Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As the Deputy is very well aware, the Central Bank has recently reprimanded Ulster Bank and Davy for regulatory breaches that resulted in substantial fines being issued. I wish to recognise the extensive work undertaken by the Central Bank in achieving those results. The bank already has extensive regulatory powers to investigate and impose sanctions where there are breaches of financial services legislation. The introduction of a SEAR will complement those existing powers, ensuring that the Central Bank has the additional powers necessary to provide appropriate regulation.

The legislation required to provide for a SEAR is complex as it gives rise to a number of constitutional issues. Careful consideration has been given to the proposals due to the need to ensure they are robust and can withstand legal challenge. Officials from my Department have been in ongoing and detailed discussions with the Central Bank and the Attorney General's office on the detail of the proposed Bill.

The SEAR will require firms to set out clearly the roles and responsibilities of their senior executives, including the production of management responsibility maps documenting key management and governance arrangements in a comprehensive and accessible way. This should ensure there is clarity as to who is responsible for what. The legislation will include conduct standards for individuals and firms, giving the Central Bank additional powers to enforce obligations on financial services providers, and relevant individuals working within them, with respect to expected standards of conduct. The legislation will further enhance the existing fitness and probity regime and break the participation link to facilitate the Central Bank in taking action against either a firm or an individual where a contravention of legislation occurs.

As work on the various aspects of the legislation is advanced, I will consider how the SEAR will be rolled out across the various sectors of the financial services industry. I expect that the most significant financial sectors will be encompassed by the legislation.

I intend that the heads of the Bill will be drafted and presented to the Government before the summer recess. That is subject to the Attorney General's advice and the adequacy of the safeguards included to the protect the constitutional rights at stake.

See this speech in context