Central Bank (Individual Accountability Framework) Act 2023

Central Bank (Individual Accountability Framework) Act 2023 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2023 Central Bank (Individual Accountability Framework) Act 2023 Central Bank (Individual Accountability Framework) Act 2023 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 5 of 2023 CENTRAL BANK (INDIVIDUAL ACCOUNTABILITY FRAMEWORK) ACT 2023 CONTENTS

PART 1

Preliminary Section

Section 1

Section 2

PART 2

Individual accountability and standards

Chapter 1

Responsibility of persons performing pre-approval controlled functions

Section 3

Section 4

Chapter 2

Power of Bank to prescribe business standards

Section 5

Chapter 3

Duty of responsibility and standards for individuals

Section 6

PART 3

Amendment of Part 3 of Act of 2010

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Section 16

Section 17

Section 18

Section 19

Section 20

Section 21

Section 22

Section 23

Section 24

Section 25

Section 26

Section 27

Section 28

Section 29

Section 30

Section 31

Section 32

Section 33

Section 34

Section 35

Section 36

PART 4

Amendment of Act of 1942

Chapter 1

Amendment of Part IIIC of Act of 1942

Section 37

Section 38

Section 39

Section 40

Section 41

Section 42

Section 43

Section 44

Section 45

Section 46

Section 47

Section 48

Section 49

Section 50

Section 51

Section 52

Section 53

Section 54

Section 55

Section 56

Section 57

Section 58

Section 59

Section 60

Section 61

Section 62

Section 63

Section 64

Section 65

Section 66

Section 67

Section 68

Chapter 2

Insertion of Part IIID in Act of 1942

Section 69

Chapter 3

Amendment of Part VIIA of Act of 1942

Section 70

Section 71

Section 72

Section 73

Chapter 4

Miscellaneous amendments to Act of 1942

Section 74

Section 75

Section 76

Section 77

Section 78

Section 79

PART 5

Privileged legal material

Section 80

Section 81

Section 82

PART 6

Miscellaneous amendments

Section 83

Section 84

Section 85

Section 86

Section 87

PART 7

Savings and transitional provisions

Section 88

Section 89

Section 90

Section 91

Section 92

Section 93

Section 94

Section 95

Section 96

Section 97

Section 98

PART 1

Preliminary Short title and commencement 1. (1) This Act may be cited as the Central Bank (Individual Accountability Framework) Act 2023.

Definitions 2. In this Act— “Act of 1942” means the Central Bank Act 1942 ; “Act of 2010” means the Central Bank Reform Act 2010 ; “Act of 2013” means the Central Bank (Supervision and Enforcement) Act 2013 .

PART 2

Individual accountability and standards

Chapter 1

Responsibility of persons performing pre-approval controlled functions Amendment of section 48 of Act of 2013 3. Section 48 of the Act of 2013 is amended— (a) in subsection (2), by the insertion of the following paragraphs after paragraph (b): “(ba) provision specifying the aspects of a regulated financial service provider’s affairs for which a PCF holder has inherent responsibility for the purposes of section 53B of the Central Bank Reform Act 2010 ; (bb) provision specifying the aspects of a regulated financial service provider’s affairs for which responsibility is to be allocated by the regulated financial service provider to a PCF holder for the purposes of section 53B of the Central Bank Reform Act 2010 ; (bc) provision as to the arrangements described in subsection (2A) that a regulated financial service provider is to adopt;”, (b) by the insertion of the following subsection after subsection (2): “(2A) The arrangements referred to in subsection (2)(bc) are: (a) arrangements for the regulated financial service provider to allocate to PCF holders for the purposes of section 53B of the Central Bank Reform Act 2010 responsibility for aspects of its affairs specified in regulations under subsection (2)(bb); (b) arrangements for the regulated financial service provider, so as to ensure the proper conduct of its affairs, to allocate to a PCF holder for the purposes of section 53B of the Central Bank Reform Act 2010 responsibility for aspects of its affairs for which no PCF holder has inherent responsibility under regulations under subsection (2)(ba) or responsibility allocated under arrangements described in paragraph (a); (c) arrangements for the regulated financial service provider to monitor the performance of pre-approval controlled functions in relation to it; (d) arrangements to make clear the management structure that identifies the lines of authority and accountability, and specifies roles and responsibilities, in relation to the management of PCF holders and of other persons by PCF holders; (e) arrangements to make clear the governance structure determining how the regulated financial service provider and PCF holders relate to persons concerned in the ownership or control of the regulated financial service provider or representing its customers or other stakeholders; (f) arrangements for documenting arrangements referred to in paragraphs (a) to (e).”, and (c) by the insertion of the following subsection after subsection (3): “(4) In this section— ‘PCF holder’ means a person performing a pre-approval controlled function in relation to the regulated financial service provider concerned;

‘pre-approval controlled function’ has the meaning given by section 18 of the Central Bank Reform Act 2010 .”.

Amendment of section 51 of Act of 2013 4. Section 51 of the Act of 2013 is amended, in subsection (1), by the insertion of “pre‑approval controlled functions,” after “providers,” in each place where it occurs.

Chapter 2

Power of Bank to prescribe business standards Insertion of Part 2A in Act of 2010 5. The Act of 2010 is amended by the insertion of the following Part after Part 2: “PART 2A Powers of Bank in relation to financial service providers Business standards 17A. (1) A regulated financial service provider shall comply with any standards prescribed by the Bank under subsection (2) (in this section referred to as the ‘business standards’).

Chapter 3

Duty of responsibility and standards for individuals Insertion of Part 3A in Act of 2010 6. The Act of 2010 is amended by the insertion of the following Part after Part 3: “PART 3A Duty of responsibility and conduct standards Interpretation (Part 3A) 53A. For the purposes of this Part— ‘common conduct standards’ shall be construed in accordance with section 53C(1); ‘additional conduct standards’ shall be construed in accordance with section 53C(2).

Duty of responsibility 53B. (1) For the purposes of this section— (a) a person has inherent responsibility for an aspect of the affairs of a regulated financial service provider if— (i) the person performs a pre-approval controlled function in relation to the regulated financial service provider, and (ii) the aspect of its affairs is specified in relation to that function by regulations made under section 48

Duty to take steps to meet conduct standards 53C. (1) A person who performs a controlled function in relation to a regulated financial service provider shall take any steps that it is reasonable in the circumstances for the person to take to ensure that the standards set out in section 53E (referred to in this Part as the ‘common conduct standards’) are met.

Relevant circumstances for purposes of sections 53B and 53C 53D. In determining the circumstances that are relevant for the purposes of subsection (2) of section 53B and subsections (1) and (2) of section 53C, as they apply in the case of any person performing functions in relation to a regulated financial service provider, matters to be considered include— (a) the nature of the business of the regulated financial service provider, including its scale and complexity, (b) the functions of the person in relation to the regulated financial service provider, and the level of knowledge and experience that a person with such functions could reasonably be expected to have, (c) the level of knowledge and experience of the person, (d) the existence and application (or otherwise) of— (i) appropriate and effective systems (including risk management systems, internal control mechanisms and governance arrangements), (ii) effective oversight of any delegation of responsibilities and effective safeguards against any inappropriate delegation, and (iii) appropriate and effective procedures for identifying and remedying problems, (e) the extent to which any matter referred to in paragraph (d) was within the control or influence of the person, and (f) in the case of subsections (1) and (2) of section 53C, any guidelines published by the Bank under section 53G.

