Asset Management & Investment Funds: Irish Practice Developments - May 2018
Some approaching compliance deadlines:
- 26 June 2018. AML/CTF - ESA joint guidelines on simplified and enhanced due diligence. The Central Bank expects firms to comply with the ESA joint guidelines on simplified and enhanced due diligence by 26 June 2018.
- 29 June 2019. CP119 - Deadline for responses to Central Bank Consultation CP119 on amendments to (and consolidation of) the Central Bank UCITS Regulations.
- 1 July 2018. CP86 - Existing Fund Management Companies (UCITS ManCos, AIFMs, self-managed UCITS and internally managed AIFs) must comply with the new rules which derive from CP86 by 1 July 2018.
- 21 July 2018. MMF Regulation - The MMF Regulation must be implemented by EU Member States by 21 July 2018. The MMF Regulation introduces new requirements for MMFs in particular, portfolio composition, valuation of assets, diversification, liquidity management and credit quality of investment instruments. Existing UCITS and AIF MMFs must comply with the new rules by 21 January 2019.
- 31 August, 2018. Fund Profile return - The first Central Bank Fund Profile return is to be prepared for the period up to 30 June 2018, with a submission deadline (via ONR) of 31 August 2018. This 30 June 2018 return applies to all sub-funds authorised by the Central Bank at 30 June 2018 whether they are dormant, have assets or have not launched. The Fund Profile return replaces the IF Annual Sub-Fund Profile return. All sub-funds, regardless of whether the IF Annual Sub-Fund Profile return to 31 December 2017 has already been submitted to the ONR, will be required to submit the new updated return for the period up to 30 June 2018. Subsequent Fund Profile returns are to be prepared for the period to 31 December. These Fund Profile returns will also carry a submission deadline of 28 February. In 2018 alone, in addition to the 30 June 2018 return, a Fund Profile return will be required made up to 31 December 2018. This additional return will have a submission deadline of 28 February 2019. The Central Bank does not anticipate that the Fund Profile will change from year to year, as changes would most probably reflect changes within the Fund's offering documents. Therefore, year-to-year updates to the Fund Profile are expected to be minimal and reflect significant changes to a Fund's profile.
- 1 September 2018. Money Market Funds - Money Market Funds which are availing of a transitional period must submit all documents requiring review to the Central Bank no later than 1 September 2018.
- 30 November 2018. Filing Annual accounts of Variable Capital Companies in CRO - The Companies (Accounting) Act 2017 obliges UCITS investment companies and AIF investment companies to file annual accounts for financial years commencing on or after 1 January 2017 with the CRO within eleven months of the relevant financial year end. By 30 November 2018 we will see the first such accounts being filed.
- 1 January 2019. Benchmarks Regulation - Prospectuses of UCITS and of funds which are subject to the Prospectus Directive, which reference a benchmark and which have been approved prior to 1 January 2018, will need to be updated at the next update and in any event by no later than 1 January 2019 to include information on the benchmark.
- 1 January 2019. Securitisation Regulation - The AIFMD and the UCITS Directives will be amended as of 1 January 2019 to align with the new securitisation regime which imposes due diligence, transparency and risk retention requirements for investments in securitisations as detailed here.
Central Bank Anti-Money Laundering Bulletin
The Central Bank of Ireland (Central Bank) published an Anti-Money Laundering Bulletin following supervisory engagements with investment firms.
The Central Bank bulletin:
- identifies a number of emerging trends which impact on risk
- points out that all additional or changing risks associated with any new product should be assessed prior to launch and that documentation be updated accordingly
- reminds designated persons that the ESA Risk Factor Guidelines should be implemented by 26 June 2018
- identifies some Central Bank expectations in respect of AML/CFT risk assessments
- identifies some Central Bank expectations in respect of PEP screening and transaction monitoring
- identifies some Central Bank expectations in respect of resourcing and training.
- sets out some Central Bank findings on AML/CFT risk assessments
- sets out some Central Bank findings on PEP & financial sanctions screening and transaction monitoring
- sets out some Central Bank findings on resourcing and training
While the bulletin contains information on the Central Bank’s supervisory engagements with Investment firms, it will also be of interest to firms operating in other sectors.
Central Bank AIFMD Q&A
The Central Bank of Ireland (Central Bank) published the Thirtieth Edition of the Central Bank AIFMD Q&A
Q&A 1083, which concerns loan originating QIAIFs (LOQIAIFs) and reporting obligations under the Central Credit Act 2013, has been updated. The Q&A clarifies that a LOQIAIF's activities, in so far as they relate to the provision of credit, may fall within the scope of the Credit Reporting Act 2013 and that LOQIAIFs should refer to the Act for further clarification. Credit applications or credit agreements are covered by that Act where:
- the applicant for provision of credit or the person for whom the credit is provided under the credit agreement is resident in the State at the time when the credit application or credit agreement is made; or
- the law governing any credit agreement made pursuant to the application would be, or the law governing the credit agreement is, the law of the State.
