Tracker, Financial Services Regulation & Compliance - Cross Sectorial

DOMESTIC

Central Bank of Ireland welcomes IMF assessment of the stability of the Irish financial sector
The CBI has welcomed the results of the IMF's first review of Ireland's financial sector following the financial crisis. The IMF have concluded that the CBI has been "effective and vigorous in strengthening prudential regulation and supervision" since the financial crisis. The CBI has commented on the financial vulnerabilities pointed out by the IMF – which include the negative effects of the UK vote on the Irish financial system and highly indebted Irish households - and has stated that it will consider any recommendations made. The IMF also encouraged the CBI to continue the innovation, monitoring and collaboration with other agencies which is a current feature of the Irish funds industry.

Central Bank of Ireland publishes third quarterly bulletin of 2016
The CBI has published its Q3 quarterly bulletin, examining recent trends in the economy and forecasts. In the context of the UK vote to leave the EU, the CBI has decided to cut its growth predictions by 0.2% for 2016 and 0.6% for 2017 due to Brexit. The CBI has made it clear that Brexit will have a negative impact on the Irish economy.

Central Bank of Ireland publishes SME Market Report for Q1 2016
The CBI has published the figures for new lending to non-financial, non-real-estate SMEs which increased by 4.8% in the year to Q1 2016. The CBI reports that interest rates on non-financial corporation loans under €250,000 remain high relative to euro area averages. The stock of credit has declined by 5.3% in the last quarter and the SME lending market remains highly concentrated. Rejection rates are now in line with the euro area average after a decline.

Central Bank of Ireland publishes discussion paper on the Payment of Commission to Intermediaries
The CBI has published a discussion paper seeking views on the risks and benefits to consumers of insurance companies, banks and other financial firms paying commissions to intermediaries who distribute their financial products. Responses to the questions posed must be submitted by 18 October 2016.

Irish Minister for Finance welcomes figures showing growth in the Irish economy
The Minister for Finance Michael Noonan TD has welcomed figures released by the Central Statistics office which show growth in the Irish economy. The figures show that Ireland’s Gross Domestic Product rose by 26% in real terms last year, which will further reduce Ireland’s debt to GNP ratio. In addition, the Irish economy grew by 2.3% in GDP terms during the first quarter of this year, which was partly attributed to robust consumer spending.

Irish Minister for Finance publishes Credit Union Advisory Committee Review
Minister for Finance Michael Noonan T.D. has published the Credit Union Advisory Committee (CUAC) Review of Implementation of the Recommendations in the Commission on Credit Unions Report. The report confirms that the vast majority of recommendations made by the Commission have been implemented. In addition, the report acknowledges that considerable work has been undertaken by stakeholders in establishing more effective governance and regulatory requirements. Minister Noonan now intends to establish an Implementation Group to oversee and monitor implementation of the Commission recommendations, which he intends will provide support to Credit Unions in developing their business model.

  
EUROPEAN

Michel Barnier appointed as Chief Negotiator in charge of the preparation and conduct of the negotiations with the UK under Article 50 of the TEU
EU Commission President Jean Claude Junker has appointed Michel Barnier, a former EU Commissioner for the Internal Market as the EU Commission's chief Brexit negotiator. The Frenchman was responsible for the introduction of a significant amount of the EU regulations on financial services following the euro-zone crisis. Despite the announcement that Mr Barnier will take up his role on 1 October 2016, it is expected that the negotiation positions will first be agreed at a political level by the EU Council.

European Securities and Markets Authority launches consultation on proposed central clearing delay for small financial counterparties
ESMA has published a consultation paper on an aspect of the European Market Infrastructure Regulation (EMIR) relating to small financials. Views are being sought on the ESMA proposal to prolong the phase-in period for central clearing of OTC derivatives applicable to financial counterparties with a limited volume of derivatives activity by two years. The two year extension is intended to assist firms experiencing difficulties in connecting to central clearing counterparties as a result of cost issues and risks. The consultation, which seeks feedback on the difficulties these counterparties may be facing, is seeking views until 5 September 2016.

Outgoing Commissioner Johnathan Hill delivers speech to EU Parliament on the Capital Markets Union
Commissioner Jonathan Hill has delivered a speech to the EU Parliament sketching out the next steps which must be taken by his successor Valdis Dombrovskis in relation to the Capital Markets Union (CMU). Commissioner Hill rejected media comment that the transfer of his portfolio to Commissioner Dombrovskis would mean a shift in direction for the CMU saying that the CMU reflects the policy priorities identified by stakeholders in the EU Commission consultation on the subject. Commissioner Hill also commented that the CMU may take longer to build without UK involvement but that Brexit has made progress on attaining the CMU even more urgent. 

EU Commission proposes new rules to support investment in venture capital and social enterprises
The EU Commission has launched proposal to strengthen venture capital markets in Europe, which will revise the European Venture Capital Funds (EuVECA) and the European Social Entrepreneurship Funds Regulations (EuSEF) in order to increase the range of businesses in which venture capital funds can invest. The proposal will also open up the EuVECA and EuSEF label, which allows the funds to be marketed to professional investors and to non-professional investors able to commit a minimum of €100,000, to more fund managers. The proposal has been introduced with the aim of making it easier for investors to invest in small and medium-sized innovative companies. The EU Commission has also launched a Q&A addressing the new rules.

European Commission publishes its Green Paper on Retail Financial Services
On 14 July 2016 the European Commission published a summary of responses to the public consultation on the Green Paper on Retail Financial Services prepared by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union. The responding firms highlighted a number of obstacles to offering services cross-border, including local financial regulation, tax laws, access to data and information, local network for insurance claims handling, and divergent national interpretations of the Anti-Money Laundering Directive. The report states that work is ongoing in the Commission services on a follow-up initiative, which might take the form of an action plan.

European Commission publishes a document setting out the EU's revised financial services offer made in the context of the TTIP
On 14 July 2016 the European Commission released a document setting out the revised financial services offer of the EU made in the context of the fourteenth round Transatlantic Trade and Investment Partnership (TTIP) negotiations. The document was tabled for discussion with the US in the negotiating round of 11-15 July 2016. It includes a schedule of specific commitments and reservations, as follows: Annex I: reservations for existing measures; Annex II: reservations for future measures; and Annex III: reservations and specific liberalisation commitments related to market access. The EU considers that regulatory co-operation in financial services should be addressed in TTIP, and that discussions on market access and regulatory co-operation are closely linked. A related Commission press release explains that the document is one of nine that have been published in a range of areas and sectors. Each document sets out an offer that represents the EU's negotiating position on regulatory co-operation and is intended to simplify technical regulations without lowering standards, and to set global rules of trade.

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

Date published: 04 Aug 2016