Common conduct standards 53E. (1) The standards referred to in section 53C(1), in the case of a person who performs a controlled function in relation to a regulated financial service provider, are— (a) that the person acts with honesty and integrity, including— (i) having regard to the legitimate interests of the regulated financial service provider, its staff, customers and other persons with whom it engages, (ii) operating without bias and preventing, or identifying and appropriately managing, conflicts of interest, (iii) not exerting pressure or influence on a customer so as to limit his or her ability to make an informed choice in relation to any financial service, (iv) not misusing or misappropriating any assets or information of the regulated financial service provider or its customers, and (v) reporting appropriately, and not impeding others from reporting, to the management of the regulated financial service provider— (I) information relevant to, or giving rise to a suspicion of, the commission of a prescribed contravention or contravention of any other legal obligation or standard imposed on the regulated financial service provider, and (II) any matter otherwise adversely affecting the activities or interests of customers, the regulated financial service provider, its related undertakings, or the financial system in the State, (b) that the person acts with due skill, care and diligence, including— (i) having appropriate knowledge of the business activities of the regulated financial service provider relevant to the controlled function, and the associated risks of those activities, (ii) having appropriate knowledge of the legal and regulatory framework, including any legal obligation or standard imposed on the regulated financial service provider, relevant to the controlled function, (iii) operating in compliance with the systems and controls, processes, policies and procedures of the regulated financial service provider and any legal obligation or standard imposed on the regulated financial service provider, (iv) acting without detriment to customers, the regulated financial service provider, its related undertakings, or the financial system in the State, (v) ensuring that any communication, including any record, provided to a customer or other person is clear, accurate, up to date and not misleading, (vi) acting appropriately in any decision-making, including collective decision-making, ensuring decisions are properly informed and exercising sound judgement, and (vii) monitoring the performance of any delegated tasks and ensuring that those tasks are appropriately performed,

(c) that the person cooperates in good faith and without delay with the Bank, and with authorities that perform functions in a jurisdiction other than the State that are comparable to one or more of the functions performed by the Bank under financial services legislation, including— (i) responding to requests and requirements under financial services legislation in an open and timely manner, (ii) disclosing information or records when required to do so under financial services legislation, (iii) attending meetings and interviews when required to do so under financial services legislation, (iv) not providing false, inaccurate or misleading information, records or explanations, (v) not destroying, hiding or putting beyond reach information or records that it is reasonable for the person to expect to be required to be disclosed under financial services legislation, and (vi) not engaging in evasive, misleading or obstructive conduct, (d) that the person acts in the best interests of customers and treats them fairly and professionally, including— (i) ensuring that customers are informed in a clear manner of relevant information relating to financial services of which they ought to be aware, and not impeding the provision of relevant information to customers, (ii) communicating with customers in a timely manner having regard to the urgency of any matter and the time required by the customer to consider the relevant information, (iii) assessing the needs and circumstances of customers, including their level of knowledge and experience of financial services, their financial circumstances and the range of options available to them, and ensuring that any advice or recommendation provided to customers is appropriate and tailored to their needs and circumstances, (iv) ensuring that customers are not misled as to the advantages of any financial service, (v) acknowledging and seeking to resolve any complaints received from customers, (vi) resolving errors or mistakes affecting customers, and disclosing errors or mistakes to the customers affected in a timely manner, and (vii) not acting in a manner that is unfair to customers, and (e) that the person operates in compliance with standards of market conduct and trading venue rules to which the regulated financial service provider is subject by law and any market codes that apply to the affairs of the regulated financial service provider.

Additional conduct standards 53F. The standards referred to in section 53C(2), in the case of a person who performs a pre-approval controlled function in relation to a regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of a regulated financial service provider’s affairs, are— (a) that the business of the regulated financial service provider is controlled effectively, (b) that the business of the regulated financial service provider is conducted in accordance with its obligations under financial services legislation, (c) that any delegated tasks are assigned to an appropriate person with effective oversight, and (d) that any information of which the Bank would reasonably expect notice in respect of the business of the regulated financial service provider is disclosed promptly and appropriately to the Bank, including information relevant to, or giving rise to a suspicion or expectation of, any of the following: (i) commission of an offence by the regulated financial service provider or a person performing a controlled function in relation to it; (ii) commission of a prescribed contravention or any other breach of obligations under financial services legislation by the regulated financial service provider or a person performing a controlled function in relation to it; (iii) concealment or deliberate destruction of evidence relating to a matter referred to in subparagraph (i) or (ii); (iv) provision of false or misleading information to the Bank relating to a matter referred to in subparagraph (i) or (ii); (v) obstruction or impeding of an investigation relating to a matter referred to in subparagraph (i) or (ii); (vi) commencement of legal proceedings by or against the regulated financial service provider arising from its obligations under financial services legislation; (vii) commencement of legal proceedings against the regulated financial service provider which may impact on its ability to continue to trade; (viii) anything that may otherwise interfere significantly with the operation of the regulated financial service provider or its compliance with its obligations under financial services legislation; (ix) a decision by the regulated financial service provider to cease to provide financial services of a particular description.

Guidelines on conduct standards 53G. (1) The Bank shall prepare, in such form and manner as it considers appropriate, guidelines for the purpose of providing practical guidance for persons to whom subsection (1) or (2) of section 53C applies relating to the application and operation of this Part.

Notification and training for persons subject to conduct standards 53H. (1) A regulated financial service provider shall for the purpose of ensuring compliance with the common conduct standards and additional conduct standards— (a) notify persons performing a controlled function in relation to the regulated financial service provider of the common conduct standards and how they apply to a person performing that function, (b) provide training to persons performing a controlled function in relation to the regulated financial service provider to ensure that such persons have appropriate knowledge of the common conduct standards and how they apply to a person performing that function, (c) notify persons performing a pre-approval controlled function in relation to the regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of the regulated financial service provider’s affairs of the additional conduct standards and how they apply to a person performing that function, (d) provide training to persons performing a pre-approval controlled function in relation to the regulated financial service provider or any other function by which the person may exercise a significant influence on the conduct of the regulated financial service provider’s affairs to ensure that such persons have appropriate knowledge of the additional conduct standards and how they apply to a person performing that function, and (e) establish, maintain and give effect to policies on how the common conduct standards are integrated into the conduct of the affairs of the regulated financial service provider.

Limitation of requirements to produce documents, give information or answer questions 53I. Nothing in this Part requires a person— (a) to produce a document that the person could not have been compelled to produce to a court, (b) to give information that the person could not have been compelled to give to a court, (c) to answer a question that the person could not have been compelled to answer in a court, or (d) to do anything that might tend to incriminate the person.”.

