Asset Management & Investment Funds Q&A - Feb 2021

Question:

What are the CBI's supervisory priorities for 2021?

Answer:

The Central Bank of Ireland (CBI) published its first Securities Markets Risk Outlook Report in February 2021. It outlines the CBI key supervisory priorities for supervisory markets in 2021.

It also details key conduct risks in securities markets and the actions firms should take to identify, mitigate and manage them.

These include:

  • external shocks, the transition to a greener securities market, misconduct risks and increasing complexity
  • firms must ensure meaningful transparency, robust governance arrangements and enhance data quality

The CBI has planned a number of work items that relate specifically to the risk outlook published in the report.

These include:

  • an industry-wide review of compliance with the Market Abuse Regulation
  • further work arising from findings in the CBI's 2020 thematic reviews in the funds sector including the findings from its review of Fund Management Companies’ Governance, Management and Effectiveness and the ESRB/ESMA Review of Corporate Bond and Property Funds
  • complete CBI follow up actions to the ESMA CSA on Liquidity Management in UCITS
  • launch a new CSA along with ESMA colleagues and fellow EU regulators, on UCITS costs and fees (discussed under Irish developments)
  • further implementation of the MMFR and SFTR requirements
  • continued work with ESMA to improve the data architecture that supports CBI work
  • commence work to support the creation of a central ESMA database of funds marketing throughout the EU (discussed under EU & International Developments)

Key topics where CBI supervisory perspectives will inform its wider policy work in 2021 will include:

  • work on potential reform of the framework for money market funds and the wider consideration of a better macro-prudential framework for investment funds
  • reviews of MAR, MIFID and AIFMD
  • the development and implementation of the framework for sustainable finance
  • work with IOSCO, undertaking a review of conduct–related issues in relation to index providers, with a specific focus on the asset management industry 
  • enhancing international coordination in the supervision of conduct risk in wholesale securities markets, with a particular focus on improved EU supervisory convergence and continued cooperation under the IOSCO Multilateral Memorandum of Understanding

CBI speech on governance and risk

Deputy Governor Sibley addressed the Institute of Directors on "Governance and risk in a time of uncertainty and change". Deputy Governor Sibley's address is aimed at boards and directors (and specifically at governance and risk management). It includes a summary of some of CBI's key regulatory and supervisory priorities for 2021.

Key topics include:

  • climate change
  • governance and risk management
  • accountability and decision making (highlighting the enhanced Individual Accountability Framework)
  • diversity & inclusion (CBI will continue to require improvements and undertake detailed and thematic reviews)
  • technology and innovation

For more information please contact a member of the Asset Management & Investment Funds team.

Date published: 26 February 2021