Central Bank (Supervision and Enforcement) Act 2013

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PART 8

Bank’s Power to Make Regulations

Bank’s power to make regulations.

48.— (1) The Bank may make regulations for the proper and effective regulation of regulated financial service providers.

(2) The provision that may be made by the regulations referred to in subsection (1) is as follows:

(a) provision as to the procedures that regulated financial service providers are to adopt for identifying, monitoring, reporting on the risks to which they are or may be exposed (including those posed by the state of the economy) and for managing those to which they are exposed so as to minimise them;

(b) provision regulating the administrative, accounting, auditing and reporting arrangements of regulated financial service providers;

(c) provision for the monitoring and recording by regulated financial service providers of the training and qualifications of their officers, employees, agents and intermediaries;

(d) provision about the resources to be maintained, and the procedures, systems and checks to be adopted, by regulated financial service providers for meeting their obligations under financial services legislation, and their obligations to customers, in a manner consistent with complying with their other obligations and for ensuring that their obligations to their customers are discharged by their agents and intermediaries;

(e) provision for securing that regulated financial service providers do not prevent access to financial services which in the opinion of the Bank are necessary to enable customers to make and receive payments or engage in other financial transactions which form a necessary part of the customers’ participation in basic economic activity;

(f) provision specifying the information to be given to customers by regulated financial service providers, including provision requiring—

(i) marketing, advertising or other promotional material (in whatever media) associated with financial services to be identified as such,

(ii) the giving of specified information about the regulated financial service provider and the financial services provided by it,

(iii) the identification of risks associated with financial services,

(iv) the giving, in a specified manner, of warnings of any volatility of price or value in relation to any financial products provided, of any limitations on the available market for the financial products and of other specified matters,

(v) the giving to customers of information about incentives in relation to financial services, including as to the advantages and disadvantages of taking up the incentives, the duration of their availability, the assumptions on which they are based, their cost, any other material information which customers should have for deciding whether to take them up and the desirability of seeking of independent advice before taking them up,

(vi) the identification of any additional financial obligations or commitments which might arise for customers after receiving financial services,

(vii) the making of comparisons between financial services and other financial services and the application of specified alternative assumptions in relation to financial services,

(viii) the giving of information about costs and associated charges relating to financial services,

(ix) the making to customers of statements as to whether financial services are suitable,

(x) that any recommendations about, or endorsements of, financial services be given only in accordance with specified conditions, and

(xi) that all information provided be accurate (and not misleading) and clear and easily understood by the average customer;

(g) provision restricting the making by regulated financial service providers of unsolicited phone calls or visits to customers;

(h) provision requiring regulated financial service providers to seek and (where provided) take account of information from customers for the purposes of assessing—

(i) customers’ knowledge and understanding of, and experience in relation to, financial services, and

(ii) the suitability of financial services for customers (having regard to their requirements, personal circumstances, financial position and other relevant circumstances),

and provision about what shall or may be done by regulated financial service providers if information sought from customers is not provided;

(i) provision specifying requirements which are to apply in relation to the provision of financial services to customers for the purpose of determining the suitability of the financial services for the customers;

(j) provision about the management of conflicts of interest that may arise as between customers and regulated financial service providers, their officers, employees, agents or intermediaries or related undertakings, in the provision of financial services;

(k) provision about the standards (for example as to speed, cost and accuracy) to be met by regulated financial service providers in relation to the execution of customer orders or requests for the provision of financial services;

(l) provision about the making of loans and making available of other credit facilities or the provision of other financial services to customers by regulated financial service providers, including provision—

(i) restricting the provision of unsolicited loans or credit facilities to customers,

(ii) specifying processes by which regulated financial service providers are to assess and process applications for loans or other credit or other financial services,

(iii) setting out circumstances in which, and conditions subject to which, security or guarantees may be required in relation to customers to whom loans are made or credit made available or other financial services provided,

(iv) requiring the giving of notification to persons giving security or guarantees in respect of loans, other credit facilities or other financial services of changes in the terms of the loans, other credit facilities or other financial services,

(v) specifying processes by which regulated financial service providers may decline to make loans or make available or withdraw credit or to provide other financial services, including the giving of explanations,

(vi) specifying the conditions subject to which loans may be made, credit may be made available or other financial services may be provided, and

(vii) prohibiting the making of the provision of one financial service to a customer dependent on the provision to the customer of another, except where that is required by law;

