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21 2004

Central Bank and Financial Services Authority of Ireland Act 2004

SCHEDULE 1

Amendment of Acts Consequential on Insertion into Central Bank Act 1942 of Part IIIC

Section 10(2) .

PART 1

Amendment of Central Bank Act 1971

Item

Provision affected

Amendment

1.

Section 21 (as substituted by section 38 of the Central Bank Act 1989)

Substitute the following section:

“Bank may give certain directions to holders of licences.

21.—(1) In this section—

‘banking activity’ means—

(a) carrying on banking business, or

(b) making payments other than those that are specifically connected with carrying on banking business, or

(c) acquiring or disposing of assets or liabilities;

‘prescribed circumstance’, in relation to the holder of a licence, means any of the following:

(a) the holder has become or is likely to become unable to meet its obligations to its creditors;

(b) the holder is not maintaining or is unlikely to be in a position to maintain adequate capital resources having regard to the volume and nature of the holder's business;

(c) the holder is failing or has failed to comply with a condition imposed in relation to the licence in accordance with section 10 and the circumstances are such that the Bank considers that the stability and soundness of the holder are or will be affected by the failure;

(d) the holder is conducting business in such a manner as to jeopardise and prejudice the security of deposits taken by it or the rights and interests of persons who made those deposits;

(e) the holder and one or more than one other entities are under common control (whether or not any such other entity holds a licence) and the Bank is of the opinion that the common control is not in the interest of persons who keep deposits with the holder;

‘specified’, in relation to a direction given under this section, means specified in the direction.

(2) On becoming satisfied that it would be in the public interest to do so, or that a prescribed circumstance exists in relation to the holder of a licence, the Bank may, by direction given in writing, require the holder to suspend, for a specified period not exceeding 6 months, any specified banking activity except as authorised by the Bank.

(3) A direction given under subsection (2) ceases to have effect—

(a) at the end of the period specified in the direction, or

(b) if, on the hearing of an appeal to the Irish Financial Services Appeals Tribunal under Part VIIA of the Central Bank Act 1942 , that Tribunal has extended the period of operation of the direction, at the end of that extended period, or

(c) on the making of a winding-up order in respect of the holder of the licence concerned,

whichever first occurs.

(4) While a direction under subsection (2) has effect—

(a) winding-up or bankruptcy proceedings may be commenced in relation to the holder of the licence concerned, and

(b) a receiver over the property of that holder may be appointed, and

(c) the property of that holder may be attached, sequestered or otherwise distrained,

only with the prior approval of the Court.

(5) If the Bank is satisfied that, despite the fact that the holder of the licence concerned appears to it to be able to meet the obligations that the holder owes to its creditors, the circumstances that gave rise to the direction are unlikely to be rectified, it may, by further direction, require the holder—

(a) to prepare, in consultation with the Bank, a scheme for the orderly termination of his banking business and the discharge of the holder's liabilities to persons who have deposits maintained with the holder under the supervision of the Bank, and

(b) to submit the scheme to the Bank for its approval within 2 months after the giving of the further direction.

(6) The Bank may approve or refuse to approve a scheme submitted to it under subsection (5). In approving such a scheme, the Bank may impose such conditions as it considers appropriate.

(7) If the holder of the licence to whom a direction has been given under this section—

(a) fails to comply with the direction, or

(b) fails to comply with the terms of a scheme approved by the Bank under subsection (6),

the Court may, on the application of the Bank, make such order as the Court considers appropriate, including an order of committal or a winding-up order on the ground that it is just and equitable that the holder should be wound up.

(8) If a winding-up order is made in proceedings brought under this section against the holder of a licence to whom a direction has been given under this section, the Companies Acts apply to the holder in the same way as if the order had been made on a winding-up petition under those Acts and as if for any reference in that law to the presentation of the winding-up petition there were substituted a reference to the making of the winding-up order under this section.

(9) The Bank may, by notice in writing given to the holder of the licence concerned, vary or revoke a direction given under this section. However, the Bank may not vary a direction given under subsection (2) by extending the operation of the direction for a period exceeding 12 months from the date on which the direction first took effect.

(10) A direction given by the Bank under this section, and any variation of the direction under subsection (9), are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .

(11) For the purpose of paragraph (e) of the definition of ‘prescribed circumstance’ in subsection (1), the holder of a licence and one or more than one other entities are taken to be under common control if the decision as to how or by whom each are managed can be made by the same person or by the same group of persons acting in concert.”.

PART 2

Amendment of Insurance Act 1989

Item

Provision affected

Amendment

1.

Section 18

Substitute the following subsections for subsections (5) to (9):

 

 

“(5) A direction under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

(6) The Bank may from time to time vary or revoke a direction given under this section.”.

2.

Section 31

Repeal subsections (2), (4), (5) and (7).

3.

Section 58

Substitute the following subsection for subsections (6) and (7):

 

 

“(6) A decision of the Bank revoking or suspending an authorisation is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

 

PART 3

Amendment of Building Societies Act 1989

Item

Provision affected

Amendment

1.

Section 10

Substitute the following subsections for subsection (4):

 

 

“(4) If the Central Bank decides to refuse to register a memorandum and rules, it shall, within 6 months after the relevant date, notify the signatories of the memorandum and the rules of its decision and of its reasons for it. The relevant date is—

 

 

(a) the date of delivery of the rules and memorandum, or

 

 

(b) the date of receipt of such other information as the Central Bank requires for the purpose of deciding whether or not to register the rules and memorandum,

 

 

whichever is the later.

 

 

(4A) A refusal to register a memorandum and rules is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 . However, the Irish Financial Services Appeals Tribunal may hear and determine an appeal against such a refusal only if made by at least 10 signatories of the memorandum and rules.”.

2.

Section 14

Substitute the following subsection for subsection (5):

 

 

“(5) If the Central Bank refuses to register under subsection (3) a copy of an alteration delivered to it under subsection (2), it shall, within 2 months of the receipt by it of the copies, notify the society of its decision and of its reasons for it. Such a refusal is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

3.

Section 40

Insert the following subsection after subsection (6):

 

 

“(7) The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

 

 

(a) a decision of the Central Bank revoking a society's authorisation otherwise than at the request of the society;

 

 

(b) a decision of the Central Bank directing a society to suspend for a specified period—

 

 

(i) the raising of funds, or

 

 

(ii) the making of payments, or

 

 

(iii) the acquisition or disposal of other assets or liabilities.”.

4.

Section 110

(a) Substitute the following subsection for subsection (5):

 

 

“(5) The cancellation of the registration of a society under subsection (2) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

 

 

(b) Substitute the following subsection for subsection (6):

 

 

“(6) A society ceases to be a building society within the meaning of this Act if the registration of the society is cancelled under subsection (2) or (3). This subsection is subject to any decision arising from an appeal against the decision under Part VIIA of the Central Bank Act 1942 .”.

5.

Fourth Schedule

In paragraph 1, substitute the following subparagraph for subparagraph (3):

 

 

“(3) The Central Bank shall, before deciding whether or not to revoke the authorisation, consider any representations made to it under subparagraph (1) or (2) in relation to the proposed revocation and shall serve on the society and on every officer a notice stating its decision and the grounds for it.”.

6.

Fifth Schedule

Repeal the Schedule.

 

PART 4

Amendment of stock exchange act 1995

Item

Provision affected

Amendment

1.

Section 10

Substitute the following subsection for subsections (3) and (4):

 

 

“(3) A direction given under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

2.

Section 11

Substitute the following subsection for subsection (3):

 

 

“(3) The imposition of a condition or requirement under subsection (1) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

3.

Section 14

Substitute the following section for section 14:

 

 

Bank may revoke approval of stock exchange.

14.—(1) The Bank may revoke the approval of an approved stock exchange on a request made to it by or on behalf of the exchange.”.