PART 3

Amendment of Part 3 of Act of 2010 Amendment of section 18 of Act of 2010 7. Section 18 of the Act of 2010 is amended— (a) in subsection (1)— (i) by the substitution of the following definition for the definition of “controlled function”: “‘controlled function’— (a) in relation to a regulated financial service provider, means a function prescribed in regulations made under section 20 as a controlled function in relation to a regulated financial service provider, and (b) in relation to a holding company, means a function prescribed in regulations made under section 20 as a controlled function in relation to a holding company;”, (ii) by the substitution of the following definition for the definition of “pre‑approval controlled function”: “‘pre-approval controlled function’— (a) in relation to a regulated financial service provider, shall be construed in accordance with section 22(1), and (b) in relation to a holding company, shall be construed in accordance with section 22(1A);”, and (iii) by the insertion of the following definitions: “‘holding company’ means any of the following established in the State: (a) a financial holding company, within the meaning given by point (20) of Article 4(1) of the Capital Requirements Regulation; (b) a mixed financial holding company, within the meaning given by point (21) of Article 4(1) of the Capital Requirements Regulation; (c) an insurance holding company, within the meaning given by Regulation 215(1) of the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ); (d) an investment holding company, within the meaning of the European Union (Investment Firms) Regulations 2021 (S.I. No. 355 of 2021); ‘prohibition notice’ means a notice under section 43;”, and (b) by the deletion of subsections (2) and (3).

Definition (Chapter 2) 8. The Act of 2010 is amended by the substitution of the following section for section 19: “19. In this Chapter, ‘relevant obligations’, in relation to a regulated financial service provider or holding company, means the obligations of the regulated financial service provider or holding company under— (a) all designated enactments and all designated statutory instruments that apply to it, (b) all codes, guidelines and notices issued by the Bank that apply to it, and (c) all other enactments and statutory instruments with which it must comply.”.

Amendment of section 20 of Act of 2010 9. Section 20 of the Act of 2010 is amended— (a) in subsection (1), by the insertion of “in relation to regulated financial service providers or in relation to holding companies” after “controlled functions”, (b) in subsection (2), by the insertion of “to be a controlled function in relation to a regulated financial service provider” after “subsection (1)”, (c) by the insertion of the following subsection after subsection (2): “(2A) The Bank may prescribe a function under subsection (1) to be a controlled function in relation to a holding company if and only if the function— (a) is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the affairs of the holding company, or (b) is related to ensuring, controlling or monitoring compliance by the holding company with its relevant obligations.”, (d) in subsection (3), by the substitution of “A function that is prescribed under subsection (1) as a controlled function in relation to a regulated financial service provider and” for “A controlled function that”, (e) in subsection (4)— (i) by the substitution of “A function that is prescribed under subsection (1) as a controlled function in relation to a regulated financial service provider or in relation to a holding company” for “A controlled function”, (ii) in paragraph (b), by the insertion of “or holding company” after “provider”, and (iii) by the substitution of the following paragraph for paragraph (c): “(c) it relates to affairs of a regulated financial service provider or holding company established in the State conducted by the regulated financial service provider or holding company outside the State.”, and (f) in subsection (5), by the insertion of “or holding companies” after “providers” in both places where it occurs.

Application of standards of fitness and probity 10. The Act of 2010 is amended by the substitution of the following section for section 21: “21. (1) A regulated financial service provider shall not permit a person to perform a controlled function in relation to it unless a certificate of compliance with standards of fitness and probity, given by the regulated financial service provider in accordance with this section, is in force in relation to the person.

Amendment of section 22 of Act of 2010 11. Section 22 of the Act of 2010 is amended— (a) in subsection (1), by the insertion of “in relation to a regulated financial service provider” after “is a pre-approval controlled function”, (b) by the insertion of the following subsection after subsection (1): “(1A) A function is a pre-approval controlled function in relation to a holding company if it is prescribed as such in regulations made pursuant to subsection (2A).”, (c) by the substitution of the following subsections for subsection (2): “(2) The Bank may by regulations prescribe a function that is a controlled function in relation to a regulated financial service provider as a pre‑approval controlled function in relation to a regulated financial service provider, if the function is one by which a person may exercise a significant influence on the conduct of a regulated financial service provider’s affairs. (2A) The Bank may by regulations prescribe a function that is a controlled function in relation to a holding company as a pre-approval controlled function in relation to a holding company, if the function is one by which a person may exercise a significant influence on the conduct of a holding company’s affairs. (2B) In prescribing a function as a pre-approval controlled function pursuant to subsection (2) or (2A), the Bank may describe or identify the function by reference to a title commonly used for a person who performs the function.”, and (d) by the substitution of the following subsections for subsections (3) and (4): “(3) Without prejudice to the generality of subsections (2) and (2A), the Bank may prescribe a controlled function as a pre-approval controlled function in relation to a regulated financial service provider, pursuant to subsection (2), or in relation to a holding company, pursuant to subsection (2A), if— (a) the person who performs the function reports directly to— (i) a person who holds an office or position mentioned in a subparagraph of subsection (4)(a) in the regulated financial service provider or holding company, or (ii) in the case of a regulated financial service provider, a person referred to in paragraph (b) or (c) of subsection (4), and (b) the Bank is satisfied that the prescription of the function as a pre‑approval controlled function— (i) is warranted on the grounds of the size or complexity of the regulated financial service provider or holding company or its business, and (ii) is necessary or prudent in order to verify the compliance by the regulated financial service provider or holding company with its relevant obligations.

Amendment of section 23 of Act of 2010 12. Section 23 of the Act of 2010 is amended— (a) in subsection (1)— (i) by the insertion of “or holding company” after “provider”, and (ii) by the insertion of “in relation to it” after “controlled function”, (b) in subsection (2)— (i) by the insertion of “the appointment of” after “approve”, (ii) by the insertion of “or holding company” after “provider”, and (iii) by the insertion of “pre-approval” before “controlled”, (c) in subsection (6)(a), by the insertion of “or holding company” after “provider”, and (d) by the insertion of the following subsection after subsection (7): “(8) Where— (a) the Bank is considering under subsection (1) whether to approve an appointment, (b) the appointment will be to perform a pre-approval controlled function in relation to a regulated financial service provider, and (c) the person proposing to make the appointment is not yet a regulated financial service provider, subsection (2) applies as if references in that subsection to a regulated financial service provider were references to that person.”.

Amendment of section 23A of Act of 2010 13. Section 23A of the Act of 2010 is amended— (a) by the substitution of the following subsection for subsection (1): “(1) A significant supervised entity (within the meaning of the SSM Framework Regulation) which is a regulated financial service provider or holding company shall not— (a) appoint a person to its management body (within the meaning of the European Union (Capital Requirements) Regulations 2014 ( S.I. No. 158 of 2014 )), or (b) make any other appointment the approval of which is subject to the exclusive competence of the ECB under Article 4(1)(e) of the SSM Regulation, unless the entity has been notified in writing by the ECB that it has approved the appointment.”, (b) in subsection (3)— (i) by the insertion of “the appointment of” after “approve”, and (ii) by the deletion of “to the management body”, and (c) by the deletion of subsection (7).

Amendment of section 25 of Act of 2010 14. Section 25 of the Act of 2010 is amended— (a) in subsection (2)— (i) in paragraph (a), by the insertion of “or holding company” after “provider”, (ii) by the insertion of the following paragraph after paragraph (a): “(aa) subject to subsection (2A), if the person has performed a controlled function in relation to a regulated financial service provider or holding company within the period of 6 years immediately preceding the commencement of the investigation referred to in subsection (1),”, (iii) in paragraph (b)— (I) by the insertion of “or holding company” after “provider”, and (II) by the insertion of “in relation to it” after “function)”, and (iv) in paragraph (c)— (I) by the insertion of “or holding company” after “provider”, and (II) by the insertion of “in relation to it” after “function)”, (b) by the insertion of the following subsection after subsection (2): “(2A) Where the period from the date of commencement of paragraph (aa) of subsection (2) to the beginning of an investigation under subsection (1) is less than 6 years, that paragraph applies as if the reference to the period of 6 years were a reference to that shorter period.”, and (c) in subsection (3)— (i) in paragraph (a), by the deletion of “the part of a controlled function or any controlled function, as the case may be,”, (ii) by the substitution of the following paragraph for paragraph (c): “(c) the person has committed or participated in serious misconduct in relation to the affairs of a regulated financial service provider or holding company,”, and (iii) in paragraph (f), by the insertion of “or holding company” after “provider”.

