Financial Services Regulation & Compliance - Cross Sectoral June 2018
CBI Governor sets out view on regulation of credit servicing firms
Responding to a request by the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, CBI Governor Philip Lane outlined the CBI's view on the proposed Consumer Protection (Regulation of Credit Servicing Firms) (Amendment) Bill 2018. The Bill proposes a new regulatory regime for owners of credit agreements. The CBI does not support the Bill in its current format; its stated goals of consumer protection can be better achieved through existing frameworks. If loan owners are to be regulated, suggested Governor Lane, the definition of 'retail credit firm' under the Central Bank Act 1997 should be broadened, requiring credit agreement owners to be authorised as retail credit firms.
CBI publishes industry responses to Consultation on moneylender funding levies calculation
The CBI has released three industry responses to its Consultation on a New Methodology to Calculate Funding Levies payable by moneylenders. All three responses agreed broadly with the new methodology. However, one expressed concern that increased funding levies would be passed onto the consumer. Another response suggested that only income from regulated activity be taken into account in calculating the levy.
Department of Business, Enterprise and Innovation releases survey of Irish firms' Brexit concerns
The Department of Business, Enterprise and Innovation has published the results of a survey recording Irish firms' Brexit concerns. Compared with other sectors, financial services firms reported above-average levels of concern. Brexit impacts causing the most worry were, in order:
- restrictions on providing or receiving a service from the UK
- restrictions on real estate investments or purchases, or securities investments
- restrictions on taking an active part in managing UK companies
- restrictions on owning or investing in UK companies
- removal of or a change in the reciprocal entitlement to seek a job permit-free in the UK or Ireland
Data Sharing and Governance Bill 2018 enters Second Stage
The Bill has passed to the Second Stage of the Seanad. The Bill aims to regulate the sharing of information, the management of information by public bodies and the collection of public service information.
Money Laundering Bill passes Committee Stage
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 passed the Second Stage in the Dáil and was referred to the Select Committee on Justice and Equality for Committee Stage. The Bill passed the Committee Stage with amendments. The Committee extended the Bill's scope to persons carrying on the business of a cheque cashing office, introducing a requirement for such persons to register as designated persons with the CBI.
The Bill has been scheduled for the Report and Final Stages at the Dáil in early July 2018.
Trade Secrets Directive transposed
The European Union (Protection of Trade Secrets) Regulations 2018 [S.I. No. 188 of 2018] were enacted, transposing the EU Trade Secrets Directive (2016/ 943) into Irish law. The Regulations govern the acquisition, use and disclosure of trade secrets. They also set out measures, procedures and remedies for the unlawful acquisition, use of disclosure of trade secrets.
Bill proposes mandatory reporting of gender pay gaps
The Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017 is currently in the Committee Stage of the Seanad. The Bill proposes to amend the Irish Human Rights and Equality Commission Act 2014 by requiring organisations with more than 50 employees to publish information relating to the nature and scale of any gender pay gaps between employees.
ODCE publishes annual report
The ODCE released its Annual Report for 2017. The Report provides an overview of the ODCE and its primary activities, such as enforcement actions and engagement with government Ministries and Oireachtas Committees.
Commission proposes regulation clarifying law applicable to third-party assignment of claims
Seeking to provide legal certainty in cross-border transactions in claims and securities, the Commission has proposed a regulation that would designate which national law will apply to the ownership of a claim once it has been assigned to a third party on a cross-border basis. The regulation proposes rules around factoring, collateralisation and securitisation.
Council Presidency releases progress reports on proposed regulations and directives
The Bulgarian Presidency of the Council has published a report outlining its progress since January 2018 on addressing technical aspects of several proposed regulations and directives including:
- a directive on credit servicers, credit purchasers and the recovery of collateral
- a regulation to establish a European Deposit Insurance Scheme
- a regulation amending Regulation 806/2014 as regards loss-absorbing and recapitalisation capacity for credit institutions and investment firms (SRMR II)
- a regulation amending Regulation 575/2013 as regards minimum loss coverage for non-performing exposures
- a regulation amending Regulation 575/2013 as regards leverage ratio, net stable finding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposure to central counterparties, exposure to collective investment undertakings, large exposures, reporting and disclosure requirements
- a Directive to amend Directive 2013/36 as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures
European Parliament and Council propose regulation amending Regulation (EU) No. 1092/2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board
The European Parliament and Council have proposed a regulation to amend Regulation 1092/2010 to contend with changes to the macro-prudential framework and regulatory developments. The new regulation will enable the ESRB to oversee the entire financial system. The efficiency and effectiveness of the ESRB is directly related to the EU's coordination of macro-prudential policies and will ensure the ESRB can better fulfil its mandate.
