executive and a Director of Customer Protection.
A History of Acquiescence and Collusion !
(Up to February 2001)
In trying to comprehend the decision by the Irish Legislature to derive the new structure for Financial Services Regulation from the organisational structure of the existing Central Bank, consider first the History of the Regulatory Regime in Ireland (this is a résumé, for the period up to 20th February 2001, of what has been already set out in Section 2.6.4):
(1) Consumer Information Order 1978 ── The provisions of this Act, whereby persons in the course of or for the purposes of a business or profession are deemed guilty of a criminal offence for making a fraudulent statement, are explicitly stated as not applying where such fraud, whether by act or omission, has been perpetrated by a person for the purposes of ‘banking business’ authorised by the Central Bank.
A ‘Higher Order’ status under the Law was thus affirmed for those operating within the Financial Services Sector under the authority of the Central Bank.
(2) Insurance Act 1989 ── The Irish legislature again acquiesced to the interests of those within the Financial Services Industry by omitting any Principles regarding Standards and Disclosure (similar to those within the U.K. Financial Services Act 1986) to be applied to any ‘codes of conduct’ prescribed under power of the Act.
As a result, a breach of the Life Assurance / Insurance Industry’s Code of Conduct, which was prominently displayed by those dealing in Financial Services investment products linked to insurance (i.e. those dealing in Life Assurance and similar-type investment products), carried no statutory consequences whatsoever, and, most particularly in the matter of disclosing any potential conflicts of interest, was treated by those within the Financial Services Industry as if it did not exist.
(3) The Self Regulation Ombudsman Schemes ── The Credit Institutions Ombudsman Scheme and the Insurance Ombudsman Scheme set up by the Financial Services Industry were allowed to operate under highly restrictive Terms of Reference contrived by the Industry itself and to prosecute a Self Regulation system that ensured that pervasive abuses by which those within the Financial Services Sector enriched themselves at the expense of consumers / customers / clients would not be called into question.
These Self Regulation Ombudsman Schemes provided an exclusive blocking mechanism for those within the Financial Services Sector that ensured their protection against prosecution for such abuses, both under Common Law and under Criminal Law.
(4) Consumer Credit Act 1995 ── In the process of enacting this Act, the Irish legislature, by a positive act of omission, ensured that the proposed express Disclosure requirements within the forerunner Consumer Credit Bill (1994), which were nothing more than a codification of Common Law duty, were denied statutory effect within the Act.
(5) Investment Intermediaries Act 1995 ── Under power of this Act, the Central Bank, in June 1996, issued a Code of Conduct for Investment Business Firms that effectively whitewashed Fraud, where such Fraud was perpetrated by a Financial Services Institution or its Management Personnel.
As had been the situation with the Consumer Information Order 1978, the Irish legislature, under the guidance of its Competent Authority, The Central Bank, enacted statutory provisions that both directed and enabled the Central Bank to, effectively, whitewash both the Common Law and Criminal Law to protect the ‘Higher Order’ status of those within the Financial Services Sector.
Bear in mind also that, when the McDowell Report was issued in May 1999, the draft legislative provisions of the Insurance Act 2000 were ‘at an advanced stage’, and that it was known that this Act would be bringing the ‘investment business’ activities of the Life Assurance Companies under the direct regulatory control of the Central Bank.
(6) Insurance Act 2000 ── In November 2000, under power of the Investment Intermediaries Act 1995, the central Bank issued its Code of Conduct (and Advertising) Requirements to be complied with by regulated firms / Financial Services Institutions. This was just one month before the enactment of the Insurance Act 2000.
But, even though, under the Insurance Act 2000 (enacted in December 2000) the ‘investment business’ activities of the Life Assurance Companies were to be brought under the direct regulatory control of the Central Bank from 1st November 2001, and even though the Central Bank would by this time have been well aware of the situation in the United Kingdom, where the widespread abuse of consumers / customers / clients by Life Assurance and Pensions Companies had been exposed, the Central Bank chose to remain silent on the matter of the prevalence of such abuses in Ireland.
