Tracker, Financial Services Regulation & Compliance - Investment Firms

DOMESTIC:

European Union (Markets in Financial Instruments) Regulations 2017 (SI 375/2017) are published

The European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017) (MiFID II Regulations) were signed into law by the Minister for Finance on 10 August 2017 and published by the Department of Finance (DOF) on 15 August 2017. The MiFID II Regulations transpose the second Markets in Financial Instruments Directive (EU) 2014/65 (MiFID II) into Irish law and they will enter into effect on 3 January 2018.

Under the MiFID II Regulations, the "safe-harbour" exemption, which allows non-EEA entities to provide investment services in Ireland to corporates without being authorised under MIFID, will continue to be available but it will be narrower in scope.  The exemption will only be available where the non-EEA firm in question is providing investment services into Ireland on a cross-border basis to eligible counterparties and professional clients.

The MiFID II Regulations confirm the positions taken by the DOF on national discretions, including on the optional exemption from authorisation available pursuant to Article 3(1)(a)-(c) of MiFID II.

Central Bank publishes an addendum to the Consumer Protection Code 2012

The DOF previously indicated that an amendment to the Consumer Protection Code (CPC) would be required following their decision to exercise the optional exemption under Article 3(1)(a)-(c) of MiFID II. In response to this decision, the Central Bank published an Addendum to the CPC. The following parts of the 2012 Code will be amended:

  • Chapter 4 – Provision of information;
     
  • Chapter 9 – Advertising; and
     
  • Chapter 12 – Definitions.

In addition, a new Chapter 14 (Additional Requirements Arising from the Transposition of MiFID II into Irish law) will be inserted. The Addendum will be effective from 3 January 2018.

Central Bank publishes the first edition of the Prospectus Regulatory Framework Questions and Answers

The Central Bank published the first edition of the Prospectus Regulatory Framework Questions and Answers. This updates and replaces the Frequently Asked Questions on the Prospectus Regulation, dated 23 May 2014, which were previously published by the Central Bank. In particular, the Prospectus Regulatory Framework Questions and Answers include new Questions and Answers in relation to securities already admitted to trading on a regulated market in another Member State.

The Questions and Answers contain information on:

  • Approval of a Prospectus;
     
  • Passport Notifications to and from other Member States;
     
  • Employee Share Schemes;
     
  • Formal Notice;
     
  • Exemption from publishing a Prospectus; and
     
  • Securities already Admitted to Trading on a Regulated Market in another Member State.

Central Bank issues guidance on the operational and technical arrangements for Transaction Reporting under the Markets in Financial Instruments Regulation (EU) 600/2014  

The guidance sets out the operational and technical arrangements for submitting transaction reports under Markets in Financial Instruments Regulation (MiFIR) to the Central Bank systems and it should be read in conjunction to the Technical Reporting Instructions published by European Securities and Markets Authority (ESMA). It contains information on those entities that are authorised to submit MiFIR transaction reports, the different methods of submissions and the required format and content of those submissions.

Central Bank publishes letter to CEO's on findings of the Suitability Themed Review

The Central Bank has issued a letter to relevant CEO's providing feedback on the themed review they recently completed to examine the suitability processes of investment firms and their compliance with the ESMA “Guidelines on certain aspects of the MiFID suitability requirements”.  The majority of inspected firms failed to demonstrate full compliance with these guidelines. The Central Bank recommended firms review their suitability framework to ensure it meets the relevant requirements and implements the guidelines.  Where the Central Bank identified risks to consumers, formal supervisory requirements have been imposed on the relevant firms.


EUROPEAN:

European Securities and Markets Authority publishes Final Report on the guidelines for the transfer of data between Trade Repositories

ESMA has issued final guidelines on data transfer between Trade Repositories (TRs) authorised under the European Market Infrastructure Regulation (EMIR).  The guidelines apply to TRs registered or recognised by ESMA and aim to provide TRs with additional clarification on how to ensure compliance at all times with EMIR requirements.

