As previously highlighted, the Central Bank (Individual Accountability Framework) Bill 2022 (IAF Bill) passed the report and final stage before the Dáil last week, where four typographical amendments were agreed. The IAF Bill progressed to second stage before the Seanad this week, and we set out below the key issues raised upon debate.
Seanad debate commentary
In reading the IAF Bill for a second time, the Minister of State at the Department of Finance, Deputy Jennifer Carroll McNeill, highlighted that the Bill will play a key role in driving positive cultural change in financial services organisations that will benefit consumers, employees and wider society. The Deputy also highlighted that, to ensure broader individual accountability, it is necessary to break the 'participation link' with the underlying regulatory contravention committed by the relevant firm and, to a large extent, do away with the related concept of a 'person concerned in the management of a regulated financial service provider'. However, the Deputy emphasised that participation will continue to be a 'stand-alone' contravention for which an individual can be held accountable.
The Deputy also highlighted the IAF Bill's treatment of privileged legal material, and the introduction of a clearer mechanism to facilitate the provision of legally privileged material to the Central Bank of Ireland (CBI), for a specified purpose, without waiving privilege. ALG has extensive experience in engaging with the CBI on privilege issues, including limited waiver agreements, which this provision in effect codifies.
The Deputy also flagged the Minister for Finance's intention to bring forward a further 'minor technical amendment' on Committee Stage in respect of Part 7 of the IAF Bill, which relates to saving and transitional provisions – we will provide further updates on this proposed amendment when it is brought forward.
The IAF Bill now progresses to the committee stage, where it is scheduled for deliberation on 16 February 2023. It will be particularly interesting to see whether, in addition to the 'minor technical amendment' flagged regarding the Part 7 transitional provision, there will be any further amendments to the IAF Bill in relation to the issues raised by Deputy Doherty at the report and final stage before the Dáil last week – see previous ALG update here.
A&L Goodbody has been preparing for, and assisting clients in respect of their implementation of, the IAF and SEAR for some time. We will continue to publish insights as the legislation, guidance and CBI consultation process develops.