Legal Updates

 Litigation and Dispute ResolutionJuly 10, 2023

Central Bank launches consultation on its Administrative Sanctions Procedure

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For further information on any of the issues discussed in this publication please contact the related contact(s) on this page.

The Central Bank of Ireland (‘CBI’) has issued Consultation Paper 154 seeking feedback on draft composite guidelines, which update and consolidate the existing Administrative Sanctions Procedure (‘ASP’), as set out in the ASP Outline 2018, Inquiry Guidelines 2014 and ASP Sanctions Guidance 2019.

The proposed changes follow the signing into law of The Central Bank (Individual Accountability Framework) Act 2023 (the ‘Act’) in March 2023, a CBI review of operating the ASP in recent years and international best practice.

Individual Accountability Framework and the ASP

The ASP is the process by which the CBI investigates breaches of financial services obligations by firms and/or individuals participating in those breaches and the draft composite guidelines, detailed in Consultation Paper 154, are designed to underpin and support the implementation of the Individual Accountability Framework (‘IAF’).

The stated purpose of the IAF, as introduced by the Act, is to achieve better outcomes for users of financial services and the ongoing stability and integrity of the financial system by improving the governance, performance and accountability of financial services firms.

The CBI has stated that enforcement has an important role in this regard and the Act introduces a number of changes to the existing ASP, which will apply to existing obligations and new obligations introduced as part of the IAF.

Reforms to the ASP

Many aspects of the ASP remain unchanged by the Act, including its fundamental structure. In many instances, the Act puts existing processes and procedures already operated by the CBI on a statutory footing. However, there are a number of key legislative and policy changes in respect of the ASP, as contained in the Act and the draft ASP guidelines, which include the following;


  • The investigation phase of the ASP is now on an express statutory footing, with a statutory requirement to issue the firm or individual that is the subject of the ASP investigation with a Notice of Investigation, replacing the previously used Investigation Letter. The Notice must contain a statement identifying each suspected breach and confirmation that a written response from the firm or individual in question will be taken into account if provided within the timeframe stipulated.
  • The statutory ASP investigative process will include a new role of a responsible authorised officer (‘RAO’) (appointed by the CBI), whose functions include the gathering and analysis of information and the drafting of an investigation report. Discretionary functions include determining the level of material to be disclosed with the Notice of Investigation, while responsibilities include keeping the subject of the investigation informed as to the progress of the ASP investigation.
  • The investigation report is to be shared by the RAO with the investigation subject, who has a right of response. The draft ASP guidelines include details of the considerations of the RAO when preparing the draft investigation report, the material which will be included and the time period and process around making submissions on the draft report.
  • An investigation may be discontinued by the CBI and the RAO must inform the subject of the investigation of the decision and the reasons for the discontinuance.
  • The investigation report and any submissions made by the subject will be considered by a CBI appointed decision maker in determining whether an inquiry will be held. The draft ASP guidelines outline the types of decisions which may be made, including the option to hold a more limited form of inquiry to determine sanctions only.
  • Information relevant to ASP investigations may be subject to legal professional privilege. The use of disclosure agreements is expressly provided for in the Act, with the inclusion of a statutory power for the CBI to enter into disclosure agreements relating to privileged material.


  • The Act introduced procedural safeguards to ensure the independence of the inquiry decision making process. The Regulatory Decisions Panel, from which inquiry members are appointed, is designated as a panel established by the Minister for Finance.
  • The CBI has been provided with new functions at inquiry, which include the making of submissions, leading evidence and examining witnesses, while the draft ASP guidelines set out that the enforcement division at the CBI (or legal practitioners appointed on its behalf) will take an active role at an ASP inquiry.
  • It is intended that the disclosure of documents will primarily occur at the investigative stage and while it will remain the case that disclosure requests may be made at the inquiry stage, it is expected that the necessity for this will be vastly reduced.
  • The draft ASP guidelines propose that the first stage of the inquiry will involve the issuing of an inquiry management questionnaire for the purpose of identifying any procedural issues or applications at an early stage so that they can be resolved in advance of the substantive hearing.
  • The civil standard of proof (the balance of probabilities) will apply in inquiries.
  • The Act contains new confidentiality provisions, including the ability for the chair of the inquiry to order, where there are reasonable grounds, that specified information relating to specified proceedings before the inquiry if held in public, shall not be disclosed and any person who contravenes such an order shall be guilty of an offence.
  • The Act requires that the inquiry members must notify the subject of the inquiry of their decision at the conclusion of the inquiry. The inquiry decision must set out in writing the finding as to whether a prescribed contravention has been or is being committed, the grounds upon which the finding is based, and the sanctions (if any) imposed. Following notification of this inquiry decision, the subject of the inquiry may exercise their right of appeal.
  • Any inquiry decision will only take effect if it has been confirmed by the High Court.


  • There are three distinct settlement procedures provided for in the Act, two of which are new, namely, the Undisputed Facts Settlement and the Investigation Report Settlement. Both of these procedures require the subject of the investigation to admit the breaches identified. Discounts on monetary penalties of up to 30% may be available for an Undisputed Facts Settlement that occurs prior to completing an investigation and up to 10% for an Investigation Report Settlement that occurs prior to an inquiry. Settlement scheme discounts will apply to monetary penalties only and not to any other sanction, such as disqualifications.
  • The third settlement procedure formalises the existing ability to settle on a ‘no admissions’ basis and is predicated on a scenario where admissions are not provided or required.
  • The Act introduces a requirement that sanctions agreed as part of the Undisputed Facts Settlement and the Investigation Report Settlement must be confirmed in the High Court in order to take effect.


  • There are amended disqualification sanctions for individuals to allow for a more tailored approach, an expansion on the number of individuals coming within the scope of the ASP and a new sanction of the imposition of conditions on individuals.
  • The Act introduced a requirement for the CBI, when proposing sanctions, to have regard, where relevant, to inter alia an individual’s financial position and their seniority and level of responsibility.
  • The CBI will now publish its methodologies for the determination of monetary penalties for firms and individuals as part of the draft ASP guidelines, which include a 7-step framework for assessing monetary penalties.


The Consultation remains open until 14 September 2023 and the CBI will then review all feedback and prepare an associated feedback statement to be published by the CBI.

The CBI has previously set out a proposed staggered implementation timeline for the introduction of the IAF, as detailed in our article on the CBI Consultation Paper 153. Further information on the updated CBI procedures for fitness and probity investigations, suspensions and prohibitions, which are being introduced in order to give effect to the IAF, can be found here, while Dillon Eustace also hosted a webinar on the IAF and its likely implications for regulated firms.

DISCLAIMER: This document is for information purposes only and does not purport to represent legal advice. If you have any queries or would like further information relating to any of the above matters, please refer to the contacts above or your usual contact in Dillon Eustace.

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