The guidelines will apply in relation to the reporting without duplication of details of derivatives by counterparties and Central Counterparties (CCPs) under Article 9(1) of EMIR, the transfer of derivatives data between TRs at the request of the counterparties to a derivative, or the entity reporting on their behalf, or in the situation covered by Article 79(3) of EMIR for the transfer of reporting flow in the case of withdrawal of registration of a TR and the record keeping of details of derivatives under Article 80(3) of EMIR.

The guidelines will become applicable on 16 October 2017 and ESMA will carry out an annual assessment of TRs’ compliance with the guidelines.

European Securities and Markets Authority publishes it first three opinions on position limits regarding commodity derivatives under the MiFID II and MIFIR

The opinions of ESMA agree with the proposed position limits by the Autorité des Marchés Financiers (AMF) regarding rapeseed, corn, and milling wheat. ESMA found that the proposed position limits for rapeseed, corn and milling wheat by the AMF are consistent with the objectives established in MiFID II and with the methodology developed for setting those limits.

Limits will apply to the net position that a person can hold in commodity derivative contracts from 3 January 2018.  National authorities must set position limits for commodity derivatives and notify ESMA of the specific position limits they plan to introduce for liquid contracts. ESMA will continue to assess the notifications received and issue opinions in order to ensure that the position limits are set in accordance with the MiFID II framework.

European Securities and Markets Authority updates its MiFID II guidelines on transaction reporting, order record keeping and clock synchronisation

ESMA has issued an update of its Guidelines on transaction reporting, order record keeping and clock synchronisation under MiFID II. The updates correct some unintended factual mistakes, typos and inconsistencies in the technical part of the Guidelines. None of the corrections aims to alter the substance or policy provisions of the Guidelines originally published on 10 October 2016.  Once the guidelines are finished being translated into the official languages of the EU, the national competent authorities are required to notify ESMA whether they comply, or intend to comply, with the guidelines and, as appropriate, the reasons for non-compliance. This must be done within two months of publication of the guidelines in the official languages of the EU.

European Commission publishes public consultation on post-trade in a Capital Market Union: dismantling barriers and strategy for the future

The aim of the consultation is to gather views on the current state of post-trade markets, the main trends and challenges faced by post-trade services providers and their users and to determine the existence and scale of remaining or new barriers, the risks associated with such barriers and the best ways to address them. The consultation is divided into two sections dealing with: (i) EU and global trends, new technologies and competition in post-trade; and (ii) remaining barriers and solutions to remove them.

The results of this consultation will feed into future legislative reviews and contribute to the communication on post-trade planned for the end of 2017. The consultation will run until 15 November 2017.

European Commission seeks views on amicable resolutions to disputes between investors and public authorities in the Single Market

The purpose of the consultation is to assess if rules for the amicable resolution of investment disputes should be set up in order to save time and money both for EU investors and national authorities. The main focus of the consultation is on mediation, which the Commission said could help ensure a cost-effective and quick resolution of disputes between investors and national authorities, and even prevent such problems. The Commissions objective will be to collect evidence on whether there is a need for an EU framework, what its main desirable characteristics could be, the impacts of the possible options, and whether there is a need to enhance clarity about the rights of EU investors in the single market. The Commission said it aims provide guidance on existing EU rules for treatment of cross-border investments. The consultation will be open until 3 November 2017.

European Securities and Markets Authority publishes Guidelines Compliance Table on Market Abuse Regulation (EU) 596/2014

ESMA has published a Guidelines Compliance Table, following the publication of guidelines pursuant to the Market Abuse Regulation (MAR), which sets out which competent authorities have informed ESMA that they either comply, do not comply or intend to comply with the ESMA's guidelines on information relating to commodity derivatives markets or related spot markets for the purpose of the definition of inside information on commodity derivatives.

European Commission publishes a Delegated Regulation amending Delegated Regulation (EU) 2017/565 as regards the specification of the definition of systematic internalisers for the purposes of Directive 2014/65/EU

The Delegated Regulation published on the 28 August 2017 clarifies the precise scope of the definition of "systematic internaliser" due to recent technological developments in securities markets concerning matching arrangements in which investment firms may participate. The Delegated Regulation enters into force 20 days after its publication in the Official Journal of the EU and will apply from 3 January 2018.

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

Date published: 07 Sept 2017