Clare Daly (Dublin North, United Left)
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232. To ask the Minister for Finance his plans to assist those who invested their pension fund with a company (details supplied) and whose fund was misappropriated, leaving them without any retirement income, in view of the fact, that as a result of legislative change, neither the regulator nor any of the directors have been held accountable to date; and if he will make a statement on the matter. [7887/15]

Michael Noonan (Limerick City, Fine Gael)
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I understand that the Deputy is referring to the case of Custom House Capital (CHC) which is now in liquidation.

The Central Bank's investigation into CHC and persons concerned in its management has been on-going since the publication of the Final Report to the High Court by Court Appointed Inspectors dated 19 October 2011.  Upon presentation of the Final Inspectors' Report to the High Court in October 2011, Mr. Justice Hogan ordered that CHC be wound up immediately.  It should be noted that copies of the Final Report have been provided to other relevant state authorities for their consideration i.e. the Minister for Justice and Equality, to the Director of Public Prosecutions, to the Director of Corporate Enforcement, to the Revenue Commissioners and to the Garda Commissioner.

Following consultation with An Garda Siochána, the Central Bank's investigation has been deferred pending completion of investigations by An Garda Síochána.

In order to enhance the investor protection legislative framework, the Central Bank has been provided with extensive new powers since the onset of the financial crises to prevent the loss of client assets as occurred in the case of CHC. The principal developments are set out below:

New rules in respect of key management positions

Under the Central Bank Reform Act 2010 a new Fitness and Probity Regime came into effect on 1 December 2011 for all regulated financial service providers other than credit unions (whose fitness and probity regime came in on 1 August 2013).  This new regime was fully implemented by 1 December 2012.

47 senior positions are prescribed as Pre-Approval Controlled Functions for regulated financial service providers other than credit unions.  The prior approval of the Central Bank of Ireland is required before an individual can be appointed to a Pre-Approval Controlled Function.

Enhanced monitoring and enforcement powers for the Central Bank

The Central Bank (Supervision and Enforcement) Act, 2013 (the "Act") was enacted on 11 July 2013 and came into operation on 1 August 2013, with the exception of Section 72. This Act significantly enhances the capacity of the Central Bank to supervise regulated financial services providers and enforce financial services legislation. The fitness and probity provisions are reinforced by the whistleblower protections. The Act also provides for the Central Bank to commission, as part of the proper and effective regulation of financial service providers, an independent expert report at the cost of the financial service provider. It strengthens the authorised officer regime, enables the Central Bank to secure assurances from auditors of regulated financial service providers.  It also strengthens the enforcement powers of the Central Bank and provides for a substantial increase in monetary penalties. The Central Bank also has the power to suspend or revoke a regulated entity's authorisation following an Inquiry.

Client Assets Regulations for investment firms

An independent review of the Regulatory Regime for the Safekeeping of Client Assets was published by the Central Bank in 2012 and is available on the Central Bank website. The Central Bank accepted the specific recommendations contained in this independent review and established a process of implementing all of the necessary changes required.  In 2013 the Central Bank published on its website a Consultation Paper on Client Assets Regulations and Guidance, which will replace the existing client assets requirements (issued in 2007). It is envisaged that the new rules for the Safekeeping of Client Assets will be in place in the first half of this year.

Return of Investor Funds Client or Other Client Property Regulations under the Investor Compensation Act 1998

This Investor Compensation Act was amended in 2013 (section 33b) to give the Minister for Finance regulation making powers providing for the return of investors' funds or investment instruments following the appointment of an administrator, where the Minister considers it necessary to do so in order to provide for their efficient, equitable and prompt return.  A Working Group, chaired by my Department and also represented by the Central Bank and the Investor Compensation Company Limited, was established in April 2014 to draft such regulations. A public consultation on these draft regulations was held (closed on 23 January 2015). I would anticipate being able to bring forward these regulations in the first half of this year. They will very much complement the Client Assets Regulations for investment firms.

The Central Bank provides updates on the CHC case  which can be accessed at: .