(2) The Bank may also revoke the approval of an approved stock exchange on any of the following grounds:

 

 

 

(a) that the exchange has failed to operate as an approved stock exchange within 12 months of the date on which the approval was granted;

 

 

 

(b) that the exchange has failed to operate as an approved stock exchange for a period of more than 6 months;

 

 

 

(c) that the exchange is being wound up;

 

 

 

(d) that it is expedient to revoke the approval in the interest of the proper and orderly regulation of approved stock exchanges or in order to protect investors;

 

 

 

(e) that the exchange has been convicted on indictment of an offence under this Act or any other designated enactment or designated statutory instrument, or an offence involving fraud, dishonesty or breach of trust;

 

 

 

(f) that circumstances have materially changed since the granting of approval to the exchange such that, if an application for approval was made at the relevant time, a different decision would be taken in relation to the application for approval;

 

 

 

(g) that the approval was obtained by providing statements or information known by the applicant for approval to be false or misleading;

 

 

 

(h) that the exchange no longer complies with capital or other financial requirements, specified by the Bank from time to time;

 

 

 

(i) that the exchange is not maintaining or is unlikely to be able to maintain adequate capital or other financial resources having regard to the volume and nature of its business;

 

 

 

(j) that the exchange has become unable or is, in the opinion of the Bank, likely to become unable to meet its obligations to its creditors;

 

 

 

(k) that the exchange has failed to comply to a material degree with a requirement of this Act;

 

 

 

(l) that the exchange has failed to comply with a condition or requirement that was imposed when approval was granted or was imposed later;

 

 

 

(m) that the exchange has suspended payments lawfully due;

 

 

 

(n) that the Bank considers that any director, manager or qualifying shareholder of the exchange no longer complies with the conditions of competence and probity required by section 9;

 

 

 

(o) that the exchange has so organised itself that it, and any related undertaking or associated undertaking, either collectively or individually, is no longer capable of being regulated to the satisfaction of the Bank under this Act.

 

 

 

(3) The Bank may not revoke the approval of a stock exchange unless it has served notice on the exchange of its proposal to revoke the approval. The notice must include a statement of the Bank's reasons for proposing to revoke the approval.

 

 

 

(4) If the approval of a stock exchange is revoked and the exchange is not a company that is being wound up, the following provisions apply:

 

 

 

(a) the exchange and its members continue to have the obligations imposed by this Act until all of its liabilities and other obligations have been discharged to the satisfaction of the Bank;

 

 

 

(b) the exchange shall, as soon as possible after the revocation, notify the Bank, the members of the exchange and such other persons as the Bank specifies of the measures being taken to discharge without delay the liabilities and other obligations of the exchange.

 

 

 

(5) If—

 

 

 

(a) a former approved stock exchange has not notified the Bank in accordance with paragraph (b) of subsection (4), or

 

 

 

(b) a former approved stock exchange has notified the Bank in accordance with that paragraph but the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

 

 

 

(c) a former approved stock exchange has notified the Bank in accordance with that paragraph but the Bank is of the opinion that the exchange has failed to take all reasonable steps to notify persons specified by the Bank under that paragraph.

 

 

 

the Bank may, by direction given in writing, prohibit the exchange from doing all or any of the following without the prior authorisation of the Bank for such period, not exceeding six months, as is specified in the notice:

 

 

 

(i) creating liabilities;

 

 

 

(ii) dealing with, or disposing of, assets or specified assets of the exchange, or of members of the exchange, in any manner;

 

 

 

(iii) engaging in any kind of transaction, or in any specified transaction or class of transactions;

 

 

 

(iv) making payments to any person.

 

 

 

(6) If the Bank has given a direction under subsection (5), the Bank may further direct the former approved stock exchange to prepare and submit to the Bank for its approval, within 2 months of the earlier direction, a scheme for the orderly discharge of the liabilities and other obligations of the exchange.

 

 

 

(7) A former approved stock exchange to which a direction has been given under this section shall comply with the direction. Each person who, immediately before the approval of the stock exchange was revoked, was concerned in the management of the exchange, shall ensure that the former approved stock exchange complies with the direction.

 

 

 

(8) If the approval of an approved stock exchange is revoked and the exchange is a company that is being wound up, the following provisions apply:

 

 

 

(a) the liquidator of the exchange has, in addition to the liquidator's obligations in respect of the winding-up, the same obligations as the exchange would have had if it were a former approved stock exchange to which subsection (4) applies;

 

 

 

(b) despite paragraph (a) of this subsection, the Bank may, by notice in writing given to the exchange, discharge the liquidator from complying with the obligations imposed by paragraph (b) of subsection (4) and impose on the liquidator such other obligations corresponding to those set out in that paragraph as the Bank considers appropriate.

 

 

 

(9) Nothing in subsection (8) affects an obligation under this Act of any of the members of the former approved stock exchange concerned.

 

 

 

(10) Within 28 days after revoking the approval of an approved stock exchange under this section, the Bank shall publish a notice of the revocation in Iris Oifigiúil and in at least one newspaper that circulates within the State.

 

 

 

(11) A stock exchange whose approval is revoked under this section shall cease to operate as an approved stock exchange from the date on which it is notified of the revocation.

 

 

 

(12) A person shall not, without the consent of the Bank, provide an investment service on premises knowing that the premises were formerly used as a stock exchange by a stock exchange whose approval has been revoked.

 

 

 

(13) The revocation of an approval by the Bank and the giving of a direction under this section are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(14) The Bank may not exercise its power under subsection (2)(n) in respect of an approved stock exchange unless it has given the exchange an opportunity to remove the director or manager from office or otherwise deal with the concerns of the Bank in relation to the probity or competence of the person within such period as the Bank specifies.

 

 

 

(15) A person who fails to comply with subsection (7) or (11) or contravenes subsection (12) commits an offence.”.

4.

Section 18

Substitute the following subsections for subsection (3):

 

 

“(3) The Bank shall not refuse an application for an authorisation unless it has served on the applicant a notice of its intention to refuse the application. The notice must include a statement of the grounds on which it is proposed to refuse the application.

 

 

(3A) The refusal by the Bank to grant an authorisation to a proposed member firm under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

5.

Section 20

Substitute the following subsections for subsection (3):

 

 

“(3) If the Bank does not communicate the information as required by subsection (2), it shall give reasons for the refusal to the authorised member firm concerned.

 

 

(3A) A failure or refusal by the Bank to comply with subsection (2) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

6.

Section 21

Substitute the following subsection for subsections (3) and (4):

 

 

“(3) The imposition by the Bank of a condition or requirement under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

7.

Section 22

Substitute the following subsection for subsection (3):

 

 

“(3) The imposition by the Bank of a condition or requirement under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

8.

Section 23

Substitute the following subsections for subsection (2):

 

 

“(2) If the Bank refuses to consent to an amendment of or addition to the memorandum of association or articles of association of an authorised member firm, it shall serve a notice on the firm stating that it refuses to consent to the amendment or addition. The notice must include a statement of the reasons for the refusal.

 

 

(3) The refusal of the Bank to consent to an amendment or addition to the memorandum of association or articles of association of an authorised member firm is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

9.

Section 24

Substitute the following section for section 24:

 

 

“Bank may revoke authorisation of member firm.

24.—(1) The Bank may revoke the authorisation of an authorised member firm on a request made to it by or on behalf of the firm.

(2) The Bank may also revoke the authorisation of an authorised member firm on any of the following grounds:

 

 

 

(a) that the firm has failed to operate as an authorised member firm within 12 months of the date on which the authorisation was granted;

 

 

 

(b) that the firm has failed to operate as an authorised member firm for a period of more than 6 months;

 

 

 

(c) that the firm is being wound up;

 

 

 

(d) that it is expedient to revoke the authorisation in the interest of the proper and orderly regulation of authorised member firms or in order to protect investors;

 

 

 

(e) that the firm has been convicted on indictment of an offence under this Act or any other designated enactment or designated statutory instrument, or an offence involving fraud, dishonesty or breach of trust;

 

 

 

(f) that circumstances have materially changed since the granting of authorisation to the firm such that, if an application for authorisation was made at the relevant time, a different decision would be taken in relation to the application for authorisation;

 

 

 

(g) that the authorisation was obtained by providing statements or information known by the applicant for authorisation to be false or misleading;

 

 

 

(h) that the firm no longer complies with capital or other financial requirements, specified by the Bank from time to time;

 

 

 

(i) that the firm is not maintaining or is unlikely to be able to maintain adequate capital or other financial resources having regard to the volume and nature of its business;

 

 

 

(j) that the firm has become unable or is, in the opinion of the Bank, likely to become unable to meet its obligations to its creditors;

 

 

 

(k) that the firm is failing or has failed to comply to a material degree with a condition or requirement imposed by or under this Act;

 

 

 

(l) that the firm has suspended payments lawfully due;

 

 

 

(m) that the Bank considers that any director, manager or qualifying shareholder of the firm no longer complies with the conditions of competence and probity required by section 18;

 

 

 

(n) the firm has so organised itself that it, and any related undertaking or associated undertaking, either collectively or individually, is no longer capable of being regulated to the satisfaction of the Bank under this Act.

