The President has signed into law new measures that will introduce an accountability regime for senior executives in the financial services industry.
The Central Bank (Individual Accountability Framework) Act 2022 was passed by the Oireachtas in recent weeks.
The legislation will introduce a Senior Executive Accountability Regime (SEAR) similar to that already in place in the UK, which places obligations on certain customer-facing firms and senior individuals within them to set out clearly where responsibility and decision-making lies.
It also includes enhancements to the existing fitness and probity regime to ensure it operates more effectively.
The laws also set out a new unified enforcement regime that breaks the existing "participation link" that requires the Central Bank to first prove a contravention of financial services legislation against a regulated firm before it can take enforcement action against an individual.
The law also sets out three sets of clear and enforceable conduct standards applying to regulated firms, those performing controlled functions and other senior executives.
A spokesperson for the Central Bank said it welcomes the fact that the legislation has now been signed into law, as it has been working towards its implementation for some time.
Elements of the new regime will be enforced immediately and the Central Bank is expected to publish those regulations and guidance around them early next week.
It will also launch a consultation process around the implementation of the SEAR to provide those who will be subject to the new rules an opportunity to express views about how it should be implemented.
The regulator has been seeking additional powers for some time to give it the ability to hold senior executives in regulated firms to account for their actions and for the actions of their staff.
Despite handing down fines totalling hundreds of millions of euro over the affair, no individual in any bank has yet faced sanctions from the Central Bank for their involvement in the tracker mortgage scandal.
"This long-awaited Act introduces significant changes for firms and individuals," said Ciaran Walker, a consultant in financial services regulation with global law firm Eversheds Sutherland.
"Our experience of the equivalent UK regime, which was introduced in 2016, suggests that it will require considerable work by firms to ensure that they effectively embed the required processes and conduct standards."
"There will be an increased onus on firms to ensure the conduct standards are met. It will also concentrate the minds of senior individuals on the potential implications for them personally of acting unethically or turning a blind eye to misconduct by others."
