Tracker, Financial Services Regulation & Compliance - Cross Sectoral


DOMESTIC:

Central Bank publishes Guidance for Completion of the AML Risk Evaluation Questionnaire

The Guidance which is aimed at Credit and Financial Institutions who are required to file a Risk Evaluation Questionnaire ("REQ"), provides information on the structure and content of the REQ and provide clarity for relevant fields contained within the REQ.

Central Bank publishes responses received to its Discussion Paper on the Payment of Commission to Intermediaries

Fifteen responses were received by the Central Bank. Based on the responses received and the Central Bank's analysis of payment of commission to intermediaries, the Central Bank will examine proposing additional measures to strengthen protections for consumers under the following headings: the acceptance and retention of commissions by intermediaries describing themselves as ‘independent’; ways to mitigate product and producer bias where commission is paid; and where commission amounts are based on the volume of the product sold, including override commissions.

Central Bank publishes Authorisation Requirements and Standards for Retail Credit Firms

Part A of the document sets out the authorisation requirements and standards that must be complied with by an applicant seeking authorisation to carry on the activities of a Retail Credit Firm. Part B of the document lists certain other regulatory requirements which apply to Retail Credit Firms and which Retail Credit Firms should be aware of in relation to the provision of Retail Credit Firm activities.

Central Bank publishes a Report on Findings of Thematic Fitness and Probity Inspections in Credit Unions

The Report identified a number of issues including: a minimalist compliance approach in an unacceptably large number of credit unions visited, with limited demonstration of quality and completeness of due diligence on prospective role holders; lack of meaningful succession planning; and failure to document processes and to maintain due diligence records on file, resulting in a lack of evidence to support compliance.

Central Bank publishes an industry letter in relation to fitness and probity inspections

The industry letter outlined key findings identified during the thematic inspections including: a failure by some credit unions to establish processes for compliance with the requirements of the F&P regime (such as the requirement to undertake due diligence on Controlled Function role holders); a lack of understanding of the oversight role of the Nomination Committee; and a lack of documentation of both F&P compliance and due diligence compliance.

Sharon Donnery, Deputy Governor (Central Banking) at the Central Bank discusses the resolution of Non-Performing Loans (NPLs) in the euro area

Ms. Donnery speech focused on how ECB Guidance provides a common standard for NPL management across the euro area, the necessity for experience and ownership at board level, the capacity gaps that exist in terms of implementation, (and how these should be addressed). Ms. Donnery also discussed a number of national practices that pose a considerable challenge to the timely reduction in non-performing loans in some Member States.

Central Bank publishes Credit Union Newsletter, Issue 6

The newsletter addressed topics such as merged credit unions leveraging their increased scale to achieve greater operating efficiencies, viable business models for the future, on-site Engagement 2017, cybersecurity and the AnaCredit Regulation.

Central Bank publishes Notes on Compilation in relation to the AnaCredit Counterparty Reference Data Return

The notes on compilation are designed to assist reporting agents complete the AnaCredit Counterparty Reference Data Return (ACPRD) which will become effective from 31 December 2017.

Department of Finance publishes Overview of New Regulation on Beneficial Ownership

The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 transposes the first sub-paragraph of Article 30(1) of the Fourth Anti-Money Laundering Directive. The Overview sets out the background and main features of the new regulation.

Philip R. Lane, Governor of the Central Bank, addresses the London Irish Business Society on "International Policy Trilemmas"

Governor Lane speech focused on the three so-called trilemmas which capture the tensions in determining policy choices in an integrated world economy. He also remarked that in relation to monetary policy, Brexit does not alter the status quo, which no commitment on either side to stabilise the value of Sterling against the euro and the Bank of England and the European Central Bank each pursuing an independent monetary policy.

Financial Services Ombudsman publishes Strategic Plan for 2017

The Strategic Plan states that the key aim for 2017 is to continue to resolve disputes at an early stage and with the minimum necessary formality. The Strategic Plan also outlines the structure of the FSO, their mission statement, strategic objectives, targets and criteria and resources. 

Competition and Consumer Protection Commission launches Consultation on the Irish mortgage market 

The CCPC is examining the market structure, legislation and regulation of the mortgage market in Ireland and will outline options on how Ireland can develop a better-functioning, more sustainable mortgage market.  The Consultation will close on 20 March 2017.

Central Bank publishes transcript of Governor Philip R. Lane interview with the Wall Street Journal

The interview addressed topics such as accommodative monetary policy, interest rates, passporting after Brexit and the Bank Resolution and Recovery Directive.