Not only that, but those who had perpetrated these abuses were now to be protected by the ‘whitewash of Fraud” umbrella within the Central Bank’s November 2000 Code of Conduct Requirements.
(7) No Statutory Offence, or Consequences, for Fraudulent Misrepresentation by those within the Financial Service Industry ── Even though specific provisions addressing fraudulent conduct by those within the Financial Services Industry had been set down under U.K. Statute since the enactment of the U.K. Financial Services Act 1986, no such provisions were ever enacted under Irish Statute.
Now consider some of the ‘so called’ advantages (those listed above) put forward in the Minority’s Alternative Model in support of the establishment of a Single Regulatory Authority, with consumer protection functions, within the Central Bank:
(a) ‘There was very considerable support among the entities currently regulated by the Central Bank for it to become the new Regulator.’
(b) ‘Criticism of the Central Bank in relation to the exercise of its statutory functions, as prudential regulator, had been non-existent in the context of the submissions received.’
(c) ‘It would provide for continuity of expertise.’
(d)‘It would help minimise industrial relations difficulties. ‘
Essentially, these ‘so called’ advantages, put forward by the Minority, ‘an axis combining the Central Bank of Ireland and the Department of Finance’ (see above), came down to:
The new Single Regulatory Authority should be formed within the existing Central Bank because:
- Those in Power within the Financial Services Industry would favour it.
- Those in Power within the Central Bank would favour it.
- There would be no unwelcome intrusion or interference by outside expertise that could question or alter how those within the Central Bank chose to perform their functions, or that could pose a challenge to its existing hierarchical structure.
As pointed out in the McDowell Report (above) ──── it was the Department of Finance that had been responsible for the development of the LEGAL FRAMEWORK for most of the regulation of the Financial Services Sector carried out by the Central Bank of Ireland, ──── and it was the Central Bank, as lead Regulator for financial groups headquartered in Ireland, that had ultimate supervisory authority for all of a group’s financial activities, including stockbroking, funds management and life assurance operations.
Notwithstanding the prevalence of political lobbying, there can be no reasonable denial but that the systemic acquiescence to the interests of those within the Irish Financial Services Sector that was allowed to pervade the entirety of Irish Financial Services Legislation and Regulation could only have come about with the collusion of parties with considerable influence upon and/or within the respective Legislative Units of the Irish State and the Central Bank.
In what was supposed to be a Democratic State, with its founding principles fortified by a Constitution that proclaimed that ‘All citizens shall be held equal before the Law’, the respective Legislative Units within the Irish State with primary responsibility for Financial Services Legislation, and the State’s Competent Authority (the Central Bank of Ireland) with primary responsibility for Financial Services Regulation, had colluded in the evolution and maintenance of a ‘Higher Order’ of being within Irish society, those within the Financial Services Sector, whose conduct was put beyond the Law as it applied to the rest of Irish citizens.
And NOW, the Department of Finance, guided by its own Legislative Unit which had greatest power and influence in the formulation of Financial Services Legislation, was overruling the recommendations of the the McDowell Report, recommendations that had followed from lengthy and careful deliberation by the Advisory Group, in favour of a Minority Report put forward by an axis combining Senior Officers from this same Central Bank of Ireland and from the Department of Finance itself.
A continuation of this ‘History of Acquiescence and Collusion‘ was inevitable!
CHECK ! ──── The U.K. Timeline
(February 2001)
(1) By the end of 1997, the Review of Personal Pensions Scandal was concluded by the FSA.
(2) From 1998, the FSA undertook the firm-based activity of the Financial Services Industry.
(3) During the summer and autumn of 1999, the FSA undertook a series of targeted supervisory visits to participants in the mortgage endowment market, and the extent of the Endowment Mortgages Scandal began to dawn.
(4) In December 1999, following from the findings of its supervisory visits, the FSA issued a public warning to regulated Financial Services firms.
(5) In December 1999, the FSA Factsheet: ‘Is an Endowment Mortgage right for you?’ was issued.