 

 

 

(3) The Bank may not revoke the authorisation of a member firm unless it has served notice on the firm of its proposal to revoke the authorisation. The notice must include a statement of the Bank's reasons for proposing to revoke the authorisation.

 

 

 

(4) If a member firm's authorisation is revoked, the firm and every person who was concerned in the management of the firm immediately before the revocation are jointly and severally responsible for ensuring the discharge of all undischarged contracts entered into by the firm before the authorisation was revoked, unless the Bank gives a direction in writing to the contrary.

 

 

 

(5) If the authorisation of a member firm is revoked and the firm is not insolvent, the following provisions apply:

 

 

 

(a) the firm and its members continue to have the obligations imposed by or under this Act, or by the rules of the approved stock exchange concerned, until all of its liabilities and other obligations have been discharged to the satisfaction of the Bank;

 

 

 

(b) the firm shall, as soon as possible after the revocation, notify the Bank, the members of the firm and such other persons as the Bank specifies of the measures being taken to discharge without delay the liabilities and other obligations of the firm.

 

 

 

(6) If—

 

 

 

(a) a former authorised member firm has not so notified the Bank in accordance with paragraph (b) of subsection (5), or

 

 

 

(b) a former authorised member firm has notified the Bank in accordance with that paragraph but the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

 

 

 

(c) a former authorised member firm has notified the Bank in accordance with that paragraph but the Bank is of the opinion that the firm has failed to take all reasonable steps to notify persons specified by the Bank under that paragraph,

 

 

 

the Bank may, by direction given in writing, prohibit the firm from doing all or any of the following without the prior authorisation of the Bank for such period, not exceeding six months, as is specified in the notice:

 

 

 

(i) creating liabilities;

 

 

 

(ii) dealing with, or disposing of, assets or specified assets of the firm, or of members of the firm, in any manner;

 

 

 

(iii) engaging in any kind of transaction, or in any specified transaction or class of transactions;

 

 

 

(iv) making payments to any person.

 

 

 

(7) If the Bank has given a direction under subsection (6), the Bank may further direct the former authorised member firm to prepare and submit to the Bank for its authorisation, within 2 months of the earlier direction, a scheme for the orderly discharge of the liabilities and other obligations of the firm.

 

 

 

(8) A former authorised member firm to which a direction has been given under this section shall comply with the direction. If the firm is a body (whether incorporate or unincorporated), each person who, immediately before the authorisation of the member firm was revoked, was concerned in the management of the firm, shall ensure that the former authorised member firm complies with the direction.

 

 

 

(9) If the authorisation of an authorised member firm is revoked and the firm is insolvent, the following provisions apply:

 

 

 

(a) a liquidator or receiver of the firm has, in addition to the obligations the liquidator or receiver has in respect of the winding-up, the same obligations as the firm would have had if it were a former authorised member firm to which subsection (5) of this section applies;

 

 

 

(b) despite paragraph (a) of this subsection, the Bank may, by notice in writing given to the firm, discharge the liquidator or receiver from complying with the obligations imposed by paragraph (b) of subsection (5) and impose on the liquidator or receiver such other obligations corresponding to those set out in that paragraph as the Bank considers appropriate.

 

 

 

(10) Nothing in subsection (9) affects any obligation under this Act of any of the members of the former authorised member firm concerned.

 

 

 

(11) Within 28 days after revoking the authorisation of an authorised member firm under this section, the Bank shall publish a notice of the revocation in Iris Oifigiúil and in at least one daily newspaper that circulates within the State.

 

 

 

(12) A member firm whose authorisation is revoked under this section shall cease to operate as an authorised member firm from the date on which it is notified of the revocation.

 

 

 

(13) The revocation of an authorisation by the Bank and the giving of a direction under this section are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(14) The Bank may not exercise its power under subsection (2)(m) in respect of an authorised member firm unless it has given the firm an opportunity to remove, within such period as the Bank specifies, the director or manager from office or otherwise deal with the concerns of the Bank in relation to the probity or competence of the person.

 

 

 

(15) For the purposes of this section, an authorised member firm is insolvent if—

 

 

 

(a) being a company, the company is being wound up, or

 

 

 

(b) being an unincorporated body of persons, the body is the subject of a dissolution order, or

 

 

 

(c) being a natural person, the person is adjudicated bankrupt.

 

 

 

(16) A person who fails to comply with subsection (8) or (12) commits an offence.”.

10.

Section 29

Substitute the following subsections for subsections (5) and (6):

 

 

“(5) A direction given under this section takes effect on a date specified by the Bank.

 

 

(6) A direction given under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

(6A) On hearing an appeal against such a direction under Part VIIA of the Central Bank Act 1942 , the Irish Financial Services Appeals Tribunal may hear evidence from creditors.”.

11.

Section 33

Substitute the following subsection for subsection (3):

 

 

“(3) A direction given by the Bank under subsection (2) that an approved stock exchange or authorised member firm shall not reappoint a person to the office of auditor is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 at the instance of that person.”.

12.

Section 37

Substitute the following section for section 37:

 

 

“Bank may disqualify officers and employees of stock exchanges and member firms in certain circumstances.

37.—(1) On becoming aware that the probity of a person who is an officer or employee of an approved stock exchange or authorised member firm is such so as to render the person unsuitable to be an officer or employee of an approved stock exchange or authorised member firm, the Bank may, by notice in writing given to the person and to the exchange or firm, direct the exchange or firm to remove the person from office or to dismiss the person from its employment.

(2) If the Bank becomes aware that a person who is an officer or employee of an approved stock exchange or authorised member firm is not competent in respect of matters of the kind with which the person would be concerned as an officer or employee of an approved stock exchange or an authorised member firm, the Bank may, by notice in writing given to the person and to the exchange or firm, direct the exchange or firm—

 

 

 

(a) in the case of an officer, to remove the person from office or to suspend the person from office for a specified period, or

 

 

 

(b) in the case of an employee, to dismiss the person from its employment or to remove the person from a particular sector of employment.

 

 

 

(3) An approved stock exchange, an authorised member firm or any other entity that the Bank supervises or regulates as part of its statutory functions shall not, without the written consent of the Bank, employ in any capacity a person knowing that the person is the subject of a direction given under this section.

 

 

 

(4) A direction under this section must specify the date on which it is to take effect.

 

 

 

(5) The Bank may consent to the employment of a person who is the subject of a direction given under this section. The consent may—

 

 

 

(a) relate to employment with any entity that the Bank supervises or regulates as part of its statutory functions generally or to employment of a particular kind, and

 

 

 

(b) be given subject to conditions or requirements or both, and

 

 

 

(c) be varied by the Bank from time to time.

 

 

 

(6) Any person who accepts or continues in employment in contravention of a direction given under this section commits an offence.

 

 

 

(7) A direction given by the Bank under this section and the refusal of the Bank to give consent under subsection (5) are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(8) The Bank may, by notice in writing given to the person concerned, revoke or vary a direction given under this section.”.

13.

Section 46

Substitute the following section for section 46:

 

 

“Decision of Bank with respect to acquiring transactions under section 40 to be appealable.

46.—The refusal of the Bank to approve an acquiring transaction in accordance with section 40 and the imposition of conditions or requirements on approving such a transaction are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .”.

14.

Section 70

In subsection (1)—

 

 

(a) substitute “14(15)” for “14(8)”, and

 

 

(b) substitute “24(16)” for “24(9)”, and

 

 

(c) substitute “37(3) and (6)” for “37(6)”.

15.

First Schedule

Substitute the following Schedule for the First Schedule:

 

 

 

“FIRST SCHEDULE

Section 29.

 

 

Supplementary Provisions in Relation to a Direction by the Bank under Section 29

 

 

Interpretation: First Schedule.

1. In this Schedule—

 

 

 

‘direction’ means a direction given by the Bank under section 29 of this Act;

 

 

 

‘stock exchange’ includes—

 

 

 

(a) a proposed stock exchange, and

 

 

 

(b) an approved stock exchange, and

 

 

 

(c) a former approved stock exchange, and

 

 

 

(d) directors and those responsible for the management of an approved stock exchange or former approved stock exchange;

 

 

 

‘member firm’ includes—

 

 

 

(a) a proposed member firm, and

 

 

 

(b) an authorised member firm, and

 

 

 

(c) a former authorised member firm, and

 

 

 

(d) directors and those responsible for the management of an authorised member firm or former authorised member firm.

