Written answers

Thursday, 4 July 2019

Department of Finance

Proposed Legislation

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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112. To ask the Minister for Finance when he expects the central bank (amendment) Bill to be introduced into the Houses of the Oireachtas; and if he will make a statement on the matter. [29028/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As I announced recently, I received the agreement of Government on 18th June to begin the process of drafting heads of a Central Bank Amendment Bill. This follows extensive preparatory work by my officials, in consultation with the Central Bank, over the past year.

The next step in the process is engagement by my officials with the Office of the Parliamentary Counsel to begin drafting Heads of Bill. The issues being addressed by this legislation are complex and are required to be constitutionally sound in the event of legal challenge. This will require careful drafting to ensure that the proposed legislation is robust, fit for purpose, and legally sound. It is my intention to bring forward draft heads of Bill to Government for approval later this year and to progress the Bill for debate in the Houses following this.

The proposed legislation is necessary and timely and will drive positive changes in terms of wider banking culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

It is intended that the legislation will give the Central Bank the power to make regulations intended to drive greater accountability in the financial sector, raising the standards of expected behaviour for individuals and firms, in order to achieve better outcomes for consumers and improve the sustainability of the financial system.

The draft Heads of Bill will provide for:

- Introduction of a Senior Executive Accountability Regime (SEAR) which places obligations on firms and senior individuals within them to set out clearly where responsibility and decision-making lies;

- Introduction of Conduct Standards for individuals and firms to provide for statutory powers to set and impose binding and enforceable obligations on all Regulated Financial Service Providers (RFSPs) and individuals working within them with respect to expected standards of conduct;

- An enhanced Fitness & Probity Regime which includes provisions to enhance its effective operation and its ability to support the Central Bank’s proposed individual accountability framework and the conduct standards for individuals and firms;

- Breaking the “Participation Link” which addresses the known deficiency in the legislation which requires the Central Bank to first prove a contravention of financial services legislation against a RFSP before it can take an action against an individual; and

- Technical amendments to improve existing legislation and clarify certain statutory processes.

I also intend to address the principles set forth in Deputy Pearse Doherty's Private Member's legislation, around the provision of false and misleading information to the Central Bank.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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113. To ask the Minister for Finance when he plans to introduce amendment legislation regarding limited partnerships; and if he will make a statement on the matter. [29030/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The updating of the Investment Limited Partnership (ILP) Act, 1994 is a priority on the Government's legislative programme. The ILP Act has been in use since 1994 and it is widely acknowledged that it needs to be updated to fit the environment and its intended clientele. There have been significant changes in the financial area in the past 25 years and the revisions contained in the published Bill are aimed at modernising the legislation. In doing so, this will underpin one of the strategic priorities in the recently published 'Ireland for Finance' strategy document, which is to make Ireland a global location for private equity funds.

The Bill of the amendments to the 1994 ILP Act was recently published. The intention is to progress the Bill through the Oireachtas as soon as possible and with the cooperation of all concerned it is hoped that it will have passed all stages this year. With this in mind, I anticipate that the Bill will be introduced into the House in the early Autumn session.

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