Michael McGrath (Cork South Central, Fianna Fail)
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82. To ask the Minister for Finance if there is a mechanism in place whereby the Financial Services and Pensions Ombudsman can refer issues and investigations to the Central Bank if it is of the view they are systemic issues; the number of such cases referred in each of the past four years and to date in 2018; and if he will make a statement on the matter. [18694/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Firstly, I must point out that the Financial Services and Pensions Ombudsman is independent in the performance of his statutory functions. I have no role in the day to day workings of the office.

As the Deputy will be aware the Financial Services and Pensions Ombudsman (FSPO) was established on 1 January 2018 under the Financial Services and Pensions Ombudsman Act 2017. I have been advised by the Ombudsman that Section 18 of the Act sets out how the Ombudsman shall co-operate with the regulatory authorities with a view to ensuring that this Act operates in a way that contributes to promoting the best interests of consumers and actual or potential beneficiaries of financial or pension services and to the efficient and effective handling of complaints.

The Act provides that the Ombudsman may make recommendations to the Central Bank in relation to measures that the Bank might take in order to effectively deal with persistent patterns of complaints. A similar provision existed in the legislation which underpinned the FSPO’s precursor body, the Financial Services Ombudsman (FSO), and the FSO and the Central Bank agreed a Memorandum of Understanding (MoU) which sets out the terms under which both parties give effect to these provisions. The MoU has not yet been updated to reflect the establishment of the FSPO on 1 January 2018, however, the original MoU continues to operate and is available on the FSPO website.

While the MoU provides for regular and routine information sharing, it also provides for specific information sharing whereby the FSPO will provide the Central Bank with detailed and specific information relating to a complaint (or complaints) for its general consideration in the following instances:

1. Where the circumstances of the case appear to call into question:

- a financial service provider’s fitness and probity;

- or whether any specified person may not be a fit and proper person to carry on a relevant function;

- or if it appears that a criminal offence or a serious regulatory contravention has occurred.

2. If it appears that a complaint or a series of complaints may give rise or are giving rise to issues of regulatory relevance to the Central Bank (whether or not the financial service provider has itself drawn the issues to the attention of the Bank).

3. If it appears that it would be desirable and appropriate for the Central Bank to consider using one or more of its regulatory tools, including the exercise of its investigative and other enforcement powers, the making of rules or the giving of guidance to financial service providers.

4. In response to a request from the Central Bank where it is, or is contemplating, using any of its regulatory tools in relation to the subject matter of the request.

5. Where it appears that a regulated entity has failed to comply with an award, determination, or direction (or equivalent thereof) made by an Ombudsman, or a court order in respect thereof.

6. Where it appears that a financial service provider has, without reasonable excuse, failed to comply with a requirement to provide information or to produce documents to an Ombudsman.

7. If it appears that it may be necessary for the Central Bank to exercise its powers to address shortcomings in a financial service provider’s complaint handling procedures.

The following table outlines the number of cases in which the FSPO/FSO reported potential systemic issues to the Central Bank in each of the past four years and to date in 2018.