Notice of investigation 15. The Act of 2010 is amended by the insertion of the following section after section 25: “25A. (1) As soon as practicable after a decision is made by the Head of Financial Regulation to conduct an investigation in accordance with this Chapter, the Head of Financial Regulation shall serve on the person to whom the investigation relates notice in writing of the investigation.

Amendment of section 26 of Act of 2010 16. Section 26 of the Act of 2010 is amended— (a) by the substitution of the following subsections for subsection (1): “(1) The Head of Financial Regulation may issue a notice (in this Part called a ‘suspension notice’) in relation to a person if— (a) subject to subsection (1A), the person’s fitness and probity is or has been the subject of an investigation under section 25, or (b) the Bank or the Governor has imposed a prohibition on the person under section 43 (whether or not there has been any investigation under section 25), and the Head of Financial Regulation is satisfied that it is necessary in the interests of the proper regulation of a regulated financial service provider or holding company that the person not perform the relevant controlled function, a part of the relevant controlled function, or any controlled function, while the Head of Financial Regulation, the Bank or the Governor, as the case may be, is carrying out any function in relation to the person under this Chapter or Chapter 4. (1A) In paragraph (a) of subsection (1), the reference to an investigation under section 25 does not include an investigation in the circumstances referred to in paragraph (aa) of section 25(2), unless any other paragraph of section 25(2) also applies. (1B) Where paragraph (b) of subsection (1) applies, the reference in that subsection to the relevant controlled function, or a part of the relevant controlled function, is a reference to a controlled function, or a part of a controlled function, to which the prohibition applies.”, (b) in subsection (3)— (i) by the substitution of “provider or holding company concerned” for “provider concerned”, and (ii) by the insertion of “or holding company” before “confirms”, (c) in subsection (4)— (i) in paragraph (b), by the substitution of “section 25(1)(a) or, where subsection (1)(b) of this section applies, details of the prohibition” for “section 25(1)”, (ii) by the substitution of the following paragraph for paragraph (d): “(d) shall require the suspended person and any regulated financial service provider or holding company on which a copy of the notice is served to show cause, in writing, within 5 days after service of the notice, why the suspension notice should not be confirmed, and”, and (iii) by the substitution of the following paragraph for paragraph (e): “(e) shall set out, for any regulated financial service provider or holding company on which any terms and conditions are imposed under subsection (8), the terms and conditions imposed.”,

(d) in subsection (5)— (i) in paragraph (b), by the insertion of “or holding company” after “provider”, and (ii) in paragraph (c), by the insertion of “or holding company” after “provider”, (e) by the deletion of subsection (6), (f) in subsection (7), by the insertion of “or holding company” after “provider”, (g) in subsection (8)— (i) by the substitution of “any regulated financial service provider or holding company on which a copy of the notice is served” for “any regulated financial service provider concerned”, (ii) by the substitution of “including any terms and conditions” for “including any condition”, and (iii) by the substitution of “its business until it complies with the notice” for “the business of the regulated financial service provider concerned until the regulated financial service provider complies with the notice”, and (h) in subsection (9)— (i) by the insertion of “or holding company” after “provider”, and (ii) by the substitution of “as to why the suspension notice should not be confirmed” for “in relation to the fitness and probity of the suspended person concerned”.

Amendment of section 27 of Act of 2010 17. Section 27 of the Act of 2010 is amended— (a) by the insertion of “or holding company” after “provider” in each place where it occurs, and (b) in subsection (2), by the substitution of “terms and conditions” for “condition”.

Amendment of section 28 of Act of 2010 18. Section 28 of the Act of 2010 is amended, in paragraph (a), by the insertion of “or holding company” after “provider”.

Amendment of section 29 of Act of 2010 19. Section 29 of the Act of 2010 is amended— (a) in subsection (1)— (i) by the insertion of “or holding company” after “regulated financial service provider”, (ii) by the substitution of “satisfied” for “satisfied that”, and (iii) by the substitution of the following paragraphs for paragraphs (a) to (c): “(a) (except where the suspension notice was issued in the circumstances mentioned in section 26(1)(b)) that there is still reason to suspect the person’s fitness and probity to perform the relevant controlled function, and (b) that it is necessary in the interests of the proper regulation of the regulated financial service provider or holding company that the person not perform the controlled function, the part of the controlled function, or any controlled function, while the Head of Financial Regulation, the Bank or the Governor is carrying out a function in relation to the person under this Chapter or Chapter 4,”, (b) in subsection (2), by the insertion of “or holding company” after “provider”, (c) in subsection (3)(b), by the substitution of “the condition in paragraph (a) of subsection (1), where it applies, or paragraph (b) of that subsection” for “any condition in paragraph (a), (b) or (c) of subsection (1)”, (d) by the substitution of the following subsection for subsection (4): “(4) A suspension notice that has been confirmed in accordance with subsection (1) has effect until— (a) the end of the period of 6 months from the date on which the suspension notice would otherwise have ceased to have effect under section 28(b), or (b) if sooner, the revocation of the notice or, where the suspension notice was issued in the circumstances mentioned in section 26(1)(b), the time when an application under section 45 for confirmation of the prohibition notice has been disposed of.”, (e) by the insertion of the following subsection after subsection (5): “(5A) A notice served under subsection (5) shall state that the decision to confirm the suspension notice is an appealable decision for the purposes of Part VIIA of the Act of 1942.”, (f) by the substitution of the following subsection for subsection (6): “(6) The Head of Financial Regulation may revoke a suspension notice at any time if he or she considers that it is no longer necessary in the interests of the proper regulation of the regulated financial service provider or holding company concerned that the person not perform the relevant controlled function, the relevant part of a controlled function, or any controlled function, while the Head of Financial Regulation, the Bank or the Governor is carrying out a function in relation to the person under this Chapter or Chapter 4.”,

and (g) by the insertion of the following subsection after subsection (6): “(7) A decision by the Head of Financial Regulation to confirm a suspension notice is an appealable decision for the purposes of Part VIIA of the Act of 1942, and the Appeals Tribunal shall have particular regard to the need for expedition in hearing an appeal against such a decision.”.

Amendment of section 30 of Act of 2010 20. Section 30 of the Act of 2010 is amended— (a) in paragraph (b)— (i) by the insertion of “or holding company” after “provider”, and (ii) by the insertion of “in relation to it” after “function” in the second place where it occurs, and (b) by the substitution of “or the regulated financial service provider or holding company” for “or regulated financial service provider”.

Amendment of section 31 of Act of 2010 21. Section 31 of the Act of 2010 is amended— (a) in subsection (1), by the insertion of “or holding company” after “provider”, (b) in subsection (2), by the substitution of “6 months” for “3 months”, and (c) by the insertion of the following subsections after subsection (2): “(2A) The making of an order under subsection (2) does not prevent the making of a further order. (2B) Subject to subsection (2C), orders under subsection (2) shall not in total extend a suspension notice for more than 24 months from the end of the period of 6 months referred to in section 29(4). (2C) Where a prohibition is imposed on the suspended person under section 43, or where the suspension notice was issued following the imposition of a prohibition under section 43, subsection (2B) does not apply, but orders under subsection (2) shall not extend the suspension notice beyond the time when an application under section 45 for confirmation of the prohibition notice has been disposed of.”.

