Written Answers - Banking Sector Regulation

Tuesday, 15 May 2012

Dáil Éireann Debate
Vol. 765 No. 3

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  186.  Deputy Gerry Adams  Information on Gerry Adams  Zoom on Gerry Adams   asked the Minister for Finance  Information on Michael Noonan  Zoom on Michael Noonan   if the Central Bank of Ireland will confirm whether the outsourcing of servicing of residential mortgages for Permanent TSB or any other covered financial institution is considered a controlled function or pre-approval controlled function under the meaning of the Central Bank Reform Act 2010; and if he will make a statement on the matter. [24080/12]

  187.  Deputy Gerry Adams  Information on Gerry Adams  Zoom on Gerry Adams   asked the Minister for Finance  Information on Michael Noonan  Zoom on Michael Noonan   if the Central Bank of Ireland will confirm whether the outsource services which IBRC is seeking after their published pre-qualification questionnaire are services which the Central Bank of Ireland deems as a controlled function or pre-approval controlled function under the meaning of the Central Bank Reform Act 2010; and if he will make a statement on the matter. [24081/12]

  188.  Deputy Gerry Adams  Information on Gerry Adams  Zoom on Gerry Adams   asked the Minister for Finance  Information on Michael Noonan  Zoom on Michael Noonan   if the Central Bank of Ireland will confirm whether the current agreement between a company (details supplied) and Allied Irish Banks is defined as a controlled function or pre-approval controlled function under the meaning of the Central Bank Reform Act 2010; if he will confirm, if it is considered a pre-approval controlled function, whether Allied Irish Banks obtained the prior written approval from Central Bank of Ireland to appoint the company for the outsourcing services as required under the Central Bank's guidance on fitness and probity standards for outsourcing to an unregulated entity; if he will confirm whether as per the Central Bank of Ireland guidance on fitness and probity standards 2011 the Central Bank assured itself that persons in the company performing the pre-approval controlled functions were compliant with the fitness and probity standards; if he will confirm whether those persons included any of the shareholders of the company; and if he will make a statement on the matter. [24082/12]

  189.  Deputy Gerry Adams  Information on Gerry Adams  Zoom on Gerry Adams   asked the Minister for Finance  Information on Michael Noonan  Zoom on Michael Noonan   if he will confirm whether the Central Bank of Ireland, in their consideration of compliance with section 3.3.2(c) of the fitness and probity standards code, a person’s performance of a function in a regulated financial service provider that received State financial support, only concerns financial service providers which received State financial support and not non-Irish State financial support; and if he will make a statement on the matter. [24083/12]

[363]Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan  Zoom on Michael Noonan  I propose to take Questions Nos. 186 to 189, inclusive, together.

I have been informed by the Central Bank of Ireland that they are precluded under section 33AK of the Central Bank Act 1942, from disclosing information on individual financial service providers.

The Fitness and Probity Regime applies to regulated financial service providers. Under section 21(1) of the Central Bank Reform Act 2010 a regulated financial service provider shall not permit a person to perform a Controlled Function unless:

A person to whom the Standards apply shall comply with them at all times. Specifically a person is required to be:

The standards do not apply to persons performing functions with respect to a regulated financial service provider where that function is carried on by another person (e.g. outsourced) and all of the following conditions are satisfied:

Otherwise, the standards apply.

The meaning of Controlled Functions and Pre-approval Controlled Functions are set out in the Central Bank Reform Act 2010 (sections 20 and 22) Regulations 2011, S.I. No. 437 of 2011 as amended by Central Bank Reform Act 2010 (sections 20 and 22) (Amendment) Regulations 2011, S.I. No. 615 of 2011.

In determining whether an individual is performing a Controlled Function or a Pre-approval Controlled Function, regulated financial service providers should assess the role and functions of each individual in line with the definitions prescribed in the Regulations. The regulated financial service provider should consider the responsibilities of the specific function and determine the specific competencies expected of a person performing that specific Controlled Function. Pre-approval Controlled Functions are by definition also Controlled Functions.

The Central Bank have informed me that if a person performed a function in a regulated financial service provider, which if performed at present would be subject to fitness and probity standards, and that regulated financial service provider received State financial support, consideration shall be given to the competence and skills demonstrated by that person in that function and to the extent, if any, to which the performance of his or her function may have contributed to the necessity for such State financial support.

[364]The Central Bank takes into account all relevant matters in its assessment of a person’s competence and capability and this would include their performance, where appropriate, in a financial service provider which received non-Irish State financial support.


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