(6) In January 2000, endowment mortgage providers were directed by the FSA to issue the FSA Factsheet: ‘Your endowment mortgage — what you need to know’ to all their customers.
(7) By October 2000, the FSA had prepared a further Factsheet: ‘Endowment Mortgage Complaints’; this was a further step towards informing consumers as to what might constitute a compensatable cause for complaint.
(8) On 1st December 2000, the provisions of the U.K. Financial Services and Markets Act came into effect. This replaced the U.K. Financial Services Act 1986, consolidated the powers of the FSA and set up the U.K. Financial Ombudsman Service.
(9) From 1st December 2000, the U.K. Financial Ombudsman Service dealt with consumers complaints against Financial Services Providers and took a proactive role in addressing the Endowment Mortgage Scandal.
CHECK ! ──── The Irish Timeline
(February 2001)
(1) IMMEDIATELY AND OTHER PHRASES FROM GOV AND MCD REPORT the Review of Personal Pensions Scandal was concluded by the FSA.
(2) NOTHING DONE the FSA undertook the firm-based activity of the Financial Services Industry.
(3) During the summer and autumn of 1999, the FSA undertook a series of targeted supervisory visits to participants in the mortgage endowment market, and the extent of the Endowment Mortgages Scandal began to dawn.
(4) In December 1999, following from the findings of its supervisory visits, the FSA issued a public warning to regulated Financial Services firms.
(5) In December 1999, the FSA Factsheet: ‘Is an Endowment Mortgage right for you?’ was issued.
(6) In January 2000, endowment mortgage providers were directed by the FSA to issue the FSA Factsheet: ‘Your endowment mortgage — what you need to know’ to all their customers.
(7) By October 2000, the FSA had prepared a further Factsheet: ‘Endowment Mortgage Complaints’; this was a further step towards informing consumers as to what might constitute a compensatable cause for complaint.
(8) On 1st December 2000, the provisions of the U.K. Financial Services and Markets Act came into effect. This replaced the U.K. Financial Services Act 1986, consolidated the powers of the FSA and set up the U.K. Financial Ombudsman Service.
(9) From 1st December 2000, the U.K. Financial Ombudsman Service dealt with consumers complaints against Financial Services Providers and took a proactive role in addressing the Endowment Mortgage Scandal.
On 16th April 2002, the Minister for Finance, Mr. Charlie McCreevy, announced the publication of the Central Bank and Financial Services Authority of Ireland Bill 2002.
This Bill was to establish a new entity ── the Irish Financial Services Regulatory Authority (IFSRA) ── to manage the supervision of financial institutions in Ireland. This entity would operate within the existing Central Bank of Ireland’s legal structure, but it would have its own Chief Executive, Chairperson and Board with independent functions.
The title of the Central Bank of Ireland would be changed to reflect the new structure – its name would now be called the Central Bank and Financial Services Authority of Ireland.
The Chief Executive, Chairperson and some board members of IFSRA would also be represented on the Board of the Central Bank and Financial Services Authority of Ireland (CBFSAI).
The Minister for Finance also announced the appointment of the Interim Board to manage the transition to the new regulatory arrangements.
This Interim Board comprised eight members, one of whom, a Mr. Alan Ashe, was the former Managing Director of Standard Life Assurance Co.
The Minister for Finance affirmed that it was intended that the Interim Board would become the Board of IFSRA on its establishment.
In June 2002, the Minister for Finance, Mr Charlie McCreevy, introduced in the Dáil (Lower House) the Central Bank and Financial Services Authority of Ireland Bill, 2002, establishing the Irish Financial Services Regulatory Authority (IFSRA).
Introducing the Bill, the Minister announced that further measures, complementary to the provisions of this Bill, would be contained in a Second Bill that he hoped to introduce later in the year. This Second FSA Bill was not in fact introduced until the end of the following year, on 5th December 2003, as the Central Bank and Financial Services Authority of Ireland Bill, 2003,.