Amendment of section 32 of Act of 2010 22. Section 32 of the Act of 2010 is amended in subsection (2)— (a) in paragraph (a), by the insertion of “or holding company” after “provider”, (b) in paragraph (b), by the insertion of “or former holding company” after “provider”, and (c) in paragraph (c)— (i) by the insertion of “or holding company” after “provider” in the first place where it occurs, and (ii) by the insertion of “or former holding company” after “provider” in the second place where it occurs.

Amendment of section 39 of Act of 2010 23. Section 39 of the Act of 2010 is amended in subsection (2)(b)— (a) by the insertion of “or holding company” after “provider” in the first place where it occurs, and (b) by the insertion of “or former holding company” after “provider” in the second place where it occurs.

Amendment of section 40 of Act of 2010 24. Section 40 of the Act of 2010 is amended by the insertion of the following subsection after subsection (3): “(4) Where the person concerned claims to be entitled to refuse to produce a document, to provide information, or to answer a question, on the grounds of legal professional privilege, the Court may, without prejudice to the generality of subsection (2), give directions as to the appointment of a person with suitable legal qualifications, possessing the level of experience, and the independence from any interest falling to be determined between the parties concerned, that the Court considers to be appropriate for the purpose of— (a) examining the material for which the person claims legal professional privilege, and (b) preparing a report for the Court with a view to assisting or facilitating the Court in deciding what action to take under this section.”.

Head of Financial Regulation to prepare report 25. The Act of 2010 is amended by the substitution of the following section for section 41: “41. (1) Where the Head of Financial Regulation has completed an investigation under this Chapter, he or she shall, after considering— (a) the notice under section 25A(1), (b) any relevant information or evidence gathered or received by the Head of Financial Regulation in the course of the investigation, and (c) any response made by the person to whom the investigation relates in accordance with a statement referred to in section 25A(2)(c), and any other relevant submission or statement made by the person in the course of the investigation, as soon as practicable prepare a draft report of the investigation.

Amendment of section 42 of Act of 2010 26. Section 42 of the Act of 2010 is amended— (a) by the substitution of the following definition for the definition of “prohibited person”: “‘prohibited person’ means a person who is the subject of a prohibition imposed under section 43(1).”, and (b) by the deletion of the definition of “prohibition notice”.

Amendment of section 43 of Act of 2010 27. Section 43 of the Act of 2010 is amended— (a) by the substitution of the following subsection for subsection (1): “(1) If the Bank or the Governor has reasonably formed the opinion that a person is not of such fitness and probity as is appropriate to perform a particular controlled function, a specified part of a controlled function, or any controlled function, the Bank or the Governor, as the case may be, may, subject to subsections (3) and (4), impose on the person a prohibition that, as respects the controlled function, the specified part of a controlled function, or any controlled function— (a) forbids the person— (i) to carry out the function or part at all, or (ii) to carry it out otherwise than in accordance with a specified condition or conditions, (b) forbids the person— (i) to carry out the function or part in relation to a specified regulated financial service provider or holding company or specified regulated financial service providers or holding companies, (ii) to carry it out in relation to a specified class or specified classes of regulated financial service providers or holding companies, or (iii) to carry it out in relation to any regulated financial service provider or holding company, and (c) is imposed indefinitely or for a specified period.”, (b) in subsection (2)— (i) by the substitution of the following paragraph for paragraph (c): “(c) the person has committed or participated in serious misconduct in relation to the affairs of a regulated financial service provider or holding company,”, and (ii) in paragraph (f), by the insertion of “or holding company” after “provider”, (c) by the insertion of the following subsection after subsection (2): “(2A) Any finding of fact made by the Bank or the Governor for the purpose of forming the opinion referred to in subsection (1) shall be made on the balance of probabilities.”, (d) in subsection (3)— (i) by the substitution of “impose a prohibition on a person under subsection (1)” for “issue a prohibition notice in relation to a person”, (ii) in paragraph (a)(i)(I), by the substitution of “Chapter 3” for “this Chapter”, (iii) in paragraph (a)(i)(III), by the substitution of “in accordance with paragraph (c) of section 41(2)” for “(within the period specified pursuant to section 41(4)) to the Head of Financial Regulation in relation to any matter in the report”, (iv) in paragraph (a)(ii), by the substitution of “, and any person to whom subsection (3A) applies,” for “and any regulated financial service provider concerned”, and

(v) by the substitution of the following paragraphs for paragraphs (b) and (c): “(b) the person and any person to whom subsection (3A) applies— (i) have access to any material taken into account by the Bank or the Governor for the purpose of ensuring that the proposed decision is consistent and proportionate, having regard to other decisions under subsection (1), and (ii) have been afforded such a hearing in relation to the proposed decision as is necessary to do justice in the circumstances, and (c) the Bank or the Governor, as the case may be, is satisfied that the imposition of the prohibition is necessary in the circumstances.”, (e) by the insertion of the following subsection after subsection (3): “(3A) In relation to the imposition of a prohibition on any person, this subsection applies— (a) where the person is subject to a suspension notice, to any regulated financial service provider or holding company on which the Head of Financial Regulation is required by section 26(5) to serve a copy of the notice, (b) to any regulated financial service provider or holding company in relation to which, to the knowledge of the Bank or the Governor, as the case may be, the person performs a controlled function to which the prohibition would apply, (c) to any regulated financial service provider or holding company which, to the knowledge of the Bank or the Governor, as the case may be, proposes to appoint the person to perform in relation to it a controlled function to which the prohibition would apply, and (d) to any regulated financial service provider or holding company which the Bank or the Governor, as the case may be, has reason to believe is considering the appointment of the person to perform in relation to it a controlled function to which the prohibition would apply.”, (f) in subsection (4), by the substitution of “impose a prohibition under subsection (1)” for “issue a prohibition notice”, (g) by the insertion of the following subsections after subsection (4): “(4A) A prohibition under subsection (1) shall be imposed by a notice in writing (in this Part referred to as a ‘prohibition notice’). (4B) Where more than one prohibition is imposed under subsection (1) on the same person, they may be imposed by the same prohibition notice. (4C) A prohibition notice— (a) shall be served on the prohibited person, and (b) may be served on a regulated financial service provider or holding company. (4D) Subject to section 46, a prohibition notice does not take effect unless confirmed on an application under section 45.”,

(h) by the deletion of subsections (5) to (7), (i) by the substitution of the following subsection for subsection (9): “(9) A regulated financial service provider or holding company shall not permit a prohibited person to perform a controlled function in relation to it if doing so would require the person to contravene a prohibition notice served on it.”, and (j) by the deletion of subsection (12).

Repeal of section 44 of Act of 2010 28. Section 44 of the Act of 2010 is repealed.