EBA launches consultation paper on draft guidelines for exemption from contingency measures
The EBA has invited responses to its draft guidelines on the conditions to be met for an exemption for contingency measures under Article 33(6) of Commission Delegated Regulation 2018/389. Article 33(6) sets out an exemption to the requirement for payment services firms to have contingency measures in place under the second Payment Services Directive (PSD2).
EBA publishes opinion on implementation of RTS on strong customer authentication and common and secure communication
The EBA has published an opinion on the implementation of regulatory technical standards on strong customer authentication and common and secure communication. Both of these principles are new security requirements under PSD2. The opinion emphasises that, in order to comply with the RTS, payment service providers will need to amend their hardware and software systems or develop new ones.
EBA launches consultation on draft guidelines on outsourcing
The EBA has opened a consultation on draft guidelines which will review the existing CEBS guidelines on outsourcing. The consultation is open until 24 September 2018. The guidelines cover credit institutions, investment firms, electronic money institutions and payment institutions.
Council adopts general approach to proposed EU Cybersecurity Agency
The Council has settled on an amended text of a Commission proposal for a regulation creating an EU Cybersecurity Agency and common cybersecurity certification schemes. Having concluded these amendments, the Council has mandated the Bulgarian Presidency to begin negotiating with representatives from the European Parliament and European Commission.
EBF co-signs a letter in relation to the EU cybersecurity certification proposal
The European Banking Federation (EBF) has encouraged European decision-makers to ensure the proposed EU cybersecurity certification framework will be flexible and future-proof. The Cybersecurity Act intends to enhance EU's cybersecurity framework, making the Union far more competitive globally. The EBF makes a number of recommendations to the European Parliament including making sure global standards prevail to retain certainty for market players.
European Data Protection Supervisor and new European Data Protection Board conclude MoU
An MoU has been concluded between the European Data Protection Supervisor (EDPS) and the European Data Protection Board (EDPB). The EDPB has been established under the new General Data Protection Regulation and will be made up of Member States' national supervisory authorities. The MoU sets out the tasks and internal organisation of the EDPB. It also outlines the responsibilities of the EDPS in relation to the ESPB.
CBI opens consultation on proposal to consolidate and amend Transparency and Market Abuse Rules
The CBI launched CP 121: Consultation on Amendment to Central Bank Market Abuse and Transparency Rules and Consolidation into Central Bank (Investment Market Conduct) Rules. The proposal would consolidate the CBI's Transparency Rules and Market Abuse Rules into one Statutory Instrument, subject to certain amendments. Existing Guidance on these topics will be maintained, also subject to certain amendments. The CBI has therefore opened a consultation to elicit feedback from stakeholders on the key material amendments.
Agreement reached on new anti-money laundering rules
The Council, Parliament and Bulgarian Council Presidency have reached agreement on new rules on the use of criminal law to combat money laundering. The rules set out minimum standards for the definition of money laundering criminal offences, establish common provisions to facilitate cross-border police and judicial cooperation and align EU rules with international obligations such as those arising from the Council of Europe Convention on Money Laundering. The framework sets a maximum imprisonment term of four years for money laundering offences and sets out aggravating circumstances applicable to cases linked to criminal organisations or certain professional activities.
European Commission and United Kingdom publish joint statement outlining further progress in Article 50 negotiations (IP/18/4217)
The European Commission and the United Kingdom published a Joint Statement this month outlining the progress that has been achieved on the terms of the draft Withdrawal Agreement since the negotiation round that took place on 16-19 March 2018.
Fifth Anti-Money Laundering Directive published in Official Journal of European Union
The Fifth Anti-Money Laundering Directive (MLD5) has now been published in the Official Journal of the European Union. MLD5 was published on 19 June 2018 and will enter into force on 9 July. EU Member States will then have until 10 January 2020 to implement MLD5 into national law.
EBA updated two guides on supervisory data
The EBA methodological guide on how to compile risk indicators and detailed risk analysis tools and the EBA guidance note on compiling IMF FSIs with EBA ITS data have been updated. The guides have changed to comply with amendments enacted by IFRS 9
European Parliament publishes resolution on the Green Paper on Retail Financial Services
The European Parliament has published a resolution of 22 November 2016 on the Green Paper on Retail Financial Services. The Parliament welcomes Green Paper and makes a number of recommendations in the area of retail financial services such as recommending the simplification of legislation should be continued especially in the insurance sector and encouraging the update and promotion of the FIN-NET financial dispute resolution network.
Council agrees on negotiating stance in relation to Commission's proposal on cross-border payments
The Council has agreed its position on the Commission's proposal to make cross-border payments in euro cheaper across the EU. High fees are placed on cross-border payments in euros from non-euro countries while cross-border and national transactions in euros cost the same price in the euro-area. The proposal will ensure that all intra-EU cross-border payments in euro outside the euro area will now be priced identically as national payments in the local official currency. This will aid competition and will help consumers compare costs of different conversions options.
For further information please contact a member of the Financial Regulation team.
Date Published: 10 July 2018