(m) provision about the making of loans, the making available of other credit facilities and the provision of other financial services by a regulated financial service provider to a restricted person, including provision—

(i) imposing restrictions on the terms on which loans may be made, varied or managed, other credit facilities may be made available, varied or managed, or other financial services may be provided, to restricted persons,

(ii) about the systems to be adopted for the management of the making of loans, making available of other credit facilities, or provision of other financial services, to restricted persons,

(iii) specifying circumstances in which the Bank’s approval is required for the making of loans, making available of other credit facilities, or provision of other financial services, to restricted persons, and

(iv) requiring the reporting of loans made, other credit facilities made available, or other financial services provided, to restricted persons;

(n) provision requiring—

(i) the giving of reasons for refusals to provide quotations for insurance cover applied for and for not accepting claims under policies or contracts of insurance,

(ii) the giving of notification in relation to decisions on claims under policies and contracts of insurance and in relation to the carrying out of work to repair property under such policies and contracts including the cost and scope of such work and its certification, and

(iii) the giving of information in relation to appeals procedures;

(o) provision requiring the giving of statements of account by regulated financial service providers to customers in respect of financial services, including the information to be given in such statements, the form and frequency of such statements and the manner in which such statements are to be given;

(p) provision about the standards to be met, and the procedures, systems and checks to be adopted, by regulated financial service providers for dealing with and holding the assets and money of customers, including provision about—

(i) the safeguarding of customers’ rights, in particular in the event of insolvency,

(ii) the use to which customers’ assets and money may be put, and

(iii) the management of customer accounts;

(q) provision for requiring regulated financial service providers to facilitate the switching of business by customers to other financial service providers, including provision—

(i) for the giving of information to customers about switching, and

(ii) specifying the procedures and other arrangements to be put in place to enable switching;

(r) provision about how regulated financial service providers are to deal with customers who are or are likely to be in financial difficulty (including customers who are or are likely to be in arrears) including, in relation to such customers, provision—

(i) setting out the considerations to be taken into account in considering how to deal with such customers,

(ii) specifying the information to be provided to such customers about the management of the arrears and the consequences of default, and

(iii) specifying the resolution processes to be adopted in relation to arrears,

(s) provision for the processes and procedures to be adopted by regulated financial service providers in respect of the processing of rebates and refunds owed to customers;

(t) provision about the ways in which errors made by regulated financial service providers in respect of their customers are to be corrected;

(u) provision requiring the making available of simple and inexpensive resolution procedures for disputes between regulated financial service providers and customers and for securing that complaints by customers about regulated financial service providers are dealt with speedily, efficiently and fairly, including provision—

(i) about the first point of contact for complainants,

(ii) regulating the recording of complaints,

(iii) specifying timescales for responding to complaints,

(iv) about the remedies and redress, including reimbursement or compensation (or both), to be available in cases of complaints,

(v) for determining where responsibility for dealing with complaints lies in cases where more than one financial service provider is involved, and

(vi) about the keeping and retention of records relating to complaints;

(v) in relation to any proposed transfer or cessation of any relevant part of the business of any regulated financial service provider or the merger of that business with the business of another person—

(i) provision for the giving of information relating to such transfer, cessation or merger, and

(ii) provision for ensuring that customers’ interests are sufficiently protected in the event of such transfer, cessation or merger;

(w) provision enabling the Bank to require regulated financial service providers to establish and maintain—

(i) plans for recovery from any deterioration in specified financial circumstances, in particular by setting out actions that could be taken to facilitate the continuation of the business or part of the business when experiencing financial instability, and

(ii) plans for the orderly winding-up or transfer of business in specified financial circumstances;

(x) provision for the keeping by regulated financial service providers of such records as may be required for effective management and regulation, including provision—

(i) about the form and manner in which, and period for which, they are to be kept,

(ii) enabling their verification, and

(iii) for permitting access by the Bank.

(y) any other provision relating to any of the matters set out in paragraphs (a) to (x) which the Bank considers appropriate.

(3) Regulations made under subsection (2)(m) may specify that a person is a restricted person—

(a) if he or she holds an office or employment, with the regulated financial service provider, of a description specified in the regulations,

(b) if he or she performs a function for, or provides a service, of a description specified in the regulations, to the regulated financial service provider, or

(c) in such circumstances as the regulations may specify, if he or she is related to, or a member of the same family as, a person within paragraph (a) or (b).