Neale Richmond (Dublin Rathdown, Fine Gael)
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460. To ask the Minister for Finance the engagement he has had with the Central Bank regarding the recent fine levied on a company (details supplied); his views on the impact of this case on the international reputation of Irish financial services in general; the steps being taken to ensure incidents of this type cannot occur again; and if he will make a statement on the matter. [14632/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Over the last number of weeks I have been consistent in setting out my views and those of Government regarding the expectation that we have in relation to the conduct of the financial services sector and especially senior people within those organisations that are in a position of trust. In the specific case referenced, the Regulator has taken action and made its views known.  Furthermore, the NTMA Board took action in relation to the State's dealing with the firm in question. In addition, the firm has also now taken subsequent actions in response to developments.

It is important to underline that Ireland has a robust and comprehensive regulatory regime for financial services providers, operated by an independent regulator, the Central Bank of Ireland. The importance of an independent regulator is widely recognised. As such they are the ones that determine what measures or actions need to be taken in relation to any potential or actual wrongdoing by regulated financial service providers. This responsibility includes the question of whether to refer any matters to other public authorities that may have a remit to investigate such matters.

My Department continues to keep matters under review in terms of the overall legislative and policy framework.  In that context, my Department is in regular contact with the Central Bank on such matters and periodically, I, as Minister for Finance, engage with the Central Bank as appropriate. However, it is important to continue to stress that the Central Bank is an independent Financial Regulator and the benefits of being so are clear to see.

In terms of the legislative framework pertaining to investment firms regulated by the Central Bank, there has been a significant strengthening of the rules in recent years arising from developments agreed at EU level requiring the necessary EU legislation being transposed as well as domestic legislation which went beyond the requirements of EU law.

The Markets in Financial Instruments Regulations 2017 transposes the EU Directive known as “MiFID”, which governs the provision of investment services in financial instruments. It applies to investment firms, wealth managers, broker dealers, product manufacturers and credit institutions authorised to carry out MiFID activities. 

These Regulations aim to reinforce the rules on securities markets by, among other things, improving the transparency of financial markets, strengthening governance rules for investment firms and stock exchanges, strengthening investor protection rules and increasing the powers of the Central Bank.

Under current MiFID rules, the Central Bank has a wide suite of powers, including sanctioning powers. It is empowered to apply a maximum monetary penalty, in the case of a legal person, not exceeding €10,000,000, or not exceeding 10% of the total annual turnover of the legal person, or in the case of a natural person, not exceeding €5,000,000. It is also empowered to apply a temporary or, for repeated serious contraventions, permanent ban, from a member of an investment firm’s management body exercising management functions in an investment firm. The Central Bank also has powers to bring and prosecute summary proceedings for an offence under the MiFID Regulations. In this regard, a person may be charged with having committed an offence under the MiFID Regulations even if the body corporate concerned is not charged with having committed an offence in relation to the same matter.

The 2017 MiFID Regulations were supplemented by the Markets in Financial Instruments Act 2018 which sets out a list of indicatable criminal offences pertaining to the MiFID Regulations.

More broadly pertaining to financial services, the Government has also committed to the introduction of legislation around Senior Executive Accountability Regime (SEAR) and the introduction of SEAR will complement existing Central Bank regulatory powers. SEAR will drive positive changes in terms of culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles. My officials are engaging with the Attorney General's Office in advance of submitting draft heads of Bill to Government so as to ensure that the correct balance is struck between appropriate additional powers for the Central Bank and the protection of individuals' constitutional rights.

Finally, I can assure the Deputy that the Government will maintain Ireland’s reputation as having a robust and comprehensive regulatory regime for financial services providers, operated by an independent regulator, the Central Bank of Ireland.