Financial Regulatory Authorisation: Doorway Or Barrier To The Irish Market?

1. Introduction

   The Financial Regulator is an Irish statutory body

   established by the Central Bank and Financial Services

   Authority of Ireland Act, 2003 ("the Act"). The Act

   sets out inter alia the powers and duties of the

   regulator in respect of the authorization and supervision of

   financial service and insurance service providers.

   Where the Financial Regulator authorizes an undertaking to

   engage in financial or insurance service activities, that

   authorization represents a State act conferring official

   permission, sanction or approval on the undertaking to perform

   those activities in Ireland, subject to the terms and

   conditions of the authorization and having regard to the

   broader EU and Irish legal/regulatory framework enforced by

   it.

   In exercising its authorization function, the Financial

   Regulator must at all times be mindful of its obligations under

   Irish constitutional law, administrative law and EU law. As a

   matter of Irish law, any grant or refusal of authorization by

   the Financial Regulator is a decision of a public body subject

   to judicial review before the Irish courts. As a matter of

   administrative law, the regulator is required to set out

   reasons for any denial of authorization to an applicant

   undertaking.

2. The Legal Framework Considered

   Under EU law, any State measure requiring a potential

   entrant to hold a licence or authorization is on its face a

   legal/regulatory barrier to entry into the Irish financial

   and/or insurance service markets. It is a matter of fact,

   however, that exercise by the Financial Regulator of its

   authorization function is necessary for, amongst other things,

   the protection of consumer interests and the common good.

   Balanced against this, Ireland is an EU Member State. The

   European Union is committed legally and politically to the

   creation of an internal market where goods and services move

   freely and where EU undertakings enjoy freedom of establishment

   within a legal framework designed to eliminate/reduce

   cross-border obstacles to the free movement of trade in

   services.

   Article 49 of the EC Treaty guarantees the free movement of

   services within a broader legal framework set out in the

   treaty. Article 49 is directly effective as a matter of EC law,

   and as such it engenders legal rights in individuals which may

   be relied upon before the national courts. Any financial or

   insurance service provider is entitled to rely on Article 49 to

   challenge, before the Irish courts or the European Commission,

   the...