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Sunday, 14th April 2024
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Taoiseach’s response to over-regulation welcomed Back  
Both industry and professional services sources have offered a warm welcome to the Taoiseach’s plan to re-assess the controversial Section 45. This response reflects growing concerns about Ireland’s onerous regulatory regime amongst industry, in the face of increasing media criticism about a lack of regulation.
The Taoiseach Bertie Ahern’s announcement on Thursday, April 21st, that the Companies Act directors’ compliance statements are being referred to the Company Law Review Group (CLRG) for review, has been warmly welcomed by the industry. He indicated that the proportionality, efficacy and appropriateness of Section 45 would be reviewed.

Gay Mitchell, one of two Irish representatives on the European Parliament's Economic and Monetary Committee, made clear that 'Finance Dublin' will be a core part of his brief.

The move comes in the face of recent reports in the international and domestic media depicting Ireland as the ‘Wild West’ of the financial services world, which have raised the ire of the Irish financial services industry, at a time when the industry is battling against decreasing competitiveness due to over-regulation.

Speaking at the 6th Annual Finance Dublin Conference held on April 5th, 6th, Liam O’Reilly, CEO of IFSRA, addressed both of these issues. He defended Ireland’s regulatory regime by saying, ‘we pride ourselves in matching best international practice in all aspects of financial regulation’. And he acknowledged the industry’s concerns with respects to over-regulation, saying that IFSRA, ‘will not introduce or impose unnecessary regulatory burdens that will effect the continued competitiveness of our financial industry and will minimise the impact of such burdens coming from Europe’.

Key to the industry’s over-regulation concerns is the recently released ‘Fitness & Probity of Directors’ consultation process launched by the IFSRA. Also speaking at the event, Dermot Cahillane, managing director of Depfa Bank, called on the regulator to ‘scrap’ the new regime, saying that it could have a major effect on people’s perceptions of Ireland as a place to do business, and that it is a ‘layer of compliance we don’t need’. He added that the questionnaire based approach has the capacity to make it more difficult for Depfa to do their business, particularly as Depfa has several international branches.

The consultation process, which aims to develop a framework of standards for testing the competence and probity of directors and senior managers of financial services firms, will come to an end in mid-June.

And speaking on April 6th, David Went, group chief executive of Irish Life & Permanent plc, said that, ‘My concern is that after a period of pretty relentless criticism, we’re coming closer to a tipping point where the cumulative effect could begin to influence the attitude of international institutions towards the sector’.

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