 

 

Bank may revoke direction.

2. The Bank may revoke a direction unless the Irish Financial Services Appeals Tribunal has made an order in respect of the direction on the hearing of an appeal against the direction under Part VIIA of the Central Bank Act 1942 .

 

 

Effect of direction confirmed by Irish Financial Services Appeals Tribunal on appeal.

3. (1) A direction confirmed by the Irish Financial Services Appeals Tribunal on the determination of an appeal made by a stock exchange terminates—

 

 

(a) at the end of the period of operation specified by that Tribunal, or

 

 

(b) on that Tribunal making an order for quashing the direction, or

 

 

(c) on the making of a winding-up order in respect of the stock exchange, or

 

 

(d) on the making by that Tribunal of an order for termination where it considers that the circumstances that gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make the order,

 

 

 

whichever first occurs.

 

 

 

(2) A direction confirmed by the Irish Financial Services Appeals Tribunal on the determination of an appeal made by a member firm terminates—

 

 

 

(a) at the end of the period of operation specified by that Tribunal, or

 

 

 

(b) on that Tribunal making an order for quashing the direction, or

 

 

 

(c) if—

 

 

 

(i) the firm is a company, on the making of a winding-up order in respect of the firm, or

 

 

 

(ii) if the firm is an unincorporated body, on the making of a dissolution order in respect of the firm,

 

 

 

(d) on the making by that Tribunal of an order for termination where it considers that the circumstances that gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make the order,

 

 

 

whichever first occurs.

 

 

Bank may direct stock exchange or member firm to prepare scheme for termination of its business.

4. If the Bank considers that the stock exchange or member firm to which the direction was given is able to meet its obligations to its creditors, investors or clients but the circumstances that gave rise to the direction are unlikely to be rectified, it may, by notice in writing, direct the firm—

 

 

 

(a) to prepare, in consultation with the Bank, a scheme for the orderly termination of its business and the discharge of its liabilities to its creditors, investors and clients under the supervision of the Bank, and

 

 

 

(b) to submit the scheme to the Bank for approval within 2 months after the giving of the notice.

 

 

Stock Exchange or member firm may appeal against direction of Bank.

5. A direction given by the Bank under this Schedule is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

Consequences of failing to comply with direction of Bank.

6. (1) If a stock exchange or a member firm—

 

 

(a) fails to comply with a direction given by the Bank under this Schedule, or

 

 

 

(b) fails to comply with the terms of a scheme prepared and submitted by the firm and approved by the authority,

 

 

 

the Bank may apply to the Court for an order under subparagraph (2).

 

 

 

(2) On the hearing of an application made under subparagraph (1), the Court may make—

 

 

 

(a) in the case of a stock exchange, an order for the winding-up of the exchange on the ground that it is just and equitable that it should be wound up, or

 

 

 

(b) in the case of a member firm that is a company, an order for the winding-up of the firm on the ground that it is just and equitable that it should be wound up, or

 

 

 

(c) in the case of a member firm that is an unincorporated body, an order for the dissolution of the firm on the grounds that it is just and equitable that the firm should be dissolved.

 

 

Bank may revoke or amend direction.

7. The Bank may, by notice in writing given to the stock exchange or member firm concerned, revoke or vary a requirement imposed by it under this Schedule.

 

 

Obligation of stock exchange or member firm when given a direction under section 29.

8. (1) On being given a direction—

 

 

(a) the stock exchange or member firm concerned shall take all necessary steps to ensure that its assets, or its client or investor assets wherever held, are not depleted without the prior authorisation of the Bank, and

 

 

 

(b) the Bank may direct—

 

 

 

(i) a credit institution or any institution exempted under section 7 of the Central Bank Act 1971 , or

 

 

 

(ii) any other financial institution that holds an account of any description of the firm (including holdings of investment instruments of the firm to which the direction has been given),

 

 

 

to cease making payments from, or entering into other transactions in respect of, the account without the prior authorisation of the Bank.

 

 

 

(2) An institution to which a direction is given under subparagraph (1)(b) shall comply with the direction within such period as is specified in the direction.”.

 

PART 5

Amendment of Investment Intermediaries Act 1995

Item

Provision affected

Amendment

1.

Section 10

Substitute the following subsections for subsection (3):

 

 

“(3) If a supervisory authority refuses to grant authorisation to a proposed investment business firm under this section, it shall serve notice on the proposed investment business firm of its intention to refuse to authorise it. The notice must include a statement setting out the reasons for the refusal.

 

 

(3A) A decision of a supervisory authority refusing to grant authorisation to a proposed investment business firm under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

2.

Section 12

Substitute the following subsections for subsection (3):

 

 

“(3) If the supervisory authority acting as a competent authority fails or refuses to communicate the information in the manner referred to in subsection (2), it shall give reasons for the failure or refusal to the authorised investment business.

 

 

(3A) A failure or refusal of a supervisory authority to communicate the information in the manner referred to in subsection (2) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

3.

Section 13

Substitute the following subsection for subsections (3) and (4):

 

 

“(3) A decision of the supervisory authority imposing a condition or requirement under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

4.

Section 13A (as inserted by section 17 of the Insurance Act 2000 )

Substitute the following subsection for subsections (4) and (5):

 

“(4) A decision of the supervisory authority imposing a condition or requirement under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

5.

Section 14

Substitute the following subsection for subsection (3):

 

 

“(3) A decision of the supervisory authority imposing a condition or requirement under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

6.

Section 15

Substitute the following subsections for subsection (2):

 

 

“(2) If a supervisory authority refuses to consent to an amendment of or addition to the memorandum of association, or articles of association, of an authorised investment business firm, it shall serve notice on the authorised investment business firm concerned stating that it refuses to consent to the amendment or addition. The notice must set out the reasons for the refusal.

 

 

(3) A refusal by the supervisory authority to consent to an amendment of or addition to the memorandum of association, or articles of association, of an authorised investment business firm is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

7.

Section 16

Substitute the following section for section 16:

 

 

“Supervisory authority may revoke authorisation in certain circumstances.

16.—(1) A supervisory authority may revoke the authorisation of an authorised investment business firm on a request being made to it by or on behalf of the firm.

(2) A supervisory authority may also revoke the authorisation of an authorised investment business firm on the following grounds:

 

 

 

(a) that the firm has failed to operate as an investment business firm within 12 months of the date on which it was authorised under this Act;

 

 

 

(b) that the firm has failed to operate as an investment business firm for a period of more than six months;

 

 

 

(c) that the firm is being wound up;

 

 

 

(d) that it is expedient to do so in the interests of the proper and orderly regulation and supervision of investment business firms or in order to protect investors or in any or all of these circumstances;

 

 

 

(e) that the firm has been convicted on indictment of an offence under this Act or any other designated enactment or designated statutory instrument, or any offence involving fraud, dishonesty or breach of trust;

 

 

 

(f) that circumstances have materially changed since the granting of the authorisation such that, if an application for authorisation were made at the relevant time, it is likely that the supervisory authority would have made a different decision with respect to the application for authorisation;

 

 

 

(g) that the authorisation was obtained by making statements, or providing information, that the applicant for authorisation knew or ought to have known were false or misleading;

 

 

 

(h) that the firm has systematically failed to comply with a condition or requirement of this Act, or has failed to comply to a material degree with a condition or requirement of this Act;

 

 

 

(i) that the firm no longer fulfils conditions or requirements that were imposed either when the firm's authorisation was granted or at a later time;

 

 

 

(j) that the firm no longer complies with capital or any other financial requirements specified by the supervisory authority from time to time;

 

 

 

(k) that the firm is not maintaining, or is unlikely to be able to maintain, adequate capital resources or other financial resources having regard to the nature and volume of its business;

 

 

 

(l) that the firm has become unable or, in the opinion of the supervisory authority, is likely to become unable, to meet its obligations to its creditors;

 

 

 

(m) that the firm has suspended payments lawfully due;

 

 

 

(n) that the firm has contravened to a material degree a code of conduct or rules of conduct specified in or set out under section 37;

 

 

 

(o) that a director, manager or qualifying shareholder of a person who is an authorised investment business firm, or is deemed by section 26 or 63 to be such a firm, no longer satisfies the supervisory authority as to the matters specified in paragraphs (d) and (e) of section 10(5);

 

 

 

(p) that the firm has failed to comply with a condition, requirement or direction imposed under this Act and the supervisory authority is of the opinion that the stability and soundness of the firm is or has been materially affected by the failure;

 

 

 

(q) that the firm has so organised its business or corporate structure that it and, where appropriate, any related undertaking or associated undertaking, either collectively or individually, are no longer capable of being regulated under this Act to the satisfaction of the supervisory authority.

