Compliance workers remain wary of new regulator enforcement laws

Some professionals believe the Central Bank will be allowed to fine individuals up to €1m for rule breaking

The Central Bank can take enforcement action under the administrative sanctions procedure directly against individuals for breaches of their obligations rather than only for their participation in breaches committed by a firm.

A corporate compliance agency said most professionals are overwhelmingly in favour of new laws that give the Central Bank more sanction powers, but warned that they could financially cripple some workers.

Some professionals believe that the Central Bank will be allowed to fine individuals up to €1m for rule breaking through the changes introduced by the Individual Accountability Framework Act last year, a survey completed by the Compliance Institute showed. 

“Just 12% of the people we surveyed agreed the changes could hamper the industry in Ireland, but 25% believe they could in fact result in financial ruin for the workers involved,” said Compliance Institute chief executive Michael Kavanagh.

'Waiting to see'

The Compliance Institute found that many workers have accepted the greater enforcement controls assigned to the financial regulator but the majority “are waiting to see how the new laws work in practice before they make a final judgement”, according to the survey.

The Compliance Institute completed a survey of 175 compliance professionals in Ireland about their attitudes towards new laws passed last March, which were introduced to clamp down on individuals found guilty of wrongdoing in the financial services industry.

Action against individuals

As a result of the changes, the Central Bank can take enforcement action under the administrative sanctions procedure directly against individuals for breaches of their obligations rather than only for their participation in breaches committed by a firm.

The Central Bank has previously taken enforcement actions through this process in instances such as sanctioning banks for their involvement in the tracker mortgage scandal. However, no individual was fined for their involvement in the long-running failings in respect of tracker mortgage customers during that period.