Good morning Ladies and Gentlemen

I’d like to thank the ACOI for their invitation to address you this morning.

I’ll open my remarks with a well-worn saying, no doubt one over-used in compliance and regulatory circles, being that of “Sunlight is said to be the best of disinfectants”.  What is perhaps less well-known is that the owner of this utterance, the associate Judge to the US Supreme Court Louis Brandeis, was the author of a landmark text published 100 years ago this year.  Its title, Other People’s Money And How the Bankers Use It, spoke presciently of the factors that would eventually lead to the Wall Street Crash and the Great Depression that followed.

In Ireland’s case, I believe that we have seen through the worst of the Financial Crisis, and are now viewed as making a strong recovery.  And in this context, sunlight serves as the best medicine.

This morning I’d like to touch on two distinct but related areas, the first being the body of legislation on the Government Reform side advanced under Minister Howlin, and secondly the area of Financial Services in general, and in particular the preparation, under my responsibility, of an International Financial Services Strategy for Ireland.

Both areas have a direct bearing on your work as compliance officers and regulatory officials across the public and private sectors.

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The vision of a reformed system of Government as set out in the programme for Government is still very much a work in progress. However, the aim of the suite of measures, both adopted to date and currently being advanced is basic and fundamental – to embed a vibrant culture of openness and transparency in the operation and conduct of public life in Ireland.

These measures will in turn:

• deliver greater accountability to the activities of all bodies and agencies charged with delivering services to the citizen;
• promote greater efficiency and effectiveness in the public sector;
• rebuild public trust in our system of Government;
• encourage enhanced participation; and in aggregate
• strengthen our democracy

I will outline several significant measures that have already been delivered.

The Government recently announced a revised model for Ministerial appointments to State Boards. In future, all appointments to State Boards must be advertised openly on the State Boards portal operated by the Public Appointments Service.

The revised approach strengthens requirements on Ministers to develop comprehensive criteria for the filling of vacancies on State Boards.

Central to this is consultation with key stakeholders, such as the current Chair of the State Board concerned and the Public Appointments Service.  Officials in the Department of Public Expenditure & Reform are currently preparing overarching guidelines on appointments for approval by Government, and this will include issues related to gender and diversity.

The Ombudsman (Amendment) Act 2012 has extended that Office’s jurisdiction and powers, and has resulted in the most significant expansion in the jurisdiction of the Ombudsman in its 30 year history.

We have enacted the Protected Disclosures Act 2014 to protect workers across all sectors against reprisals in circumstances where they make a disclosure of information relating to serious wrongdoing in the workplace, the correction of which is in the public interest.  This legislation meets and in certain instances exceeds the highest international standards.

Our extensive reform of our Freedom of Information (FOI) regime via enactment of the FOI Act 2014 has substantially restored the legislation to its pre-2003 state.  We have extended FOI to almost all public bodies, and provided for the extension of FOI to non-public bodies in receipt of significant funding from the Exchequer.

We have enacted the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013.  This institutes a comprehensive statutory framework for the Oireachtas to conduct parliamentary inquiries into matters of significant public importance.  This is an important step in clarifying the role of the Houses of the Oireachtas in securing accountability and strengthening our democratic system.

We have recently published the Registration of Lobbying Bill 2014.  This will establish a web based register of lobbying activity and deliver appropriate transparency on “who is contacting whom about what”.  The commencement of the Act is foreseen for mid-summer 2015.

A major overhaul of the ethics legislation is underway.  This aims to support and promote ethical conduct, create an environment in which ethical and conflict of interests are managed effectively, and corrupt and unethical conduct are severely discouraged.

Work is well advanced on a draft Scheme of a Bill which is expected to be published later this year following the approval of the Government.

D/PER is currently working on a Data-Sharing and Governance Bill to provide a better legal basis for information sharing between public service bodies, with associated transparency and governance obligations. This will help to streamline the flow of data between public bodies so as to support better service delivery.

Lastly, Ireland’s participation in the Open Government Partnership (OGP) is an ideal complement the existing domestic objectives and provides an international context to national reform efforts. Work is now underway in implementing Ireland’s first OGP National Action Plan.

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Regulation

Of course, our vision of reform is not exclusively focussed on Government, but must also take account of other critical areas of the economy, including the focus of today’s gathering, the Financial Services’ Sector.

The onset of the financial and economic crisis has brought significant change in the regulatory structure for the financial sector – with increased regulation and developments in the supervisory structure at global and EU levels.

