Thursday 23 January 2020

Central Bank gets tough with second big fine in a week

The Central Bank headquarters in Dublin
The Central Bank headquarters in Dublin
Donal O'Donovan

Donal O'Donovan

Outsourcing giant Capita has been hit with a €1.15m fine from the Central Bank for conducting some business here without proper authorisation.

In a statement, the Central Bank of Ireland said it has fined Capita Life and Pensions Services (Ireland) Limited €1,150,000 and reprimanded it for breaches of the Investment Intermediaries Act, 1995 (the "IIA") and the European Communities (Markets in Financial Instruments) Regulations 2007 (the "MiFID Regulations").

The breaches have been admitted by the firm.

British-headquartered Capita provides a huge range of outsourcing services to mainly large companies. In Ireland its big clients include Nama, from which it has won lucrative contracts to manage loans. Two years ago Capita bought smaller Irish rival South Western in a €35m deal, adding 1,000 staff to the Irish business.

The Capita case takes the total of fines imposed by the regulator to €46m since 2006. Fines of €4m so far this year include this week's €1.4m fine and reprimand imposed on KBC Ireland for breaching rules on lending to people or other entities connected to the bank. The Central Bank said KBC Ireland had failed to comply with the relevant lending rules on 18 separate occasions - ranging from the granting of a new loan, extending maturities on loans and in respect of management of existing loans.

Like the KBC case, the fine imposed on Capita follows a settlement agreement with the firm, the Central bank said.

"The firm's failure to obtain the required authorisations evidenced an unacceptable lack of proper compliance oversight," said Derville Rowland, Central Bank director of enforcement.

The two breaches involved occurred consecutively over a total period of nine years and seven months.

They included Capita acting as an investment business firm between February 1, 2006, and October 31, 2007, without authorisation, and acting as an investment firm between November 1, 2007, and September 18, 2015, without authorisation required under the MiFID Regulations.

The firm was also holding client assets without authorisation from the Central Bank, the regulator said. Capita said it would make no additional comments, beyond the Central Bank statement.

Irish Independent

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