The new ASP Guidelines consolidate and enhance the previous ASP Outline 2018, Inquiry Guidelines 2014 and ASP Sanctions Guidance 2019. The enhanced ASP is designed to underpin and support the introduction of the Individual Accountability Framework, including the Senior Executive Accountability Regime.
The feedback statement and ASP Guidelines outline a number of further changes to aspects of how the ASP will operate in practice going forward as against the draft ASP Guidelines. The key changes are summarised below.
Key changes to the ASP Guidelines
Role of the Responsible Authorised Officer (RAO)
A new section has been included in the ASP Guidelines to describe the role and responsibilities of the RAO.
The ASP Guidelines provide that the CBI will consider requests to authorise disclosure of confidential information relating to an ongoing ASP investigation on a case by case basis where it is considered reasonably necessary to do so in the circumstances.
This is in addition to disclosure required by law or disclosure to a legal advisor (which was provided for in the draft ASP Guidelines).
Timeframe for responses
In the context of the potentially more involved ‘Investigation Report’ process, the timeframe for making submissions to the Draft Investigation Report has been amended such that a notice from the CBI inviting submissions in response to the Draft Investigation Report will specify the period within which submissions must be made, and that period will not be less than 7 days.
The time period stated, which will vary from case to case, will be set by the RAO following consideration of matters such as the complexity of the issues, the contents of the Draft Investigation Report, the period necessary to give the subject of an investigation a fair opportunity to respond, and the timely progression of the investigation report process. The subjects of investigations will still be entitled to request the CBI to agree to an extension of this timeline in the context of any particular investigation.
Use of information
The ASP Guidelines set out a non-exhaustive list of examples in which information gathered by the CBI in the course of an investigation can be used by the CBI in the performance of its statutory functions, including:
to progress investigations such as the interviewing of witnesses (including, past or current employees of a firm), for the purpose of other ASP investigations or any other kind of investigation conducted by the CBI
for the preparation of a Draft Investigation Report and Final Investigation Report when an investigation is completed
for the purposes of an Inquiry, whether or not such inquiry is subsequent to, or otherwise related to, the investigation in which the information was gathered
an appeal to the Irish Financial Services Appeals Tribunal or an application to the High Court
the CBI’s authorisation, supervision, and fitness and probity functions more generally
Legal professional privilege - Disclosure agreement
The ASP Guidelines clarify that entry into a disclosure agreement by the subject of an investigation will be on a voluntary basis only and cannot be required by the CBI.
A disclosure agreement will include a provision confirming that the CBI can utilise disclosed material for the performance of its statutory functions (and any other purpose specified in the agreement). The ASP Guidelines now provide examples of such statutory functions, which are the same examples as those listed in the row above.
Publication of the details of the Notice of Inquiry
The ASP Guidelines provide that it is expected that the Inquiry Members will issue a public notice even in circumstances where an inquiry concludes and Inquiry Members have found that no prescribed contravention has been committed.
Appointment of Inquiry Members
The ASP Guidelines clarify that sole Inquiry Members are not required to be legally qualified.
Following the appointment of Inquiry Members, the CBI’s Regulatory Decisions Unit (RDU) will write to the Inquiry participants to confirm the identity of the Inquiry Members, in addition to confirming their appointment to the Inquiry.
Prior to a member of the Regulatory Decisions Panel being appointed as an Inquiry Member, the member will be required to review relevant inquiry information and sign a declaration confirming that they are not aware of any actual or potential conflicts.
Management of conflicts of interest
The ASP Guidelines provide additional detail on how conflicts are managed at the appointment stage and throughout the Inquiry process.
The process in ‘Undisputed Facts’ settlements and Investigation Report settlements
The ASP Guidelines clarify how the new settlement processes will operate and that the CBI will only be minded to amend a prescribed contravention, facts or sanction as set out in the proposed settlement terms where the subject of the investigation can satisfy the CBI of a legal or evidential justification to do so.
In relation to the release of a public statement following settlement and the CBI’s commentary ordinarily set out in the statement, the ASP Guidelines clarify that the commentary will not be limited to the market aspects of a case and is relevant to the wider public.
Determination of monetary penalties for individuals
The ASP Guidelines clarify that firms and individuals will be provided with information on how any proposed monetary penalty has been calculated (which would generally include the basis for the relevant ‘starting point’ referred to in the Guidelines) and that the subject of an investigation will have an opportunity to engage with the CBI on sanctions as part of a settlement or Inquiry process.
Submissions on sanction
The ASP Guidelines clarify that a subject of an investigation or Inquiry will be entitled to make submissions on sanction as part of the settlement process.
Directions Imposing Conditions or Disqualification as a Sanction
The ASP Guidelines provide further information on the imposition of directions imposing conditions or disqualification as a sanction and also now include no-exhaustive examples of potential conditions.
The ASP Guidelines clarify that an Inquiry decision is the only decision under the ASP that is an “appealable decision” and may be appealed to IFSAT.
A&L Goodbody has been at the forefront of feedback on the scope and content of the IAF since it was first proposed and has represented regulated firms in a range of Administrative Sanctions Procedure investigations across all aspects of the financial services industry.
We will continue to provide updates on developments on both the IAF and the operation of the enhanced ASP in practice.