On 29th July 2002, the Department of Finance issued a paper on the contents of the Second Bill, titled, ‘Financial Sector Regulation: New Proposals’. The stated purpose of this ‘New Proposals’ paper was to outline the main features of the Second Bill and to invite comments, both in general and on specific aspects of the proposals. (******not just limited to inviting comments on the Heads of Bill but contrived questions *****)
The Heads of this Second Bill were set down in the ‘New Proposals’ paper and, as had been envisaged in the McDowell Report, included provisions for the establishment of a Financial Services Ombudsman, and also for the establishment of Consumer and Industry Consultative Panels.
The Heads of this Second Bill also included provisions designed to ensure, in so far as possible, that IFSRA’s confidentiality obligations would not inhibit it from acting on evidence of wrongdoing and placed a general obligation on IFSRA to report to other law-enforcement and regulatory authorities matters which come to its attention which are likely to be material to the responsibilities of those authorities.
But the Department of Finance ‘Financial Sector Regulation: New Proposals’ document, in inviting submissions, also posed specific, and carefully contrived, questions.
On the matter of ‘How should Complaints be dealt with?’, the Department of Finance ‘New Proposals’ paper posed the following questions:
What (if any) formal recognition should be given to the industry Ombudsman Schemes? Alternatively, should they be absorbed into the statutory scheme?
On the matter of ‘What Complaints should be dealt with?’, the Department of Finance ‘New Proposals’ paper posed the following questions:
Should there be any restriction on the type of complaint against a financial institution that can be dealt with in terms of either (i) the nature of the complaint (ii) the person/corporate entity making the complaint (iii) when the event(s) giving rise to the complaint happened?
If there are to be no restrictions, is there a need for safeguards to prevent the system being overwhelmed or distracted by frivolous complaints or complaints from large institutions or other financially sophisticated users of financial services? If so, what kinds of safeguards?
If there are to be restrictions, should they be in relation to (i) the nature of the complaint (ii) the person making the complaint (iii) when the events giving rise to the complaint occurred?
Before or after next section
?? Sequence of presentation
contrive manner New York! New York!
Submissions Extracts in Appendix!!
With regard to same, note the following!!!
Comments!!! or at END of this Chapter.
Department of Finance IFSRA Legislation Unit ── Summary of Submissions (See Appendix)
On 19th December 2002, following from the various Submissions received on their ‘New Proposals’ on the provisions of the Central Bank and Financial Services Authority of Ireland Second Bill (see Appendix ***), the IFSRA Legislation Unit of the Department of Finance issued a paper, titled, ‘Central Bank and Financial Services Authority of Ireland (Second Bill) ── Summary of Submissions received to public consultation process’.
The foremost points presented in the Summary of Main Points Arising were with respect to the Financial Services Ombudsman, where the Department of Finance IFSRA Legislation Unit stated that there was ‘Significant agreement’ that:
“There should be clear timelines for the complaints process and no retrospection.”
The IFSRA Legislation Unit defined ‘Significant agreement’ as meaning “that a number of submissions addressed this point and a significant number of them were agreed on a particular point”.
UKUKUKUKUKUK
Remember this was May 1999!
BUT, — forces — self interest groups — practices could be exposed if within the time limit for action set by the Statute of Limitations — every effort made to frustrate harry and delay the enactment and coming into force of any such Statutory Regulation that could expose and provide retribution for the victims of those practices.
In terms of delay stall frustrate — in terms of the successful frustration of the coming into force of the Statutory Legislation must be seen as constituting a tripartite of symbiotic collusion — in effect a troika of symbiotic collusion that ensured that Statutory Legislation would not come into effect for another ********* Protect their personal interests — first priority — directly and indirectly the management personnel had made fortunes from the misrepresentation to customers/consumers of life assurance/ investment products —financial services products — needed to ensure that those fortunes were retained — that their interests were successfully represented at all junctures of the legislative decision making process — needed to ensure that the detail within any legislative enactments favoured them.
Some three years later, on until 16th April 2002, the Minister for Finance, Mr. Charlie McCreevy, T.D., announced the publication of the Central Bank and Financial Services Authority of Ireland Bill 2002 to establish the Irish Financial Services Regulatory Authority (IFSRA).
