Tracker, Financial Services Regulation & Compliance - Investment Firms


The Central Bank of Ireland issues a press release with regard to its themed inspection in relation to conflicts of interest in Investment Firms
Investment Firms are required to establish and maintain conflicts of interest policies under the MiFID, AIFMD and UCITs Regulations. The inspection has found that: (i) awareness in relation to conflicts of interest was high among firms which are client focused and have a strong culture of regulatory compliance; (ii) "best in class" firms take a holistic approach to conflicts of interest and are aware of the potential for such conflicts to occur; and (iii) firms and clients alike are exposed to unnecessary risk where conflicts of interest are not recognised.  The Director of Market Supervision, Gareth Murphy, said that "The identification of conflicts of interest is a key step to ensuring that client detriment does not occur". The CBI has sent a letter to all investment firms detailing its findings.

New Member Firm Rules and Market Parameters published by the Irish Stock Exchange
The new Rules (Release 18 of the ISE Rules for member firms) and Market Parameters take effect from 21 March 2016.  The main amendments to the Rules include: (i) simplified rules for disciplinary proceedings; (ii) enhanced user friendliness with regard to streamlining of processes and procedures; and (iii) an update with regard to regulatory developments and current market practices.   

Central Bank – Updated MiFID Application Form - Application for authorisation 
The Central Bank has published an updated MiFID Application Form for firms seeking authorisation as an investment firm under Regulation 11 of the European Communities (Markets in Financial Instruments) Regulations 2007 and Commission Regulation (EC) No. 1287/2006 of 10 August 2006.

ESMA publishes its Trends, Risks and Vulnerabilities Report No. 1 2016 (TRV) on European Union (EU) securities markets
The Report covers developments in the European securities market from June to December 2015, and has found that overall market risks remain high.  The market risk indicator remains at "very high" with a stable outlook (initially raised to this level in September 2015 due to increasing risks from "excessive asset valuations", weakening growth outlook in emerging markets and the volatility of the commodity market), while liquidity and contagion risk remain at "high" with a stable outlook.   

Joint Committee of the European Supervisory Authorities (EBA, EIOPA, ESMA - ESAs) publishes final draft Regulatory Technical Standards ("RTS") outlining the framework of the European Market Infrastructure Regulation ("EMIR")
The aim of the RTS is to increase the safety of the EU over-the counter ("OTC") derivatives market. The draft RTS: (i) provide that counterparties must exchange both initial and variation markets for OTC derivatives not cleared by a Central Counterparty; (ii) include the list of eligible collateral for the exchange of margins, methods to determine appropriate collateral haircuts, and criteria to ensure the collateral is sufficiently diversified; (iii) include operational procedures with regard to documents, legal analysis of enforceability of the agreements, and the timing for collateral exchange; and (iv) include procedures for counterparties and competent authorities with regard to intragroup derivative contracts.

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

Date published: 05 April 2016