The financial services industry may have to pay a contribution towards Ireland’s new financial regulatory structure, according to the Central Bank and Financial Services Authority of Ireland Bill 2002, just published. The 235 page Bill has set out the proposed structure of Ireland’s new financial services regulation but also states that the management of the body will have the power to impose levies and fees over those it regulates, which will leave the industry worried over the price it may pay for cohesive regulation.
In the Bill it states ‘Power to impose levies 33J (1) The purpose of this section is to enable the Regulatory Authority to have sufficient funds to enable it to perform its functions and exercise its powers. (2) The Chief Executive, with the agreement of the other members of the Regulatory Authority, may make regulations prescribing levies to be paid by persons who are subject to regulation under the designated enactments and designated statutory instruments.’ And goes on to add in a later paragraph ‘Power of Chief Executive to prescribe fees 33K (1) The Chief Executive may, with the agreement of the other members of the Regulatory Authority, make regulations prescribing fees for the purpose of any enactment that provides for the payment of a fee by reference to this section. (2) The Chief Executive may, with the agreement of the other members of the Regulatory Authority, make regulations providing for all or any of the following matters: (a) the persons, or classes of persons, who are required to pay specified kinds of fees; (b) the amounts of specified kinds of fees; (c) the collection of fees.’
There is no indication yet how this would work. In 2002, the estimated cost of the regulator is 315 million.
The Bill is largely unchanged from its proposed format, with the main differnce being the creation of a monetary committee rather than a separate monetary authority within the overall Central Bank authority as originally envisaged.
The Bill proposes to establish a new entity- the Irish Financial Services Regulatory Authority to manage the supervision of financial institutions in Ireland: this entity will operate within the Central Bank of Ireland’s legal structure, but will have its own chief executive, chairperson and board with independent functions. The title of the Central Bank of Ireland will change to reflect the new structure and will become the Central Bank and Financial Services Authority of Ireland.
The Bill also proposes to bring together the supervision of the major sectors of the financial services industry; supervision of insurance undertakings will now be carried out by the same institution as the supervision of banks and the funds industry. A consumer director will take on the current powers of the director of consumer affairs in relation to financial institutions and will also be a full member of the Board of IFSRA.
An interim board to manage the transition to the new regulatory arrangements has been appointed. The chairman of the interim board will be Brian Patterson, former chief executive officer of Wedgwood and a former director general of the Irish Management Institute. The other members of the Interim Board are Alan Ashe, former managing director, Standard Life Assurance, Friedhelm Danz, company chairman, Gerard Danaher, senior counsel, John Dunne, former director general of the IBEC, Jim Farrell, director of funding and debt management, National Treasury Management Agency, Deirdre Purcell, journalist and member of the Council of the Credit Institutions’ Ombudsman, and finally Dermot Quigley, former chairman of the Revenue Commissioners.
A second Bill will be announced later this year to establish a financial ombudsman and consultative panels. |