Amendment of section 45 of Act of 2010 29. Section 45 of the Act of 2010 is amended— (a) by the substitution of the following subsections for subsection (1): “(1) As soon as practicable after the service of a prohibition notice on the prohibited person, the Bank or the Governor, as the case may be, shall, subject to section 46, make an application to the Court for confirmation of the notice. (1A) An application under subsection (1) may be made on an ex parte basis provided that the prohibited person informs the Bank or the Governor, as the case may be, in writing that he or she agrees to the application being made ex parte.”, (b) in subsection (3), by the substitution of “this section” for “subsection (1)”, (c) in subsection (4), by the substitution of “this section” for “subsection (1)”, (d) in subparagraph (ii) of subsection (5)(a), by the substitution of “regulated financial service provider or holding company” for “regulated financial institution”, (e) in subsection (6)— (i) by the substitution of the following paragraph for paragraph (a): “(a) a serious and significant error, or a series of errors which, taken together, are serious and significant,”, and (ii) in paragraph (c), by the substitution of “opinion” for “finding”, and (f) in subsection (10), by the insertion of “or the Governor” after “the Bank”.

Application to vary or revoke prohibition notice 30. The Act of 2010 is amended by the insertion of the following section after section 45: “45A. (1) An application for an order varying or setting aside a prohibition notice confirmed under section 45 may be made to the Court— (a) by the Bank or the Governor, as the case may be, or (b) by the prohibited person.

Agreement for prohibition notice to have effect without confirmation 31. The Act of 2010 is amended by the substitution of the following section for section 46: “46. (1) Where the Bank or the Governor has issued a prohibition notice, the prohibited person and any person to whom subsection (2) applies may agree in writing with the Bank or the Governor, as the case may be, to comply with the prohibition notice for such period as is agreed.

Amendment of section 48 of Act of 2010 32. Section 48 of the Act of 2010 is amended, in subsection (2), by the insertion of “or a holding company” after “provider”.

Service of notices and other documents 33. The Act of 2010 is amended by the insertion of the following section after section 49: “49A. For the purposes of the giving or service of notices or other documents under this Part, section 61G of the Act of 1942 applies as if references in that section to the Bank included references to the Governor and the Head of Financial Regulation.”.

Amendment of section 51 of Act of 2010 34. Section 51 of the Act of 2010 is amended, in subsection (1), by the insertion of “or holding companies” after “providers”.

Amendment of section 52 of Act of 2010 35. Section 52 of the Act of 2010 is amended— (a) in subsection (1), by the insertion of “, subject to subsection (4),” after “discretion”, (b) in subsection (2), by the insertion of “, subject to subsection (4),” after “discretion”, (c) in subsection (2A), by the insertion of “, subject to subsection (4),” after “discretion”, and (d) by the insertion of the following subsections after subsection (3): “(4) The powers conferred by subsections (1), (2) and (2A) shall be exercised so as to secure the following: (a) that the function of conducting an investigation in accordance with Chapter 3 where a person has formed the opinion referred to in section 25(1), and any function exercisable under that Chapter for or in connection with the conducting of such an investigation, is not performed by the person who forms that opinion; (b) that any function under section 29(1) to (3) in relation to a suspension notice is not performed by a person who performed a function under section 26 in relation to the notice; (c) that any function under section 43 in connection with the imposition of a prohibition in circumstances to which subparagraph (i) of subsection (3)(a) of that section applies is not performed by a person involved in the investigation referred to in that subparagraph.

Independence of decision-makers 36. The Act of 2010 is amended by the insertion of the following section after section 52: “52A.(1) This section applies to the following functions: (a) deciding whether to issue a suspension notice; (b) deciding whether to confirm a suspension notice; (c) deciding whether to impose a prohibition under section 43.

PART 4

Amendment of Act of 1942

Chapter 1

Amendment of Part IIIC of Act of 1942 Amendment of section 33AN of Act of 1942 37. Section 33AN of the Act of 1942 is amended— (a) in subsection (1)— (i) by the insertion of the following definitions: “‘authorised officer’ means, subject to subsection (1A), a person appointed under section 24 of the Central Bank (Supervision and Enforcement) Act 2013 ; ‘controlled function’ has the meaning given by section 18

Amendment of section 33ANC of Act of 1942 38. Section 33ANC of the Act of 1942 is amended— (a) in subsection (1)(b), by the substitution of “participation by a person, while concerned” for “participation, by a person concerned”, (b) in subsection (2), by the substitution of the following paragraph for paragraph (c): “(c) a reference in this Part to performing a controlled function in relation to a regulated financial service provider includes a reference to being concerned in the management of a financial holding company, mixed-financial holding company or mixed‑activity holding company.”, (c) by the insertion of the following subsection after subsection (2): “(2A) References in subsections (1) and (2) to a financial holding company, mixed financial holding company or mixed-activity holding company do not include references to a regulated financial service provider which is such a company.”, (d) by the deletion of subsection (3), and (e) in subsection (4), by the deletion of paragraph (b).

Amendment of section 33ANE of Act of 1942 39. Section 33ANE of the Act of 1942 is amended— (a) in subsection (1), by the insertion of “shall not include any regulated financial service provider but, subject to that,” after “ ‘designated entity’ ”, (b) in subsection (2), by the substitution of the following paragraph for paragraph (b): “(b) participation by a person, while concerned in the management of a designated entity, in the commission by the designated entity of such a contravention.”, (c) in subsection (3), by the substitution of the following paragraph for paragraph (c): “(c) a reference in this Part to performing a controlled function in relation to a regulated financial service provider includes a reference to being concerned in the management of a designated entity.”, and (d) by the deletion of subsection (4).

Amendment of section 33ANF of Act of 1942 40. Section 33ANF of the Act of 1942 is amended— (a) in subsection (1)(b), by the substitution of “participation by a person, while concerned” for “participation, by a person concerned”, (b) in subsection (2), by the substitution of the following paragraph for paragraph (c): “(c) a reference in this Part to performing a controlled function in relation to a regulated financial service provider includes a reference to being concerned in the management of an insurance holding company or mixed financial holding company.”, (c) by the insertion of the following subsection after subsection (2): “(2A) References in subsections (1) and (2) to an insurance holding company or mixed financial holding company do not include references to a regulated financial service provider which is such a company.”, and (d) by the deletion of subsection (3).

Amendment of section 33ANG of Act of 1942 41. Section 33ANG of the Act of 1942 is amended— (a) in subsection (1)(b), by the substitution of “participation by a person, while concerned” for “participation, by a person concerned”, (b) in subsection (2), by the substitution of the following paragraph for paragraph (c): “(c) a reference in this Part to performing a controlled function in relation to a regulated financial service provider includes a reference to being concerned in the management of an investment holding company, a mixed-financial holding company or a mixed‑activity holding company.”, (c) by the insertion of the following subsection after subsection (2): “(2A) References in subsections (1) and (2) to an investment holding company, a mixed financial holding company or a mixed activity holding company do not include references to a regulated financial service provider which is such a company.”, and (d) by the deletion of subsection (3).

Application of Part to holding companies under Part 3 of Central Bank Reform Act 2010 42. Chapter 1 of Part IIIC of the Act of 1942 is amended by the insertion of the following section after section 33ANG: “33ANH. (1) This Part applies in relation to— (a) the commission or suspected commission by a financial holding company, mixed financial holding company, insurance holding company or investment holding company of a contravention of— (i) a provision of Part 3 of the Central Bank Reform Act 2010 , (ii) a direction given to the company concerned under Part 3 of the Central Bank Reform Act 2010 , (iii) any requirement imposed on the company concerned under a provision of Part 3 of the Central Bank Reform Act 2010 , or (iv) any obligation imposed on the company concerned by this Part or imposed by the Bank pursuant to a power exercised under this Part, and (b) participation by a person, while concerned in the management of a financial holding company, mixed financial holding company, insurance holding company or investment holding company, in the commission by the company concerned of such a contravention.

