SEAR and individual accountability: General Scheme published
The Department of Finance announced details on the long-awaited Individual Accountability Framework (the IAF) including the Senior Executive Accountability Regime (SEAR). SEAR will be introduced on a phased basis but will apply, in the first instance, to:
credit institutions (excluding credit unions)
insurance undertakings (excluding reinsurance undertakings, captive (re)insurance undertakings and Insurance Special Purpose Vehicles)
investment firms which underwrite on a firm commitment basis and/or deal on own account and/or are authorised to hold client monies/assets
Third country branches of the above categories of firms will also fall within the first phase of SEAR.
SEAR will be one of the most impactful regulatory changes of recent years, requiring firms to map regulatory responsibilities to a senior individual within the organisation who is accountable for regulatory contraventions that may occur in their remit. In addition to enhancing the regulator's ability to hold individuals to account for regulatory contraventions, the reforms will impose 'conduct standards' on many individuals working in financial services in Ireland, not just senior executives. You can read more here
AIFMs and UCITS ManCos with MiFID II top ups
AIFMs and UCITS ManCos with MiFID II top ups should continue to comply with their current prudential regime pending further engagement with the Central Bank of Ireland (CBI) on the prudential regime applying (in the context of the Investment Firms Directive and Investment Firms Regulation). You can read the CBI's statement here. You can read more about the Investment Firms Directive and Investment Firms Regulation here
CBI review of compliance with the Market Abuse Regulation and arrangements to prevent market abuse
The CBI published a series of findings and expectations from its industry-wide review of compliance with the Market Abuse Regulation (MAR). This review examined how regulated firms, issuers, and advisors who act on behalf of issuers are meeting their obligations to ensure organisational arrangements are effective in mitigating the risk of market abuse and ensuring market transparency. The review observed some good practices but identified a need for significant improvements. You can read more about this topic here.
Beneficial Ownership developments
The European Union (Modifications of Statutory Instrument No. 110 of 2019) (Registration of Beneficial Ownership of Certain Financial Vehicles) (Amendment) Regulations 2021 SI 321 of 2021, effective 1 July 2021:
oblige CFVs (i.e. ICAVs and unit trusts) to submit the PPSNs of their beneficial owners to the CBI (so as to validate the data on a beneficial owner on the CBI central register)
six month deadline for existing CFVs and new CFVs. Existing ICAVs and Unit Trusts must file PPSNs by 31 December 2021
PPSNs will be safely stored by CBI, rather than being hashed (as is done on the CRO's RBO)
The Investment Limited Partnerships (Amendment) Act 2020 (s.64) provided for PPSNs to be used for this purpose by the amendment of Schedule 5 to the Social Welfare Consolidation Act 2005 to include the following:
Registrar of Beneficial Ownership of Investment Limited Partnerships
Registrar of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts
Registrar of Beneficial Ownership of Common Contractual Funds
A CBI levy on ICAVs and unit trusts to fund the CBI's Register of Beneficial Ownership of Certain Financial Vehicles has been set at €118 per CFV for 2020.
The Central Bank Act 1942 (Section 32D) (Certain Financial Vehicles Dedicated Levy) Regulations 2021 (S.I. 335 of 2021) came into operation on 8 July 2021. The regulations prescribe levies to fund the expenses of the CBI in the implementation and operation of the Register of Beneficial Ownership of CFV. These regulations impact ICAVs and unit trusts which held authorisation in the financial year 2020.