The development of the regulations and accompanying regulatory structures were essential as part of the response to the financial crisis. We cannot go back to the regulatory, rules, structures or thinking which existed prior to the crisis.

Regulation in Ireland is largely influenced by Global and EU measures and Ireland engages strongly with the development of financial services regulation in discussions at EU level.

There has, and continue to be, significant efforts in the Department of Finance and the Central Bank to transpose EU financial services regulatory provisions into national law in a timely manner which provides certainty to the financial services industry.

I will be progressing the ICAV Bill though the Dáil with a commitment to have it implemented by the end of 2014. This will help revolutionize regulation of the funds industry in Ireland.

The Department of Finance and the Central Bank engage in structured consultation regarding the impacts and implications of this legislation for the financial services industry. You should continue to participate in the consultation, through the established channels, where you have specific concerns.

Overall there is a process to ensure that, where possible, the views of the financial sector are considered and recognised in the policy making process.

Indeed, we must be doing it correctly since we range 15^th out of 189 countries by the World Bank in the 2014 annual ranking of national regulatory environments.

Ultimately taking account of the changed regulatory and other environments over the past five or six years, which have impacted on our international financial services, our goal is to be a leading international financial centre underpinned by a leading regulatory model.

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Compliance

Effective and proportionate regulation is important but it cannot be successful without the implementation of the rules being introduced. There is an important role for supervisors in ensuring that not only are regulatory provisions monitored but that there is supervision of the general behaviour of financial firms.

Successful regulation is supported by strong internal governance processes and procedures and an effective compliance culture. Both processes are essential to build trust which is a prerequisite for an effective financial sector.

As I am speaking to compliance officers I will make some brief comments on compliance issues.

Indeed, at its simplest, compliance can be considered as following external regulatory requirements and firm’s internal regulations and policies. Compliance should be part of the business strategy of any financial service firm.

It is important that a compliance culture is in place in all firms including financial services ones.

A strong compliance culture is one where people work in the direction of common objectives, with clear and reliable communication, appropriate monitoring and reporting and the ability to respond and take corrective action as required.

As compliance officers, you are aware of the role and importance of your work in ensuring the better governance and operation of firms.

The Government recognises the importance of having a compliance culture for the intrinsic benefit it brings.

The Government also recognises it as a source of employment and competitive advantage and it is one of the financial services commitments in the Action Plan for Jobs. Should the correct decisions be taken Ireland has the potential to be a significant player in the management of compliance at a European level.

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IFS Strategy

The final area I’d like to focus on is closer to home insofar as it falls directly under my responsibility as the first dedicated Minister of State in the area of Financial Services since the Rainbow Coalition way back in 1994.

As many here may be aware I announced a new strategy for the International Financial Services Sector last month after receiving approval from Cabinet.

Everyone here is acutely aware of the success and the growth of the financial services sector in Ireland over the past 26 years.

Since the setting up the original IFSC by way of Section 30 of the 1987 Finance Act, it has demonstrated an ability to develop its own path and evolve as the regulatory climates, financial market cycles and industry trends changed.

Financial Services in Ireland once again finds itself at a critical juncture, having just emerged from the international financial crisis it finds itself facing more and stiffer competition from around the globe.

By pure coincidence, on the same day I formally announced preparation of a new Strategy, the Global Financial Centres Index showed Ireland dropping further in the rankings of 83 global centres, from a high of 10^th place in 2009 to 70^th today.

While I realize this Index as one amongst many, I take the Index ranking in a constructive light, as the basis for a close inspection of what we can to, not only regain lost ground, but to open up new avenues.

It is my intention that the Strategy will identify achievable actions with clear timelines and accountabilities after the fashion of the Action Plan for Jobs.

My rationale for choosing this model is that a coherent and up-to-date Strategy must be both focused on protecting existing jobs and attuned to new and emerging opportunities to drive further job creation and growth.

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I’ll conclude by returning to my earlier references to sunlight as both disinfectant and medicine.  I believe that the importance of not confusing the two, well describes the balance that must be achieved where a prudent and strong compliance and regulatory culture works to Ireland’s advantage in the highly competitive, global Financial Services market place.

I’ll leave you with that thought as I’m sure ‘getting the balance right’ will feature prominently in your discussions today.

Indeed I would welcome receiving such feedback, perhaps in the form of a submission to the upcoming consultation process accompanying the preparation the International Financial Services Strategy.

On that note, thanks again to Seán (McCrave) for the invite, and I wish you well in your discussions, and in your important role within Ireland’s financial services sector.