Seanad Éireann debate -
Wednesday, 22 Feb 2023

I remind Senators that a Senator may speak only once on Report Stage, except the proposer of an amendment, who may reply to discussion of the amendment. On Report Stage, each non-Government amendment must be seconded.

Amendments Nos.1 and 2, in the names of Senators Higgins and Black, are out of order

I move amendment No.3:

In page 12, line 29, after “legislation” to insert “or other relevant legislation”

My amendments in this grouping seek to address the issue, discussed on Committee Stage, of the framing of the accountability framework. Amendment No. 3 seeks to amend section 53B(2) by inserting after the obligation to act in accordance with obligations under financial services legislation that there would also be an obligation to act in accordance with other relevant legislation. Amendments Nos. 4 to 6, inclusive, seek to make similar changes in section 53E and amendment No. 7 seeks a similar change in section 53F.

Our reason for proposing these amendments is that we have a concern that the accountability framework is looking simply to the financial services sector and obligations under financial services legislation, whereas it should be the case that any relevant legislation or obligations, be they specific to financial services or have a wider focus, should be part of the framework for how individuals should act when it comes to engaging with the accountability framework.

I thank the Senator and understand the point she is making with these amendments. I have looked at them carefully. The Senator is trying to insert references to this "or other relevant legislation” and this set of obligations or other relevant obligations.

Two difficulties arise with the amendments. One is they do not define relevant legislation or obligations, which we must do to provide certainty in legislation. The second is if one has those obligations under this Act and under another Act, one still has obligations under the other Act. The obligations are there in any event. The Senator had amendments ruled out of order regarding human rights and other points but all of those things are already in law.

I feel comfortable that this is an expansive piece of law and adds to a regulatory framework, rather than taking from it or diminishing responsibility in any way. This adds significant burden, responsibility and obligations. It is not removing anything in law or diminishing any obligations or requirements under other legislation. For those reasons, I am not accepting the amendments. I do not believe they are necessary and they would be difficult from a drafting perspective.

I move amendment No. 4:

In page 14, lines 39 and 40, to delete “financial services” and substitute “relevant obligations or”.

I move amendment No. 5:

In page 14, line 42, to delete “financial services” and substitute “relevant obligations or”.

I move amendment No. 6:

In page 15, line 2, to delete “financial services” and substitute “relevant obligations or”.

I move amendment No. 7:

In page 16, line 26, to delete “obligations under financial services” and substitute “relevant obligations or”.

I move amendment No. 8:

In page 22, between lines 20 and 21, to insert the following:

“(2C) The Minister shall, within the 2 years following the commencement of this section, lay a report before both Houses of the Oireachtas detailing—

(a) the level of effective implementation of the designation of person who perform a controlled function,

(b) the effectiveness of the identification and designation of persons who perform a controlled function,

(c) the potential to expand the range of functions under this designation, and

(d) the extent to which there may be persons not currently designated as persons who perform a controlled function but who exert significant influence in relation to decisions on the performance of a controlled function and how this may be reflected in any future revision of this enactment.”,”.

This amendment would require that the Minister shall, within the two years following the commencement of this section, lay a report before both Houses of the Oireachtas detailing the following: the level of effective implementation of the designation of persons who perform a controlled function; the effectiveness of the identification and designation of persons who perform a controlled function; the potential to expand the range of functions under this designation; and the extent to which there may be persons not currently designated as persons who perform a controlled function but who exert significant influence in relation to decisions on the performance of a controlled function and how this may be reflected in any future revision of this enactment.

I thank Senator Black for raising this because it speaks to what we are trying to do with this legislation, who we seek to include and the significant expansion of people who will now come under this legislation. I understand the Senator wants accountability and reporting and that is important. However, the system for designated controlled functions and pre-approval controlled functions has worked well over the past 12 years. I gave figures on Committee Stage of the number of people involved, the number of sanctions and the careful way they had been used. The regulations are transparent. They can be and have been amended by the Central Bank when required. As more information comes and organisations get more complex, we are in this legislation adding considerably to that range of people but the bank undertakes consultation with stakeholders to amend that range of functions and keep the matter under review. As recently as 2022, amending regulations were issued by the bank following such a process.

Section 32L of the Central Bank Act 1942 requires that the Central Bank shall prepare a statement relating to its performance in regulating financial services - which would include this - which is provided to the Minister for Finance and laid before the Houses of the Oireachtas. The bank engages regularly with the Houses if there are specific issues.

I met with the Central Bank deputy governors today and discussed this legislation and our expectations around the consultation process and the regime more broadly with them. It was not in terrific detail as the meeting was about something else but I was conscious I was coming here today. The bank is always mindful of the performance of its functions and its relationship with the Department of Finance and the Houses of the Oireachtas. I will not accept the amendment because I believe it is covered in any event, through both the Oireachtas processes and the laying of the report.

I move amendment No. 9:

In page 52, between lines 16 and 17, to insert the following:

“(ia) whether it has had a widespread impact on the welfare of the State generally,”.”.

The amendment seeks to stipulate that when imposing a sanction on an individual, consideration should be given to the effect of the prescribed convention with regard to whether it has had a widespread impact on the welfare of the State generally. This is a slight alteration to our amendment on Committee Stage as its narrowed to only include the welfare of the State. This goes back to the historical piece on where this legislation is coming from, that is, the devastating effect the banking crisis had on our society, effects of which are still felt today.

I urge the Minister of State to accept the amendment. If there is to be true accountability, there needs to be a recognition of how actions in this sector impact on society and our collective well-being as a nation. This is a key opportunity to reflect the spirit of the Bill.

This amendment encapsulates what we are trying to do with this legislation, which is to add to the regulatory structures we have put in place specifically in response to the financial crisis. On speaking to the Central Bank today, it was careful to reiterate its mandate, which is around the protection of the financial system in Ireland, specifically, for the well-being of the people of the State when accessing financial services. It is about having safe financial services when accessing their money at any given time, and making sure we do not have the sort of shock we previously experienced. That is the mandate the Central Bank has. This legislation adds to that considerably and adds to the obligations on entities that are regulated or supervised here. This can have a pan-European context, not just an Irish context, which is important. Customers of financial institutions here are as likely to be in France they are to be in any part of Ireland.

The Central Bank is engaged. That is its very mandate. Taking all these matters together and having discussed the considerable additional obligations contained in the Bill on Committee Stage, I believe that is covered. In its regulatory and gatekeeper roles, through the imposition of fines and other sanctions and its day-to-day supervision of the financial sector, the Central Bank serves the welfare of this State. We have a highly regulated system.

Since taking up office as the Minister of State with responsibility for financial services, what I am hearing from industry is that having the Irish regulatory mark, which is very difficult to get, is a matter of real pride. It is a highly-regulated system and is well-regulated. It is a matter of pride to have the Irish mark precisely because it is such a gold standard relative to some other operations around Europe. Not only that, but the Central Bank is supervised on a peer-to-peer basis with other European central banks. The architecture is there, which protects the welfare of the State and its citizens. Therefore, I am not sure from a technical perspective. From a drafting perspective, it may not seem important but it is. The word "widespread" is too broad to accept, even if I were to facilitate the Senator. On that basis, I cannot accept the amendment.