Amendment of Chapter 2 of Part IIIC of Act of 1942 43. Chapter 2 of Part IIIC of the Act of 1942 is amended by the insertion of the following sections before section 33AO: “Interpretation (Chapter 2) 33ANI. In this Chapter— ‘investigation’ means an investigation referred to in section 33ANJ(1); ‘responsible authorised officer’ means the authorised officer responsible for an investigation.

Investigation of suspected prescribed contravention 33ANJ. (1) As soon as practicable after a decision is made by the Bank to investigate— (a) whether a person is committing or has committed one or more prescribed contraventions, or (b) whether a person is participating or has participated, while performing a relevant controlled function, in the commission by a regulated financial service provider of one or more prescribed contraventions, the responsible authorised officer shall give the person notice in writing of the investigation.

Investigation report 33ANK. (1) When an investigation is completed, the responsible authorised officer shall, after considering— (a) the notice given under section 33ANJ(1) and any notice given under section 33ANJ(2), (b) any relevant information or evidence gathered or received in the course of the investigation, and (c) any response made by the person to whom the investigation relates in accordance with a statement referred to in paragraph (c) of section 33ANJ(3), and any other relevant submission or statement made by the person in the course of the investigation, as soon as practicable prepare a draft report of the investigation.

Confidential information provided for purposes of investigation etc. not to be disclosed 33ANL. (1) Where confidential information is provided to a person for the purposes of an investigation, or under or for the purposes of subsections (1) to (3) of section 33ANK, that person shall not, subject to section 33AK, disclose that information unless authorised to do so by the Bank in writing or required to do so by law.

Bank may hold inquiry into suspected commission of or participation in prescribed contravention 44. The Act of 1942 is amended by the substitution of the following section for section 33AO: “33AO. (1) Whenever the Bank, after considering the final report of an investigation, and any submissions, provided to it under section 33ANK(5), suspects on reasonable grounds that the person to whom the investigation related is committing or has committed a prescribed contravention, it may hold an inquiry to determine whether or not the person is committing or has committed the contravention.

Notice of inquiry, submissions, attendance and adjournment 45. The Act of 1942 is amended by the substitution of the following section for section 33AP: “33AP. (1) Before holding an inquiry under section 33AO, the Bank shall give notice in writing of the proposed inquiry to the person concerned.

Amendment of section 33AQ of Act of 1942 46. Section 33AQ of the Act of 1942 is amended— (a) by the substitution of the following subsections for subsections (1) and (2): “(1) At the conclusion of an inquiry held under section 33AO to determine whether or not a person is committing or has committed a prescribed contravention, the Bank shall make a finding as to whether, on the balance of probabilities, the person is committing or has committed the contravention.

(d) in subsection (5)— (i) in the words before paragraph (a)— (I) by the deletion of “concerned in the management of a regulated financial service provider”, and (II) by the substitution of “by a regulated financial service provider” for “by the financial service provider”, and (ii) by the substitution of the following paragraphs for paragraph (c): “(c) a direction disqualifying the person, for such period as the Bank considers appropriate, from performing, in relation to all regulated financial service providers or in relation to such regulated financial service provider or providers as may be specified in the direction— (i) any controlled function, (ii) such controlled function or functions as may be specified in the direction, or (iii) such part or parts of a controlled function or functions as may be specified in the direction; (ca) a direction imposing such conditions as the Bank considers appropriate on the performance by the person, in relation to all regulated financial service providers or in relation to such regulated financial service provider or providers as may be specified in the direction, of— (i) any controlled function, (ii) such controlled function or functions as may be specified in the direction, or (iii) such part or parts of a controlled function or functions as may be specified in the direction;”, (e) in subsection (7)— (i) by the substitution of “held under section 33AO to determine whether or not a person is committing or has committed a prescribed contravention,” for “relating to the conduct of a regulated financial service provider,”, and (ii) by the substitution of “the person” for “the financial service provider” in each place where it occurs, (f) in subsection (8)— (i) in the words before paragraph (a), by the substitution of “held under section 33AO to determine whether or not a person is participating or has participated, while performing a relevant controlled function, in the commission by a regulated financial service provider of a prescribed contravention,” for “relating to the conduct of a person concerned in the management of a regulated financial service provider,”, (ii) in paragraph (a), by the insertion of “, while performing a relevant controlled function,” after “participated”, and (iii) in paragraph (c), by the insertion of “while performing a relevant controlled function” after “contravention”, and (g) by the insertion of the following subsection after subsection (8): “(8A) A notification under subsection (7) or (8) must also state that the person may, under Part VIIA, appeal against the finding, and any decision to impose a sanction, in accordance with section 33AW.”.

Alternative procedure when commission of or participation in prescribed contravention is acknowledged 47. The Act of 1942 is amended by the substitution of the following section for section 33AR: “33AR. (1) Subsection (2) applies if— (a) the Bank— (i) after considering the final report of an investigation, and any submissions, provided to it under section 33ANK(5), or (ii) where there are undisputed facts that in the reasonable opinion of the Bank render an investigation unnecessary, suspects on reasonable grounds that a person is committing or has committed a prescribed contravention, and (b) the person acknowledges the commission of the contravention.

Considerations relevant to imposition of sanctions 48. Part IIIC of the Act of 1942 is amended by the insertion of the following section after section 33AR: “33ARA. (1) In determining under section 33AQ or 33AR whether to impose a sanction on a natural person, what sanction to impose on a natural person, or the level of any monetary penalty to be imposed on a natural person, the Bank shall have regard, together with any other relevant considerations, to any of the following that appear to it to be relevant: (a) any consideration affecting the seriousness of the prescribed contravention concerned, including— (i) the person’s seniority and level of responsibility, and the nature of any role performed by the person, at the time of the person’s commission of or participation in the prescribed contravention, (ii) the extent to which the person’s conduct in committing or participating in the prescribed contravention departs from any standard to which the person is subject, (iii) whether the person’s conduct was intentional, negligent, or dishonest, (iv) whether the person’s conduct involved or facilitated the commission of an offence, and the nature and seriousness of any such offence, (v) the duration of the period over which the person committed or participated in the prescribed contravention, (vi) whether the sanction relates to more than one prescribed contravention, or to the repeated commission of or participation in a prescribed contravention, and (vii) any benefit gained or loss avoided, by means of the prescribed contravention, by the person or a regulated financial service provider or any other person, (b) the effect of the prescribed contravention, including— (i) whether it has affected or may affect the orderliness of the financial markets, including public confidence in those markets, (ii) any loss or detriment it has caused or may cause to a regulated financial service provider, or to customers, consumers, other market users or third parties, and (iii) whether any loss or detriment has affected or may affect vulnerable persons, (c) the conduct of the person during and after the person’s commission of or participation in the prescribed contravention, including— (i) how quickly, effectively and completely the person brought the prescribed contravention to the attention of a regulated financial service provider, the Bank or any other relevant regulatory authority, agency or criminal investigative body, and (ii) the degree of cooperation by the person with the Bank or any other relevant regulatory authority, agency or criminal investigative body provided during an investigation of the contravention,

(d) the previous record of the person, including— (i) whether or not the Bank has previously imposed a sanction on the person or the Bank or the Governor has issued a prohibition notice to the person under section 43 of the Central Bank Reform Act 2010 , and (ii) whether or not the person has previously been convicted of an offence relevant to the performance of a controlled function, (e) any consideration relating to pending or possible criminal proceedings, including whether such proceedings may be prejudiced by the imposition of a sanction, and (f) any matter relevant to the financial position of the person.