 

 

 

(3) The supervisory authority may not revoke the authorisation of an authorised investment business firm under subsection (2) unless it has served a notice on the firm of its intention to do so. The notice must set out the grounds on which it is proposed to revoke the authorisation.

 

 

 

(4) If an investment firm's authorisation is revoked, the firm and every person who was concerned in the management of the firm immediately before the revocation are jointly and severally responsible for ensuring the discharge of all undischarged contracts entered into by the firm before the authorisation was revoked, unless the Bank gives a direction in writing to the contrary.

 

 

 

(5) If the authorisation of an authorised investment business firm is revoked and the firm is not insolvent, the following provisions apply:

 

 

 

(a) the firm continues to be subject to the obligations imposed by this Act and any codes of conduct or rules of conduct or client money requirements or any other conditions or requirements imposed by the supervisory authority under this Act until all the liabilities and other obligations of the firm have been discharged to the satisfaction of that authority;

 

 

 

(b) as soon as practicable after the revocation, the firm shall notify the supervisory authority and such other persons (if any) as that authority specifies of the measures being taken to discharge without delay the liabilities and other obligations of the firm.

 

 

 

(6) If the authorisation of an authorised investment business firm is revoked and the firm is not insolvent and—

 

 

 

(a) the firm has not notified the supervisory authority in accordance with paragraph (b) of subsection (5), or

 

 

 

(b) the firm has notified the supervisory authority in accordance with that paragraph but that authority is of the opinion that the measures being taken or proposed to be taken for the purposes of this section are unsatisfactory, or

 

 

 

(c) the firm has notified the supervisory authority in accordance with that paragraph but that authority is of the opinion that the firm has failed to take all reasonable steps to notify persons that that authority has specified in accordance with that paragraph,

 

 

 

that authority may, by direction given in writing, prohibit the firm from doing all or any of the following without the prior authorisation of that authority for such period, not exceeding 6 months, as is specified in the direction:

 

 

 

(i) creating liabilities;

 

 

 

(ii) dealing with, or disposing of, assets or specified assets of the firm in any manner;

 

 

 

(iii) engaging in any kind of transaction or any specified transaction or class of transaction;

 

 

 

(iv) paying money to any person or to any specified person or class of persons.

 

 

 

(7) If the supervisory authority has given a direction under subsection (6), it may further direct the former authorised investment business firm to prepare and submit to that authority for its approval, within 2 months of the earlier direction, a scheme for the orderly discharge of the liabilities and other obligations of the firm.

 

 

 

(8) A former authorised investment business firm to which a direction has been given under this section shall comply with the direction. If the firm is a body (whether incorporate or unincorporated), each person who, immediately before the authorisation of the member firm was revoked, was concerned in the management of the firm, shall ensure that the former authorised investment business firm complies with the direction.

 

 

 

(9) If the authorisation of an investment business firm is revoked and the firm is insolvent, the following provisions apply:

 

 

 

(a) the liquidator, official assignee or receiver of the firm has, in addition to any other obligations in respect of the winding-up, dissolution or bankruptcy, the same obligations as those that the firm would have if it were an authorised investment business firm to which subsection (5) applies;

 

 

 

(b) the liquidator, official assignee or receiver are also subject to any conditions or requirements imposed under this Act as if the liquidator, official assignee or receiver were an authorised investment business firm; and

 

 

 

(c) despite paragraph (a) of this subsection, the supervisory authority may, by notice in writing given to the body, discharge the liquidator, receiver or official assignee from complying with the obligations imposed by paragraph (b) of subsection (5) and impose on the liquidator, receiver or official assignee such other obligations corresponding to those set out in that paragraph as that authority considers appropriate.

 

 

 

(10) Within 28 days after the authorisation of an authorised investment business firm is revoked under this section, the supervisory authority shall publish a notice of the revocation in Iris Oifigiúil and in at least one daily newspaper that circulates within the State.

 

 

 

(11) After the revocation of the authorisation of an authorised investment business firm, the firm shall cease to operate as such a firm.

 

 

 

(12) The supervisory authority shall not revoke an authorisation of an authorised investment business firm on the ground set out in subsection (2)(o), unless it has given the firm an opportunity to remove the director, manager or qualifying shareholder, or otherwise deal with the concerns of that authority as regards the probity or competence of the person concerned, within such period as that authority specifies.

 

 

 

(12A) A decision of the supervisory authority to revoke an authorisation under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(13) For the purposes of this section, an investment business firm is insolvent if—

 

 

 

(a) being a company, the company is being wound up, or

 

 

 

(b) being an unincorporated body of persons, the body is the subject of a dissolution order, or

 

 

 

(c) being a natural person, the person is adjudicated bankrupt.

 

 

 

(14) A person who fails to comply with subsection (8) or (11) commits an offence.”.

8.

Section 21

(a) Substitute the following subsections for subsections (5) and (6):

 

 

 

“(5) A direction given under this section takes effect on a date specified by the Bank.

 

 

 

(6) A direction given under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(6A) On hearing an appeal against such a direction under Part VIIA of the Central Bank Act 1942 , the Irish Financial Services Appeals Tribunal may hear evidence from creditors.”.

 

 

(b) Insert the following subsection after subsection (9):

 

 

 

“(10) A person who, without reasonable excuse, fails to comply with a direction given to the person under this section commits an offence.”.

9.

Section 32

Substitute the following subsection for subsection (3):

 

 

“(3) A direction given by the supervisory authority under subsection (2) that an authorised investment business firm may not re-appoint a person to the office of auditor is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

10.

Section 45

Substitute the following section for section 45:

 

 

“Appeals to Irish Financial Services Appeals Tribunal.

45.—A decision of a supervisory authority—

 

 

(a) refusing to approve an acquiring transaction in accordance with section 39, or

 

 

 

(b) approving such a transaction subject to conditions or requirements,

 

 

 

is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

11.

Section 57

Substitute the following subsection for subsections (4) and (5):

 

 

“(4) The imposition of a condition or requirement, or the giving of any direction under this section, is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 at the instance of the approved professional body concerned.”.

12.

Section 58

Substitute the following subsection for subsection (3):

 

 

“(3) The imposition of a condition or requirement imposed under subsection (1) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

13.

Section 61

Substitute the following section for section 61:

 

 

“Bank may revoke approval of professional body.

61.—(1) The Bank may revoke the approval of an approved professional body on a request made to it by or on behalf of the body.

(2) The Bank may also revoke the approval of an approved professional body on any of the following grounds:

 

 

 

(a) that the body has failed to operate as an approved professional body within 12 months of the date on which the approval was granted;

 

 

 

(b) that the body has failed to operate as an approved professional body for a period of more than 6 months;

 

 

 

(c) that the body is being wound up;

 

 

 

(d) that it is expedient to revoke the approval in the interest of the proper and orderly regulation of approved professional bodies or certified persons or in order to protect investors;

 

 

 

(e) that the body has been convicted on indictment of an offence under this Act or any other designated enactment or designated statutory instrument, or an offence involving fraud, dishonesty or breach of trust;

 

 

 

(f) that circumstances have materially changed since the granting of approval to the body such that, if an application for approval was made at the relevant time, a different decision would be taken in relation to the application for approval;

 

 

 

(g) that the approval was obtained by providing statements or information known by the applicant for approval to be false or misleading;

 

 

 

(h) that the body has failed to comply to a material degree with a requirement of this Act;

 

 

 

(i) that the body has failed to comply with a condition or requirement that was imposed when approval was granted or was imposed later;

 

 

 

(j) that the body has become unable or is, in the opinion of the Bank, likely to become unable to meet its obligations to its creditors;

 

 

 

(k) that the body has suspended payments lawfully due;

 

 

 

(l) that the Bank considers that any director or manager of the body who is primarily concerned with the regulation of certified persons no longer complies with the conditions of competence and probity required by section 56;

 

 

 

(m) that the body has so organised itself that it, and any related undertaking or associated undertaking, either collectively or individually, is no longer capable of being regulated to the satisfaction of the Bank under this Act.