The Minister explained that the appointment of the Interim Board would allow important work towards ensuring a smooth transition to the new arrangements to take place as soon as possible, and that the role of the Interim Board would include the selection of a Chief Executive for IFSRA and assisting the Ministers concerned, the Central Bank and the Chief Executive- designate in preparing for the establishment of IFSRA.
In June 2002, that the Minister for Finance, Mr Charlie McCreevy, introduced the Central Bank and Financial Services Authority of Ireland Bill 2002 before the Irish Parliament and announced that complementary measures would be contained in a second Bill that he hoped to introduce later in the year.
Be mindful that this was just the introduction of the Bill stage of this first Bill part for the proposed legislation to establish a Single Regulatory Authority.
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NBB Stitch up in time wrt the Pensions Ombudsman
131.—(1) The Pensions Ombudsman shall be independent in the performance of his functions.
(2) The Pensions Ombudsman may investigate and determine the following complaints and disputes—
(a) a complaint made to him by or on behalf of an actual or potential beneficiary of an occupational pension scheme or PRSA, who alleges that he has sustained financial loss occasioned by an act of maladministration done by or on behalf of a person responsible for the management of that scheme or, as appropriate, PRSA;
(b) any dispute of fact or law that arises in relation to an act done by or on behalf of a person responsible for the management of the scheme or, as appropriate, PRSA, and that is referred to him by or on behalf of the actual or potential beneficiary; and
(c) any other complaint or dispute falling within a category of complaint or dispute prescribed by regulations made by the Minister, with the consent of the Minister for Finance, as a category of complaint or dispute to which this subsection shall apply.
(3) A complaint or reference under this section shall be made to the Pensions Ombudsman in writing in such form as may from time to time be prescribed by regulations made by the Minister, after consultation with the Minister for Finance.
(4) A complaint or reference under this section shall be made to the Pensions Ombudsman—
(a) within whichever of the following periods is the last to expire—
(i) 6 years from the date of the act giving rise to the complaint or reference, or
(ii) 3 years from the earlier of the following 2 dates, namely, the date on which the person making the complaint or reference first became aware of the said act and the date on which that person ought to have become aware of that act, or
(b) within such longer period as the Pensions Ombudsman may allow if it appears to him that there are reasonable grounds for requiring a longer period and that it would be just and reasonable so to extend the period.
(5) References in this section to a complaint or dispute shall be construed as including references to a complaint or dispute the act giving rise to which was done prior to the establishment day if, but only if, that act was done within the period of 6 years prior to the passing of the Pensions (Amendment) Act, 2002 or between that passing and the establishment day, as the case may be.
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We have also seen how, even when through enactment of the Insurance Act 2000 it was given regulatory control over the investment business activities of the Life Assurance Companies, the Central Bank maintained a wholly passive role. There was never any effort by the Central Bank’s new Regulatory Regime to engage in proactive interrogation of the pervasive questionable practices that had been the norm for years within the Irish Financial Services Industry.
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We have also seen how, under power of the Investment Intermediaries Act 1995, the Irish Central Bank gave effect to a means by which Criminal Fraud, when perpetrated by a Financial Services Institution or its Management Personnel, could be whitewashed as merely being a breach of one of the Central Bank’s Code of Conduct Requirements.
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(b) ── ensuring continuance of the provisions within the Central Bank’s Code of Conduct Requirements issued under power of the Investment Intermediaries Act 1995, whereby conduct that constitutes both Fraud at Common Law and Criminal Fraud would be merely classified as being breach of those Requirements (see Section 2.6.4),
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The Central Bank continued to adopt a wholly passive role in respect of its regulatory functions and, thereby, ensured that the Financial Services Institutions’ own Self Regulatory Systems would continue to prevail ──── until (as we shall see) such time that it could be contrived, by a deliberate contortion of Regulation and Legislation, that the systemic frauds and misrepresentations perpetrated by those within the Financial Services Institutions over the preceding years could be successfully obfuscated.