Amendment of section 33AS of Act of 1942 49. Section 33AS of the Act of 1942 is amended— (a) in subsection (2), by the substitution of “a natural person” for “a person”, and (b) by the substitution of the following subsection for subsection (3): “(3) If conduct engaged in by a person constitutes— (a) two or more prescribed contraventions by that person, (b) participation by that person in two or more prescribed contraventions by a regulated financial service provider, or (c) one or more prescribed contraventions by that person and participation by that person in one or more prescribed contraventions by a regulated financial service provider, an inquiry may be held under section 33AO or 33AR in relation to one or more of the contraventions, but only one monetary penalty may be imposed on that person under section 33AQ or 33AR in respect of the same conduct.”.

Amendment of section 33AT of Act of 1942 50. Section 33AT of the Act of 1942 is amended— (a) in subsection (1)— (i) by the insertion of “on a person” after “penalty”, and (ii) by the substitution of “person” for “financial service provider or other person concerned”, and (b) in subsection (2)— (i) in the words before paragraph (a), by the substitution of “person” for “financial service provider, or on a person concerned in the management of the financial service provider”, and (ii) in paragraph (a), by the deletion of “financial service provider or other”.

Observance of directions imposing disqualification or conditions 51. The Act of 1942 is amended by the substitution of the following section for section 33AU: “33AU. A regulated financial service provider shall ensure that a person is not permitted to perform a controlled function in relation to the financial service provider in circumstances, or in a manner, that would contravene a direction which is imposed under section 33AQ or 33AR by virtue of subsection (3)(d) or (da) or (5)(c) or (ca) of section 33AQ.”.

Amendment of section 33AV of Act of 1942 52. Section 33AV of the Act of 1942 is amended— (a) by the substitution of the following subsection for subsection (1): “(1) If the Bank suspects on reasonable grounds that— (a) a person is committing or has committed a prescribed contravention, or (b) a person is participating or has participated, while performing a relevant controlled function, in the commission of a prescribed contravention by a regulated financial service provider, it may, except where the person acknowledges the commission of or participation in the prescribed contravention, enter into an agreement under this section in writing with the person to resolve the matter.”, (b) in subsection (2)— (i) by the substitution of “the person” for “the financial service provider or person”, and (ii) by the substitution of “the person” for “that financial service provider or person”, (c) in paragraph (a) of subsection (3), by the deletion of “or 33AR”, (d) in subsection (3A), by the substitution of “the person” for “the regulated financial service provider or person concerned in the management of the financial service provider”, and (e) in subsection (3B)— (i) by the substitution of “the person” for “the regulated financial service provider or person”, and (ii) by the substitution of “the person” for “that regulated financial service provider or person”.

Appeal, confirmation and taking effect of decisions under this Part 53. The Act of 1942 is amended by the substitution of the following section for section 33AW: “33AW. (1) In this section— (a) an ‘inquiry decision’ means any of the following: (i) a finding made by the Bank under section 33AQ(1) or (2); (ii) a decision of the Bank imposing a sanction under section 33AQ; (iii) a decision of the Bank imposing a sanction under section 33AR(2)(b) or (4)(b), and (b) an ‘appeal decision’ means a decision of the Appeals Tribunal affirming or varying, or made in substitution for, an inquiry decision.

Confirmation of sanctions imposed by consent 54. The Act of 1942 is amended by the insertion of the following section after section 33AW: “33AWA. (1) Where the Bank by consent imposes a sanction under section 33AR(2)(a) or (4)(a), the Bank shall, as soon as practicable, make an application to the High Court for confirmation of the imposition of the sanction.

Repeal of section 33AX of Act of 1942 55. Section 33AX of the Act of 1942 is repealed.

Interpretation (Chapter 3) 56. Chapter 3 of Part IIIC of the Act of 1942 is amended by the insertion of the following section before section 33AY: “33AXA. In this Chapter— ‘inquiry members’ has the meaning given by section 33BE(7); ‘person presiding’ in relation to an inquiry means the inquiry member appointed to chair the inquiry.”.

Amendment of section 33AY of Act of 1942 57. Section 33AY of the Act of 1942 is amended— (a) in subsection (2), by the insertion of “(without prejudice to section 33BAA)” after “but”, (b) by the insertion of the following subsection after subsection (2): “(2A) At an inquiry the functions of the Bank include the making of submissions, leading of evidence and examination of witnesses on behalf of the Bank and any other function required for conducting the inquiry.”, and (c) by the substitution of the following subsection for subsection (3): “(3) Subject to section 33BE, the Bank may be assisted by a legal practitioner for the purpose of performing any of the functions referred to in subsection (2A).”.

Amendment of section 33AZ of Act of 1942 58. Section 33AZ of the Act of 1942 is amended— (a) in subsection (2), by the deletion of “financial service provider or other”, and (b) by the insertion of the following subsection after subsection (3): “(4) Subject to section 33AZA, the Bank may, where it is satisfied that in doing so a person’s reputation would not be unfairly prejudiced, publish a record of any procedural matter relating to an inquiry or a transcript of all or any part of the proceedings of an inquiry, whether with or without any information which would enable the persons taking part in the proceedings, or any one or more than one of them, to be identified, as it thinks appropriate.”.

Power to order information about proceedings not to be disclosed 59. The Act of 1942 is amended by the insertion of the following section after section 33AZ: “33AZA. (1) Subject to subsections (2) and (3), where the person presiding at an inquiry is satisfied that there are reasonable grounds for doing so, that person may direct that specified information relating to specified proceedings before the inquiry, so far as it is held in public, shall not be disclosed.

Confidential information provided for purposes of inquiry not to be disclosed 60. The Act of 1942 is amended by the insertion of the following section after section 33AZA (inserted by section 59 ): “33AZB. (1) Where confidential information is provided to a person for the purposes of an inquiry, that person shall not, subject to section 33AK, disclose that information unless authorised to do so by the Bank in writing or required to do so by law.

Amendment of section 33BA of Act of 1942 61. Section 33BA of the Act of 1942 is amended by the insertion of the following subsections after subsection (9): “(10) The Bank may apply to the High Court for an order referred to in subsection (11) in respect of any person who, at an inquiry— (a) behaves in a manner referred to in paragraphs (a) to (d) of subsection (9), (b) without reasonable excuse, fails to comply or refuses to comply with a requirement or request made by the person presiding at the inquiry, (c) threatens or insults any person presiding at the inquiry or any witness or other person summoned or authorised to attend before the inquiry, (d) interrupts the proceedings of the inquiry, (e) discloses, or authorises the disclosure of, evidence given before the inquiry or any of the contents of a document produced at a hearing that the person presiding at an inquiry has directed not to be published, (f) discloses, or authorises the disclosure of, evidence given before the inquiry at a hearing held in private or any of the contents of a document produced at a hearing held in private (except to a member of staff of that inquiry or as permitted by that inquiry), or (g) does any other thing that, if the inquiry were a court of law having power to commit for contempt, would be contempt of that court.