Financial Services Regulation and Compliance - Investment Firms January 2023
Domestic
Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2023 (S.I. No. 10 of 2023)
On 23 January 2023, the new 2023 regulations were published and will come into operation on 1 July 2023. The 2023 regulations will revoke and replace the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1))(Investment Firms) Regulations 2017. The 2023 Regulations contain amendments to the existing client asset requirements, which are set out in Part 6.
The CBI expects both investment firms and credit institutions to have commenced preparations in accordance with the 2023 regulations.
Part 6 of the 2023 regulations will come into effect on 1 January 2024, to the extent that it applies to credit institutions.
European
ESMA consults on post-trade transparency
On 19 January, ESMA published a consultation paper, seeking feedback on certain technical issues to provide further guidance in its future manual on post-trade transparency.
The consultation paper focuses on the new Level 3 guidance that will be included in the manual, which is meant to provide further clarifications on:
- issues related to post-trade transparency to improve the consistency and usability of the information published
- the reporting to ESMA’s Financial Instruments Reference Data System - FITRS - for the performance of the transparency calculations
The manual will provide a general overview of the post-trade transparency regime for equity, equity-like and non-equity instruments and will include in one single document:
- legal references of Level 1 (MiFIR / MiFID II)
- legal references of Level 2 (RTS 1 and RTS 2)
- legal references of Level 3 (Opinions/Guidelines)
- guidance included in previously published Q&As
- new Level 3 guidance
The European Commission adopted RTS 1 and RTS 2 on 17 January 2023. ESMA sent a positive opinion on the latter regulatory technical standards at the end of 2022. Interested parties are invited to send their feedback by 31 March 2023.
ESMA and National Competent Authorities (NCAs) to examine marketing of financial products
ESMA is launching a common supervisory action (CSA) with NCAs on the application of MiFID II disclosure rules with regard to marketing communications across the EU. The CSA will be conducted during the course of 2023.
NCAs will review whether marketing communications, including advertisements are fair, clear and non-misleading and how firms select the target audience for marketing communications, particularly in relation to more complex investment products.
The CSA will also be an opportunity to collect information about 'greenwashing practices' which may be observed in marketing practices and advertisements.
ESMA issues its first Opinion on the draft European Sustainability Reporting Standards
On 26 January 2023, ESMA issued an opinion on the first set of draft European Sustainability Reporting Standards (ESRS Set 1) developed by the European Financial Reporting Advisory Group (EFRAG). ESMA found that ESRS Set 1 broadly met the objectives of being conducive to investor protection.
ESMA advised that in order to bring the ESRS Set 1 from broadly capable to fully capable of meeting the objective of investor protection, the European Commission needs to address the selected technical issues which it has set out in the opinion.
Most notably, the issues relate to improvements of the level of consistency with the requirements of the Corporate Sustainability Reporting Directive and other EU legislation.
The Commission will consider ESMA's opinion and opinions from the EBA, EIOPA and other public bodies and adopt ESRS Set 1 into delegated acts by 30 June 2023.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 8 February 2023