(i) Change of Name

Following the commencement of the Central Bank Reform Act 2010, the Irish Financial Services Regulatory Authority has been renamed the "Central Bank of Ireland" with effect from 1 October, 2010.

The Central Bank has confirmed that it does not require approved documents or contracts to be updated immediately in order to reflect this change in name. Such updates can be implemented when documents next come up for review.

(ii) Annual Report and Strategic Plan

On 16 July, 2010, the Central Bank published its 2009 Annual Report and Strategic Plan for 2010 to 2012.

The major new measures and initiatives featured in the Strategic Plan include:

  • A refocused approach to strengthening the financial system including a new approach to financial stability assessment;
  • The development of a new regulatory model with an enhanced supervisory capacity for the detection and correction of problems with an active and challenging approach;
  • Interacting with new EU supervisory bodies, such as the European Systemic Risk Board and the European System of Financial Supervisors;
  • Building on consumer protection including a review of the Consumer Protection Code;
  • Greater attention in our economic research on the functioning of the financial system and fuller collaboration with the universities, ESRI and the wider public service; and
  • Moving towards a 100% charge back arrangement on the costs to industry to reduce the cost to the taxpayer.

(iii) New Chairperson of Takeover Panel

On the 19 October, Mr Denis McDonald, S.C. was announced, as the Chairperson of the Irish Takeover Panel for a three year period.

The Irish Takeover Panel is the statutory body responsible for monitoring and supervising takeovers and other relevant transactions in relevant companies in Ireland.

Mr McDonald was called to the Bar in July 1986 and called to the Inner Bar in October 2000. He practices primarily in commercial law.

(iv) Consultation Paper 45 – amendments to the Minimum Competency Requirements ("CP45")

During the second quarter, the Central Bank published CP45 regarding the Minimum Competency Requirements and sought industry views on the proposals by the 13 August, 2010. The Central Bank was expected to publish their findings in the final quarter of this year but it is more likely to be in the New Year. In summary, CP45 proposes the following:

  • changing the 3 year CPD cycle to an annual 15 formal hour requirement;
  • phasing out 'grandfathering arrangements' over a 4 year period whereby a recognised qualification must be achieved by 2015;
  • amendment to making public the register of accredited individuals on request; and
  • detailed requirements are proposed regarding records to be maintained to demonstrate compliance with the Requirements.

The Central Bank is aiming at introducing the new requirements in the second quarter of 2011.

(v) Consultation paper 47 – Review of Consumer Protection Code ("CP47")

In late October, the Central Bank issued a consultation paper on amendments to the Consumer Protection Code. The strategic plan for 2008 – 2010 had earlier suggested such a consultation process commencing in 2009.

The closing date for submissions is 10 January, 2011 and full details of CP47 can be found on www.financialregulator.ie .

(vi) Draft Directive Deposit Guarantee Scheme

In November 2010, the Head of Payments and Securities Settlements in the Central Bank (Paul Molumby) welcomed the proposals set out in the draft recast Deposit Guarantee Schemes Directive.

The proposal is a comprehensive reform of EU Deposit Guarantee Schemes and follows on from the EU "emergency measures" taken in 2009, through Directive 2009/14/EC, which principally dealt with increasing the level of coverage to €100,000 for all schemes.

The four key elements of the draft directive are:

1. The simplification and harmonisation of the scope of coverage;

2. Faster payout times;

3. Revisions to funding arrangements; and

4. Enhanced cooperation between deposit guarantee schemes across Europe.

The proposals are beneficial from a depositor's perspective and give confidence that Deposit Guarantee Schemes can assist in maintaining financial stability. In particular, depositors would receive compensation quicker than was previously the case.

While payout times will be reduced from three months to 20 working days with effect from the 1 January 2011 under Directive 2009/14/EC, the draft directive proposes reducing this to seven calendar days by the end of 2013.

This is a draft directive, and certain aspects may be clarified or changed as it progresses through the EU approval process. The Central bank continue to closely monitor developments.

(vii) Consultation Paper 48 - Minimum activities of Irish-domiciled investment Funds ("CP48")

Having regard to the imminent implementation of UCITS IV (and particularly the UCITS Management Company Passport), the Central Bank has issued a consultative paper regarding the minimum activities regime for Irish authorised funds.

The issues raised from an industry perspective were:

  • Proposal of a definition for maintenance of the shareholder register within the state;
  • Request grandfathering/transitional arrangements for current derogations; Separate outsourcing requirements where that outsourcing is being carried out intragroup as opposed to outsourcing to a third-party;
  • Recognition that for administration services provided to non-Irish funds it may not be possible to require the core administration activities as outlined in CP48, if the administration company is not contracted to provide all core administration functions; and
  • Highlight that the BCP requirements in CP48 go further than the CEBS BCP requirements and should therefore be made more flexible and proportionate.

Responses were due by 31 December, 2010. Dillon Eustace will provide updates on the outcome of this consultation process in due course.

(viii) Enforcement Strategy and Risk Based Supervision

On the 21 December 2010, the Central Bank published its Enforcement Strategy which sets out the enforcement regime of the newly established Enforcement Directorate for 2011- 2012.

The key objectives of the Enforcement Strategy include:

  • Improving effective compliance through the robust application of the enforcement powers of the Central Bank;
  • Enforcement activity prioritised in accordance with the risk profile of the financial institution to ensure that enforcement resources will be directed to those areas where it is perceived that the greatest risks lie; and
  • An increased focus on the actions of persons involved in the management of financial institutions.

On the 22 December 2010, the Central Bank published its Consultation Paper on Impact Metrics for the Risk Based Supervision of Financial Firms by the Central Bank.

Interested parties are invited by this Consultation Paper to submit proposals as to what indicators the Central Bank should use to calibrate the impact of the circa 15,000 firms that it regulates. The result of this consultation will be used alongside the Central Bank's own analysis of the most pertinent indicators to determine the metrics which will be used in its approach to supervision of different entities as well as the fees' blocks into which different institutions should fall.

The consultation will run from 22 December until 24 February 2011. Responses should be sent to Risk@centralbank.ie or by post to Miss Helen Guinane, Risk Division, Central Bank of Ireland, PO Box No. 559, Dame Street, Dublin 2.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.