 

 

 

(3) The Bank may not revoke the approval of a professional body unless it has served notice on the body of its proposal to revoke the approval. The notice must include a statement of the Bank's reasons for proposing to revoke the authorisation.

 

 

 

(4) If the approval of a professional body is revoked and the body is not a company that is being wound up, the following provisions apply:

 

 

 

(a) the body and its members continue to have the obligations imposed by this Act until all of its liabilities and other obligations have been discharged to the satisfaction of the Bank;

 

 

 

(b) the body shall, as soon as possible after the revocation, notify the Bank, the members of the body and such other persons as the Bank specifies of the measures being taken to discharge without delay the liabilities and other obligations of the body.

 

 

 

(5) If—

 

 

 

(a) a former approved professional body has not notified the Bank in accordance with paragraph (b) of subsection (4), or

 

 

 

(b) a former approved professional body has notified the Bank in accordance with that paragraph and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

 

 

 

(c) a former approved professional body has notified the Bank in accordance with that paragraph but the Bank is of the opinion that the body has failed to take all reasonable steps to notify persons specified by the Bank under that paragraph,

 

 

 

the Bank may, by direction given in writing, prohibit the body from doing all or any of the following without the prior authorisation of the Bank for such period, not exceeding six months, as is specified in the notice:

 

 

 

(d) creating liabilities;

 

 

 

(e) dealing with, or disposing of, assets or specified assets of the body, or of members of the body, in any manner;

 

 

 

(f) engaging in any kind of transaction, or in any specified transaction or class of transactions;

 

 

 

(g) making payments to any person.

 

 

 

(6) If the Bank has given a direction under subsection (5), the Bank may further direct the former approved professional body to prepare and submit to the Bank for its approval, within 2 months of the earlier direction, a scheme for the orderly discharge of the liabilities and other obligations of the body.

 

 

 

(7) A former approved professional body shall comply with a direction given to it under this section. Each person who, immediately before the approval of the body was revoked, was concerned in the management of the body, shall ensure that the body complies with the direction.

 

 

 

(8) If the approval of an approved professional body is revoked and the body is a company that is being wound up, the following provisions apply:

 

 

 

(a) the liquidator of the body has, in addition to the liquidator's obligations in respect of the winding-up, the same obligations as the body would have had if it were a former approved professional body to which subsection (4) applies;

 

 

 

(b) despite paragraph (a) of this subsection, the Bank may, by notice in writing given to the body, discharge the liquidator from complying with the obligations imposed by paragraph (b) of subsection (4) and impose on the liquidator such other obligations corresponding to those set out in that paragraph as the Bank considers appropriate.

 

 

 

(9) Nothing in subsection (8) affects any obligation under this Act of any of the members of the former approved professional body concerned.

 

 

 

(10) Within 28 days after revoking the approval of a professional body under this section, the Bank shall publish a notice of the revocation in Iris Oifigiúil and in at least one daily newspaper that circulates within the State.

 

 

 

(11) A professional body whose approval is revoked under this section shall cease to operate as an approved professional body from the date on which it is notified of the revocation.

 

 

 

(12) The revocation of an approval by the Bank and the giving of a direction under this section are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(13) The Bank may not exercise its power under subsection (2)(l) in respect of an approved professional body unless it has given the body an opportunity to remove the director or manager from office or otherwise deal with the concerns of the Bank in relation to the probity or competence of the person within such period as the Bank specifies.

 

 

 

(14) A person who fails to comply with subsection (7) or (11) commits an offence.”.

14.

First Schedule

Substitute the following Schedule for the First Schedule:

 

 

“FIRST SCHEDULE                       Section 21.

 

 

Supplementary Provisions in Relation to a Direction by Supervisory Authority under Section 21 of this Act

 

 

Interpretation: First Schedule.

1. In this Schedule—

 

 

 

‘direction’ means a direction given by a supervisory authority under section 21 of this Act;

 

 

 

‘investment business firm’ includes—

 

 

 

(a) a proposed investment business firm, and

 

 

 

(b) an authorised investment business firm, and

 

 

 

(c) a former authorised investment business firm, and

 

 

 

(d) a person who the supervisory authority has reasonable grounds to believe is acting as an investment business firm, and

 

 

 

(e) an associated undertaking or related undertaking, and

 

 

 

(f) directors and those responsible for managing an investment business firm.

 

 

Supervisory authority may revoke direction.

2. A supervisory authority may revoke a direction unless the Irish Financial Services Appeals Tribunal has made an order in respect of the direction on the hearing of an appeal against the direction under Part VIIA of the Central Bank Act 1942 .

 

 

Effect of direction confirmed by Irish Financial Services Appeals Tribunal on appeal.

3. A direction confirmed by the Irish Financial Services Appeals Tribunal on the hearing of an appeal against the direction under Part VIIA of the Central Bank Act 1942 terminates—

 

 

(a) at the end of the period of operation specified by that Tribunal, or

 

 

 

(b) on that Tribunal making an order for quashing the direction, or

 

 

 

(c) on the making of—

 

 

 

(i) if the investment business firm is a company, a winding-up order in respect of the investment business firm, or

 

 

 

(ii) if the firm is an unincorporated body, a dissolution order in respect of the firm, or

 

 

 

(iii) if the firm is a sole trader, an adjudication of bankruptcy in respect of the trader,

 

 

 

(d) on the making by that Tribunal of an order for termination where it considers on the hearing of an appeal against the direction under Part VIIA of the Central Bank Act 1942 that the circumstances that gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make the order,

 

 

 

whichever first occurs.

 

 

Supervisory authority may require investment business firm to prepare scheme for termination of its business.

4. If a supervisory authority considers that the investment business firm to which the direction was given is able to meet its obligations to its creditors, investors or clients but the circumstances that gave rise to the direction are unlikely to be rectified, it may, by notice in writing, require the firm—

(a) to prepare, in consultation with the authority, a scheme for the orderly termination of its business and the discharge of its liabilities to its creditors, investors and clients under the supervision of the supervisory authority, and

 

 

 

(b) to submit the scheme to the authority for its approval within 2 months after the giving of the notice.

 

 

Investment business firm may appeal against decision of supervisory authority.

5. A requirement made under paragraph 4 is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

Consequences of failing to comply with direction of supervisory authority.

6. (1) If the investment business firm—

 

 

(a) fails to comply with a requirement made by the supervisory authority under paragraph 4, or

 

 

 

(b) fails to comply with the terms of a scheme prepared and submitted by the firm and approved by the authority,

 

 

 

the supervisory authority may apply to the Court for an order under subparagraph (2).

 

 

 

(2) On the hearing of an application made under subparagraph (1), the Court may make such of the following orders as is appropriate:

 

 

 

(a) if the investment business firm is a company, an order for the winding-up of the company on the grounds that it is just and equitable that the company should be wound up;

 

 

 

(b) if the investment business firm is an unincorporated body, an order for the dissolution of the firm on the grounds that it is just and equitable that the firm should be dissolved;

 

 

 

(c) if the investment business firm is a sole trader, an order that proceedings in bankruptcy be commenced, on the grounds that it is just and equitable that the trader should cease trading.

 

 

Supervisory authority may revoke or amend direction.

7. The supervisory authority may at any time revoke or amend a requirement made by it under paragraph 4.

 

 

Obligations of investment business firm when given a direction under this Schedule.

8. (1) On being given a direction—

 

 

(a) the investment business firm concerned shall take all necessary steps to ensure that its assets, or its client or investor assets wherever held, are not depleted without the prior authorisation of the supervisory authority, and

 

 

 

(b) the supervisory authority may direct—

 

 

 

(i) a credit institution or any institution exempted under section 7 of the Central Bank Act 1971 , or

 

 

 

(ii) any other financial institution that holds an account of any description of the firm (including holdings of investment instruments of the firm to which the direction has been given),

 

 

 

to cease making payments from, or entering into other transactions in respect of, the account without the prior authorisation of that authority.

 

 

 

(2) A direction given under subparagraph (1)(b) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

 

(3) An institution that, without reasonable excuse, fails to comply with a direction given under subparagraph (1)(b) commits an offence.”.