Bernard Sheridan, Director of Consumer Protection in the Central Bank addresses Members of the European Federation of Insurance Intermediaries on the topic of Consumer Protection

The speech focused on consumer protection in relation to how intermediaries are paid, the minimum competency standards for staff dealing with consumers and finally the new product oversight and governance requirements which are coming into force.

Central Bank publishes Consumer Protection Outlook Report

The Report identifies key priorities for the Central Bank this year including the Tracker Mortgage Examination; the review into the payment of commissions to intermediaries; an examination on how technology-driven innovation relates to existing Central Bank Codes; a review of the Consumer Protection Code for Licensed Moneylenders; conducting a series of targeted consumer protection risk assessments on a range of firms, with a focus on culture, performance management, sales incentives and product oversight and governance; and undertaking themed inspection of the sale of niche/add-on insurance products, retail intermediaries’ compliance with minimum standards, payment institutions’ safekeeping of client funds and retail intermediaries which are acting as managing general agents on behalf of insurance companies.

Central Bank releases a new Research Technical Paper entitled “Countercyclical Capital Regulation in a Small Open Economy DSGE Model”

The Paper assesses the macroeconomic performance of different ways in which a regulator might adjust the countercyclical capital buffer banks are subject to.

Colm Kincaid, Head of Consumer Protection Policy & Authorisations at the Central Bank, gives keynote address at the FinTech and Payments Association of Ireland's Authorisation Workshop

Mr. Kincaid gave an overview of the authorisation process for the authorisation and supervision of Payment Institutions and Electronic Money Institutions under the Payment Services Directive and the Electronic Money Directive as well as outlining the Central Banks's policy approach and supervisory approach towards such institutions.

Governor Philip R. Lane of the Central Bank addresses the Cork Chamber of Commerce on "Prospects for the Irish Economy"

Governor Lane provided an overview of the Central Bank's latest projections for the economy and discussed some external challenges facing the economy. He also addressed the Central Bank's policy role in underpinning financial stability by making sure that capital ratios and liquidity ratios are sufficient for banks to withstand adverse shocks, setting additional capital buffers for banks and enacting borrower-based measures to mitigate the risks associated with boom-bust financial cycles.

Philip R. Lane, Governor of the Central Bank gives a speech entitled "The Role of Financial Regulation in Protecting Consumers"

The speech covered the underlying theoretical case for regulatory interventions to protect consumers, the institutional framework for consumer protection at domestic and international levels, how the Central Bank implements the consumer protection agenda and the Central Banks's current priorities in its consumer protection work.

Sharon Donnery, Deputy Governor of the Central Bank gives perspectives on the impact of Brexit

The speech addresses the macroeconomic context of Brexit, the possible financial stability considerations from potential changes to the Irish financial services sector and some of the challenges for cross-border regulation going forward such as the need to ensure that any migration of firms does not lead to a more fragmented or disjointed supervisory system . Ms. Donnery concluded that considerable uncertainty remains in relation to the macroeconomic assessment. She also stated that new business lines and new firms brings new opportunities, new challenges and new risks for the economy and that these factors need to be considered in the context of European or global financial markets.

Minister of State Eoghan Murphy gives opening address to the Irish Centre for European Law on the implications of Brexit for financial services

Minister Murphy key points were that Ireland must build new and different alliances within the EU to advance our legislative priorities and highlight our concerns and that an orderly process to the Article 50 negotiations must be ensured.

Central Bank publishes Regulatory Service Standards Performance Report: July - December 2016

The Report sets out the Bank’s performance against Service Standards that it has committed to in respect of (a) authorisation of Financial Service Providers and Investment Funds, (b) processing of Probity Pre-Approval Controlled Function Individual Questionnaire applications and (c) contact management. The Service Standards were met or exceeded for all of the targets for which applications were received.


EUROPEAN:

European Covered Bond Council publishes response to the treatment of derivatives associated with the cover pool of covered bonds or with securitisations in the draft proposal for a Regulation published by the Commission

The proposal for a Regulation on simple, transparent and standardised (STS) securitization amends the EMIR Regulation, the UCITs Directive, Solvency II Directive, AIFMD and the Credit Rating Agency Regulation. The ECBC stated that the proposal interferes with the provisions on covered bonds derivatives, which are already effective as part of the framework regarding the clearing obligation under EMIR and that the proposal interferes with the current definition of covered bonds which is contained in the UCITS directive.

International Organization of Securities Commissions publishes Research Report on Fintech

The report concludes that there is significant technology-driven change in the offering of financial services and Fintech applications are developing at an increasingly faster pace, creating new opportunities to achieve better outcomes for investors. However, as with any change, new risks and vulnerabilities may arise.