With effect from 31 March 2018, providers of business loans are required to report to the Central Credit Register.
Central Bank Consultation on Corporate Governance Requirements For Investment Firms and Market Operators
The Central Bank issued CP 120 on Corporate Governance Requirements For Investment Firms and Market Operators. In 2015, the Central Bank issued consultation CP94 on corporate governance requirements for investment firms and market operators. The Central Bank did not finalise its requirements at that time because of European Commission delay in implementing MiFID II and MiFIR. The Central Bank has now issued this second consultation paper (CP120) which has updated requirements to reflect MiFID II and MiFIR, and responses received on CP94. The closing date for CP120 is Tuesday, 31 July, 2018.
Irish Funds GDPR Working Group
The Irish Funds GDPR Working Group published its fourth bulletin which outlines industry discussion on GDPR with the Data Protection Commissioner, Helen Dixon, and the Deputy Commissioner, Dale Sunderland. Key topics included:
- Encouraging the industry to take the time to carry out the analysis, justify and make decisions and document what is adopted with respect to GDPR as this will be the key to providing evidence of compliance with the GDPR.
- Legal Basis for Processing
- Extra-Territorial Scope
- Record Management
- Data Protection Officer
- Data Protection Impact Assessments
- Breach Notifications
Central Bank Markets Update
The Central Bank published issue 7 of 2018 of its Markets Update on 04 May 2018 . Some topics are listed below.
- Innovation and technology in financial services: a regulatory perspective - Director General Financial Conduct Derville Rowland
- Central Bank publishes Thirtieth Edition of the Central Bank AIFMD Q&A Document (see above)
- RegTech Roundtable on 5 April
- Supplementary Post Trade Deferral Regime under Regulation (EU) No 600/2014 (“MiFIR”)
- RegTech in Securities and Markets Regulation - Colm Kincaid, Director of Securities and Markets Supervision
- Brexit: Where to Next? - Deputy Governor Ed Sibley
- The Role of the Central Bank in Consumer Protection- Director General, Financial Conduct Derville Rowland
- The Asset Management Sector– supervisory insights with a changing landscape - Michael Hodson, Director of Asset Management Supervision
- Capital Markets Union - An updated regulatory perspective - Gerry Cross, Director of Policy and Risk
- The Asset Management Sector – insights on the regulatory landscape - Michael Hodson, Director of Asset Management Supervision
Updated Revenue Guidance for investment undertakings
The Irish Revenue Commissioners issued an updated e-brief on Investment Undertakings which reflects the following (among other things):
- Changes to the taxation of Investment Limited Partnerships (Finance Act, 2013)
- The inclusion of ICAVs within the gross roll up regime (ICAV Act 2015)
- The ability of NTMA to make certain declarations (NTMA (Amendment) Act 2014)
- That Revenue declarations can be accepted in scanned format (provided that some administrative conditions are met).
Updated FATCA/CRS self-certification forms
The Irish Funds FATCA/CRS Working Group updated the Irish Funds FATCA and CRS self-certification forms for both individuals and entities. Amendments include revised legislative references for GDPR and some minor formatting changes including revised links to external Revenue guidance and legislation.
Where the Irish Funds self-certification forms for FATCA and CRS are being used for due-diligence purposes, the new version of the forms should be used from 25 May 2018. Where the self-certification forms are incorporated into the relevant fund application forms, the application forms should also still contain the detailed GDPR disclosures and privacy statements in addition to the information referenced within the self-certifications. Forms are available for:
- Individual Self-Certification for FATCA and CRS
- Entity Self-Certification for FATCA and CRS
- Individual Self-Certification for CRS
- Entity Self-Certification for CRS
Central Bank Strategy, Annual Report and Speeches
- The Central Bank is developing its new Strategic Plan (Strategy 2021) for the next three years and is inviting public engagement by 8 June 2018.
- The Central Bank published its 2017 Annual Report
- The Central Bank published its 2017 Annual Performance Statement
- Central Bank Deputy Governor Sharon Donnery delivered a speech noting that the Central Bank will challenge supervised firms over lack of diversity at board and management levels.
- Central Bank Director General Financial Conduct, Derville Rowland, delivered an address at the Irish Funds Global Annual Conference
- Central Bank, Deputy Governor Ed Sibley delivered an address on the provision of financial services in Ireland and from Ireland after Brexit
For more information please contact a member of the Asset Management & Investment Funds Team.
Date publised: 01 June 2018