 

PART 6

Amendment of Consumer Credit Act 1995

Item

Provision affected

Amendment

1.

Section 93

Substitute the following subsections for subsections (13) to (19):

 

 

“(13) If, having considered any representations that may have been made under subsection (12), the Bank decides to refuse to grant a licence, it shall, by notice in writing, inform the applicant of the decision. The notice must specify the grounds for the decision.

 

 

(14) If, having considered any representations that may have been made under subsection (12), the Bank decides to suspend or revoke a moneylender's licence, or to vary any term or condition of such a licence, it shall notify the decision to the holder of the licence, together with the grounds for the decision.

 

 

(15) The Bank shall deliver a notice referred to in subsection (13) or (14) personally or send it by prepaid registered post to the business address of the applicant for an authorisation or the holder of the authorisation concerned, as the case requires.

 

 

(16) The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

 

 

(a) a decision to refuse to grant a moneylender's licence;

 

 

(b) a decision suspending or revoking such a licence;

 

 

(c) a decision varying any term or condition of such a licence.

 

 

(17) If a notice under this section relates to a decision of the Bank—

 

 

(a) suspending or revoking a moneylender's licence, or

 

 

(b) varying the terms or conditions of such a licence,

 

 

the decision takes effect at the end of the period allowed for appealing against the decision under Part VIIA of the Central Bank Act 1942 unless an appeal against the decision is lodged under that Part within that period.

 

 

(18) If an appeal is lodged under Part VIIA of the Central Bank Act 1942 by a holder of a moneylender's licence against a decision of the Bank—

 

 

(a) suspending or revoking such a licence, or

 

 

(b) varying the terms or conditions of such a licence,

 

 

the decision does not take effect unless it is confirmed by the Irish Financial Services Appeals Tribunal or the appeal is withdrawn.”.

2.

Section 116

Substitute the following subsections for subsections (13) to (20):

 

 

“(13) If, having considered any representations that may have been made under subsection (12), the Bank decides to refuse to grant an authorisation, it shall, by notice in writing, inform the applicant of the decision. The notice must specify the grounds for the decision.

 

 

(14) If, having considered any representations that may have been made under subsection (12), the Bank decides to suspend or revoke an authorisation, or to vary any term or condition of an authorisation, it shall notify the decision to the holder of the authorisation, together with the grounds for the decision.

 

 

(15) The Bank shall deliver a notice referred to in subsection (13) or (14) personally or send it by prepaid registered post to the business address of the applicant for an authorisation or the holder of the authorisation concerned, as the case requires.

 

 

(16) The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

 

 

(a) a decision to refuse to grant an authorisation;

 

 

(b) a decision suspending or revoking an authorisation;

 

 

(c) a decision varying any term or condition of an authorisation.

 

 

(17) If a notice under this section relates to a decision of the Bank—

 

 

(a) suspending or revoking an authorisation, or

 

 

(b) varying the terms or conditions of an authorisation,

 

 

the decision takes effect at the end of the period allowed for appealing against the decision under Part VIIA of the Central Bank Act 1942 unless an appeal against the decision is lodged under that Part within that period.

 

 

(18) If an appeal is lodged under Part VIIA of the Central Bank Act 1942 by a holder of an authorisation against a decision of the Bank—

 

 

(a) suspending or revoking an authorisation, or

 

 

(b) varying the terms or conditions of an authorisation,

 

 

the decision does not take effect unless it is confirmed by the Irish Financial Services Appeals Tribunal or the appeal is withdrawn.

 

 

(19) In this section, ‘authorisation’ means a mortgage intermediaries authorisation.”.

 

PART 7

Amendment of Credit Union Act 1997

Item

Provision inserted

Amendment

1.

Section 8

Substitute the following subsections for subsections (3) and (4):

 

 

“(3) If the Bank refuses to register as a credit union a society that has made an application for registration, it shall, by notice in writing, inform the society of the refusal. The notice must include a statement setting out the grounds for the refusal.

 

 

(4) A decision of the Bank refusing to register a society as a credit union is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

2.

Section 11

Substitute the following subsection for subsection (3):

 

 

“(3) A decision of the Bank declining to give its approval under subsection (2)(b) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

3.

Section 14

Substitute the following subsections for subsection (5):

 

 

“(5) If the Bank is not satisfied that an amendment of a credit union's rules sent to it under subsection (2) is not contrary to the provisions of this Act, it shall refuse to register the amendment, in which case it shall give the credit union a notice of its refusal to register the amendment. The notice must include a statement setting out the grounds for the refusal.

 

 

(5A) A decision of the Bank refusing to register an amendment of a credit union's rules under subsection (5) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

4.

Section 52

Substitute the following section for section 52:

 

 

“Appeal against certain decisions of Bank.

52.—The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

(a) a decision of the Bank under section 49(3)(b) to refuse to grant approval;

 

 

 

(b) a decision of the Bank under section 50(3)(a) to withdraw an approval granted under section 49;

 

 

 

(c) a decision of the Bank under section 50(3)(b) to vary any condition imposed on such an approval;

 

 

 

(d) a decision to impose any condition on such an approval (whether at the time the approval is granted or later by virtue of section 50 (3)(c)).”.

5.

Section 96

Substitute the following subsections for subsections (2) to (7):

 

 

“(2) The removal or suspension from office by the Bank of a director or member of the Supervisory Committee of a credit union under subsection (1) is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

(3) If a director or member of the Supervisory Committee of a credit union is removed by the Bank under this section or if, on the hearing of an appeal against the removal, the removal is confirmed by the Irish Financial Services Appeals Tribunal under Part VIIA of the Central Bank Act 1942 , the vacancy caused by the removal shall be treated as a casual vacancy.

 

 

(4) A director or member of the Supervisory Committee of a credit union who is removed from office under this section is, for 5 years from the date when the removal takes effect, disqualified from holding office as an officer, auditor or voluntary assistant of a credit union.

 

 

(5) If a director or member of the Supervisory Committee of a credit union is suspended under this section, the remaining directors or members of the Supervisory Committee constitute the board of directors or the Supervisory Committee.

 

 

(6) No claim lies against the Bank, the Minister or the State for any loss of office arising directly or indirectly from any of the provisions of this section.”.

6.

Section 97

Substitute the following subsection for subsection (3):

 

 

“(3) The Bank shall not cancel the registration of a credit union otherwise than—

 

 

(a) at its own request, or

 

 

(b) under subsection (2),

 

 

unless it has given the credit union at least 2 months' notice in writing specifying the ground on which it is proposed to cancel that registration.”.

7.

Section 99

Substitute the following section for section 99:

 

 

“Appeals against cancellation or suspension.

99.—(1) The following decisions are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

(a) a decision of the Bank under section 97(3) or section 98(3) proposing to cancel or suspend the registration of a credit union;

 

 

 

(b) a decision of the Bank under section 98(1)(b) renewing the suspension of the registration of a credit union so that the suspension extends beyond 3 months from when the suspension began.

 

 

 

(2) A decision cancelling the registration of a credit union does not take effect until—

 

 

 

(a) the end of the period within which an appeal against the decision may be lodged under Part VIIA of the Central Bank Act 1942 , or

 

 

 

(b) if an appeal is lodged against the decision within that period—

 

 

 

(i) the confirmation of the decision by the Irish Financial Services Appeals Tribunal on the hearing of the appeal, or

 

 

 

(ii) the withdrawal of the appeal,

 

 

 

whichever first occurs.”.

8.

Fourth Schedule

Substitute the following Schedule for the Fourth Schedule:

 

 

“FOURTH SCHEDULE                                      Section 88.

 

 

Supplementary Provisions in Relation to Regulatory Directions

 

 

When a regulatory direction terminates.

1. A regulatory direction terminates—

 

 

(a) at the end of the period of operation specified in the direction, or

 

 

 

(b) if an appeal is lodged against the direction under Part VIIA of the Central Bank Act 1942 and the period is varied by the Irish Financial Services Appeals Tribunal on the hearing of the appeal, at the end of the period specified in the direction as so varied, or

 

 

 

(c) on the making by the Court of a winding-up order in respect of the credit union,

 

 

 

whichever first occurs.

 

 

Bank may require credit union to prepare scheme for the orderly termination of its business.