International Organization of Securities Commissions publishes the Second Review of the Implementation of IOSCO's Principles for Financial Benchmarks in respect of the WM/Reuters 4 p.m. Closing Spot Rate

The Principles for Financial Benchmarks are a set of recommended practices that should be implemented by benchmark administrators and submitters. The purpose of the report was to outline the findings of a second IOSCO Review Team tasked with assessing the extent to which the recommendations from the original review have been implemented as of 8 September 2016. Overall, the Review Team found that the vast majority of recommendations have now been put into practice.

European Economic and Social Committee publishes Opinion on the 'Proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC'

The EESC Opinion welcomed in principle the measures included in the Proposal. The EESC also made a number of recommendations such as, for example, that either a new list of high-risk third countries be drawn up which included countries acting as tax havens or the scope of the enhanced due diligence measures under the 5th anti-money laundering directive is broadened; that there should be closer cooperation between the various intelligence and security services of the Member States and Europol; and that the definitions and penalties of money laundering crimes should be harmonized.

European Systemic Risk Board makes recommendations on closing real estate data gaps

The ESRB recommended that national macroprudential authorities: implement a risk monitoring framework for the domestic residential real estate sector; monitor the univariate distribution and the selected joint distributions of the indicators specified in the Recommendation; monitor the risk arising from the commercial real estate sector; monitor the relevant indicators as specified in templates in the Recommendation; and that the European Supervisory Authorities should publish the exposure of entities subject to their supervisor to mational commercial real estate markets.

The three European Supervisory Authorities publish a joint Opinion on the risks of money laundering and terrorist financing (AML) affecting the European Union's financial sector

The Opinion, addressed to the European Commission, found that problems exist in relation to firms' understanding and management of the AML risk they are exposed to and their implementation of customer due diligence policies and procedures. The Opinion also highlighted the difficulties associated with the lack of timely access to intelligence that might help identify and prevent terrorist financing, and the considerable differences in the way competent authorities discharge their functions.

European Mortgage Federation and European Covered Bond Council publishes position paper on interdependent assets and liabilities in the European Commission’s Proposal for a regulation (EU) No 575/2013 as regards the Net Stable Funding Ratio

The EMF/ECBC recommended that only high quality covered bonds should be regarded as interdependent for the purpose of the Net Stable Funding Ratio. The EMF/ECBC also recommended amendment to the proposal to make the Net Stable Funding Ratio rules consistent with the Liquidity Coverage Requirement.

Egmont Group publishes its Annual Report - 2015-2016

The Egmont Group is a global organisation of 151 financial intelligence units which combats money laundering and terrorist financing (AML) by exchanging operational financial intelligence. The Annual Report provided an overview of the work of the Egmont Group, the structure of the group, the group's response to terrorist financing, key results, regional developments and the winners of the best Egmont case award.

Three European Supervisory Authorities launch a public consultation on draft regulatory technical standards (RTS) in relation to the appointment of a Central Contact Point to combat money laundering and terrorist financing

The ESAs' draft RTS set out the criteria Member States will consider when deciding whether foreign payment service providers and electronic money issuers should appoint a CCP, and list the functions this CCP should perform. The Consultation will close on 5 May 2017.

Three European Supervisory Authorities launch a consultation on a proposal to set minimum requirements that manufacturers of packaged retail and insurance-based investment products with environmental or social objectives should comply with

The Consultation Paper provides stakeholders with an opportunity to comment on the draft Technical Advice developed by the ESAs on the procedures to be used to establish whether a PRIIP targets specific environmental or social objectives The consultation closes on 23 March 2017.

Egmont Group publishes Co-Chairs' Statement - Intersessional Meeting of the Egmont Group of FIUs

The Egmont Group of Financial Intelligence Units (FlUs) met In Doha, Qatar to discuss the challenges faced by FlUs in combating money laundering, associated predicate offences and terrorist financing. Several bilateral information sharing arrangements were signed between Egmont members and there were in-depth discussions and training sessions for participants on relevant topics in order to further the development of the international FIU network. In addition an E-learning Tool for Operational Analysis in Spanish and English was launched.

Committee on Payments and Market Infrastructures publishes a Report on distributed ledger technology in payment, clearing and settlement

The Report found that Central banks and other authorities should weigh the risks of using blockchain and other distributed ledger technology (DLT) in payment, clearing and settlement against potential cost and efficiency savings offered by the technology. It contains a set of key questions that may be useful to authorities and others to consider when looking at DLT arrangements.

For further information please contact a member of the Financial Regulation team.

Date published: 03 Mar 2017