2. (1) On forming the opinion that a credit union to which a regulatory direction was given is able to meet its obligations to its members and creditors but the circumstances that gave rise to the direction are unlikely to be rectified, the Bank may, by notice in writing given to the credit union, require the credit union—

 

 

 

(a) to prepare, in consultation with the Bank, a scheme for the orderly termination of its business and the discharge of its liabilities to its members and creditors under the supervision of the Bank; and

 

 

 

(b) to submit that scheme to the Bank for its approval.

 

 

 

(2) A credit union shall comply with a direction made to it under subparagraph (1) not later than 2 months after the requirement was notified to it under that subparagraph.

 

 

 

(3) A requirement made to a credit union under this paragraph is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

Consequences of failing to comply with requirement made under paragraph 2.

3. If a credit union fails to comply with a requirement made under paragraph 2 or fails to implement a scheme approved by the Bank, the Court may, on the application of the Bank, make an order for the winding-up of the credit union on the ground that it is just and equitable that it be wound up or such other order as it considers appropriate in the circumstances.

 

 

Court may revoke or amend order made under paragraph 3.

4. The Court may by order revoke or amend an order made by it under paragraph 3.

 

 

What action may be taken when regulatory direction is in force.

5. If a regulatory direction is in force in respect of a credit union, the following provisions apply:

 

 

(a) the credit union shall take all necessary steps to ensure that its assets, wherever held, are depleted only in accordance with the approval of the Bank;

 

 

 

(b) the Court may, on the application of the Bank, make an order directing a bank, or any institution exempt under section 7 of the Central Bank Act 1971 , that holds an account of the credit union to suspend the making of payments from the account for such period as the Court may consider appropriate in the circumstances;

 

 

 

(c) the credit union shall make reasonable arrangements for using its funds to meet applications (duly made in accordance with its rules) by members for repayment of money subscribed or deposited by them;

 

 

 

(d) if it appears to the Bank that the credit union has been applying an undue proportion of its funds in making loans, in preference to making such arrangements as are referred to in paragraph (c), the Bank may, after giving notice to the credit union and giving it an opportunity of making representations, apply to the Court for the winding-up of the credit union.”.

9.

Fifth Schedule

Repeal the Schedule.

 

PART 8

Amendment of Investor Compensation Act 1998

Item

Provision affected

Amendment

1.

Section 25

Substitute the following subsection for subsection (7):

 

 

“(7) A refusal by the supervisory authority to approve a compensation scheme in accordance with this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

2.

Section 26

Substitute the following section for section 26:

 

 

“Revocation of approval of compensation scheme.

26.—(1) The supervisory authority may, following consultation with the Company, revoke the approval of a compensation scheme if—

(a) that authority considers that the operator of the compensation scheme is not complying or has not complied with conditions or requirements imposed by it under section 25, or

 

 

 

(b) conditions have materially changed since the granting of the approval such that, if an application for approval were made at the relevant time, a different decision would be taken in relation to the application for approval.

 

 

 

(2) A decision of the supervisory authority revoking the approval of a compensation scheme is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .”.

3.

Section 28

Substitute the following section for section 28:

 

 

“Direction under section 27 to be appealable.

28.—(1) A direction given under section 27 is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

(2) On hearing an appeal against a direction given under section 27, the Irish Financial Services Appeals Tribunal may—

 

 

 

(a) hear evidence from creditors, and

 

 

 

(b) make such interim or interlocutory order, if any, as it thinks appropriate.

 

 

 

(3) While a direction made under section 27 is in force in relation to an investment firm, the following provisions apply:

 

 

 

(a) if the firm is a body corporate, winding-up proceedings may be commenced, and a resolution for winding-up may be passed, in relation to the firm only with the prior sanction of the Court;

 

 

 

(b) if the firm is an unincorporated body, proceedings for an order of dissolution may be commenced only with the prior sanction of the Court;

 

 

 

(c) if the firm is a sole trader, bankruptcy proceedings may be commenced only with the prior sanction of the Court;

 

 

 

(d) a receiver may be appointed over any of the assets of the firm, and those assets may be attached, sequestered or otherwise distrained only with the prior sanction of the Court.

 

 

 

(4) The Court may hear the whole or any part of proceedings under this section otherwise than in public.

 

 

 

(5) A creditor who is affected by a direction under section 27(3) may apply to the Court to vary or set aside that direction where it affects the interests of the creditor to a material degree.

 

 

 

(6) If an investment firm that is an authorised investment firm for the purposes of the Act of 1995 fails to comply with a direction given under section 27, the supervisory authority may revoke the authorisation of the investment firm in accordance with that Act.

 

 

 

(7) If an investment firm that is an authorised member firm for the purposes of the Stock Exchange Act 1995 fails to comply with a direction given under section 27, the supervisory authority may revoke the authorisation of the firm in accordance with that Act.

 

 

 

(8) If an investment firm that is a credit institution fails to comply with a direction given under section 27, the Bank shall amend the authorisation of the credit institution under Council Directive No. 77/780/EEC of 12 December 1977 and Council Directive No. 89/646/EEC of 15 December 1989 so that the authorisation of the credit institution no longer permits the provision of investment services listed in the Annex to the Investment Services Directive and shall so inform the credit institution immediately.

 

 

 

(9) If an investment firm that is an insurance intermediary fails to comply with a direction given under section 27, the supervisory authority shall inform the Company and the investment firm that the firm has failed to comply with its obligations under this Act.

 

 

 

(10) If an investment firm referred to in subsection (6), (7) or (8) is subject to the Investor Compensation Directive, the supervisory authority shall give not less than 12 months notice to the firm of its intention to take action against the investment firm under the relevant subsection.”.

4.

Section 31

Substitute the following subsections for subsections (2) and (3):

 

 

“(2) A determination made by the supervisory authority in accordance with this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

(3) Such a determination does not take effect until—

 

 

(a) the end of the period within which an appeal against the determination may be lodged under Part VIIA of the Central Bank Act 1942 , or

 

 

(b) if an appeal is lodged against the determination within that period—

 

 

(i) the confirmation of the determination by the Irish Financial Services Appeals Tribunal on the hearing of the appeal, or

 

 

(ii) the withdrawal of the appeal,

 

 

whichever first occurs.”.

5.

Second Schedule

Substitute the following Schedule for the Second Schedule:

 

 

“SECOND SCHEDULE                              Section 28.

 

 

Supplementary Provision in Relation to a Direction by a Supervisory Authority under Section 27

 

 

Interpretation: Second Schedule.

1. In this Schedule—

 

 

‘direction’ means a direction given under section 27;

 

 

‘investment firm’ includes every director or other person who has responsibility for managing an investment firm.

 

 

When a direction is to terminate.

2. A direction in force in relation to an investment firm terminates—

(a) at the end of the period specified in the direction, or

 

 

 

(b) if on the hearing of an appeal against the direction the Irish Financial Services Appeals Tribunal varies that period, at the end of that period as varied, or

 

 

 

(c) if the firm is a body corporate and a winding-up order is made in respect of the firm, or

 

 

 

(d) if the firm is an unincorporated body and a dissolution order is made in respect of the firm, or

 

 

 

(e) if the firm is a sole trader and the firm is adjudicated bankrupt, on the adjudication,

 

 

 

whichever first occurs.

 

 

What happens when direction is in force.

3. If a direction is in force in relation to an investment firm, the following provisions apply:

 

 

 

(a) the firm shall take all necessary steps to ensure that its assets or client or investor assets, wherever held, are only depleted in accordance with the prior approval of the supervisory authority;

 

 

 

(b) that authority may direct a credit institution or any institution exempt under section 7 of the Central Bank Act 1971 , or any other financial institution that holds an account in respect of the firm (including holdings of investment instruments of the firm) to suspend the making of payments from, or otherwise dealing with, the account without the prior approval of that authority.”.

 

PART 9

Amendment of Asset Covered Securities Act 2001

Item

Provision affected

Amendment

1.

Section 26

Substitute the following section for section 26:

 

 

“Certain decisions of Authority to be appealable to the Irish Financial Services Appeals Tribunal.

26.—The following decisions of the Authority are appealable decisions for the purposes of Part VIIA of the Central Bank Act 1942 :

 

 

(a) the rejection of an application made under section 13;

 

 

(b) the imposition of a condition when granting such an application;

 

 

 

(c) a variation of a condition of registration under section 16;

 

 

 

(d) the revocation of the registration of a designated credit institution under section 19;

 

 

 

(e) a direction given under section 20 or 21 in respect of a designated credit institution.”.