Ireland Regulatory Calendar 2020

Shareholders’ Rights Directive II

The Shareholders’ Rights Directive EU/2017/828 (SRD II) amends the existing SRD 2007/36/EC and was due to be transposed by all EU Member States by June 10, 2019. Ireland has not met this deadline, however. Its implementing regulations to transpose SRD II into Irish law is therefore expected shortly."

2020.

Central Bank (Amendment) Bill 2019 

On June 18, 2019, the Irish Government agreed to draft the Central Bank (Amendment) Bill 2019 to introduce an individual accountability regime in the Irish financial sector. Engagement is currently underway between the Department of Finance, Attorney General’s Office and the Central Bank to draft a heads of bill to be brought before Government before the end of 2019. Following its legislative passage, it is intended the Central Bank of Ireland will consult publicly on its provisions in 2020.

2020.

Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2019

The bill will transpose many of the provisions of the 5th EU Money Laundering Directive, aims to strengthen EU laws combatting money laundering and terrorist financing. Heads of bill were drafted in January 2019, and were transposed as of January 10, 2020.

2020.

CP130 – Treatment, Correction and Redress of Errors in Investment Funds

The Central Bank issued consultation paper 130 on the treatment, correction and redress of errors in investment funds on the September 9, 2019. It sets out new rules and guidance for dealing with errors in investment funds, including NAV errors, investment breach errors, fee errors and control breach errors. The Central Bank considers that a fund management company is ultimately responsible for ensuring that an error is appropriately rectified, and the depositary has a role in ensuring that this is the case. The Central bank is looking to ensure that the best interests of investors are safeguarded. As a result, the majority of service providers to funds falling within scope will be indirectly subject to the new guidance once it is finalised.

The consultation paper looks at the treatment, correction and redress of errors. For treatment it looks at how errors should be treated when they arise, including when they should be considered as material. For correction it looks at how errors should be corrected, including the reporting and notification obligations that should apply. For redress it looks at how the fund and/or investors should be appropriately rectified following an error. Once finalised, consultation paper 130 will potentially increase the responsibility and liability for boards falling within its scope. It will apply to fund management companies acting for UCITS or AIFs, and Irish fund management companies.

Consultation closed on December 9, 2019, and Irish funds responded with a number of questions. The Central Bank has confirmed they will review these, and that this will be a two-step process with a second consultation paper being released in 2020.

2020.

The Consumer Protection Code (CPC)

The CPC is a set of rules and principles that all regulated financial services firms must follow when providing financial products and services to consumers. The CBI will undertake a review of the CPC in 2020.

2020.

Money Market Funds Regulation

In line with ESMA’s Money Market Fund Regulation or  MMF Regulation guidelines, published July 19, 2019, MMF manager reporting to national competent authorities under Regulation (EU) 2017/1131 is expected to be submitted by the end of Q1, 2020.

The guidelines provide direction in relation to reporting templates that MMF managers are required to submit to the relevant NCAs for money market funds.

Q1 2020.

Central Register of Beneficial Ownership of Trusts

The 5th Anti-Money Laundering Directive requires trustees to include information on the beneficial ownership of trusts in a central national register. Ireland is required to establish its register by March 10, 2020. MLD5 broadens the scope of those who can be granted access to beneficial ownership information held on the register and includes provision for any person who can demonstrate a “legitimate interest” in accessing such information.

March 10, 2020.

Packaged Retail Investment and Insurance Products (PRIIPs)

In October 2019, the Joint Committee of the European Supervisory Authorities (ESAs) published a consultation on proposed amendments to the PRIIPs Key Information Document (KID). The proposed amendments relate to performance scenarios, investment costs and multi-option products. Some proposed amendments also allow the requirements to be applied to UCITS that are expected to have to prepare a Key Investor Information Document from January 1, 2022 onwards.

The consultation close on January 13, 2020, and the Joint Committee is expected to submit its final proposals to the European Commission in Q1, 2020.

Q1, 2020.

Prospectus Regulation

The Prospectus Regulation became applicable on July 21, 2019. ESMA expects to publish a final version of the guidelines on disclosure requirements under Regulation (EU) 2017/1129 in Q2 2020. It intends to launch the new Prospectus Register in 2020. The Prospectus Register will provide the public with a single entry-point to all prospectuses published in the EU and will include a wide set of data to facilitate their classification and analysis.

Q2, 2020.

Derivatives and Market Infrastructure

The Securities Financial Transactions (SFT) Regulation establishes that both parties to an SFT need to report new, modified or terminated SFTs to a registered or recognized trade repository (TR), including the composition of the collateral. ESMA published its final report on the Guidelines on Reporting under SFTR in Q4, 2019.

The SFTR rules entered into force on April 11, 2019, with reporting due to go live for banks and investment firms on April 11, 2020, and central counterparties and central security depositories on October 11, 2020.

April 11 and October 11, 2020.

Investment Firms Regulation (IFR) & Investment Firms Directive (IFD)

MiFID II reinforced the existing MiFID I requirements relating to compliance functions. ESMA therefore proposes clarifying, refining and supplementing the existing 2012 guidelines, rather than replacing them. It has indicated that it aims to publish its final report and guidelines during Q2, 2020.

Q2, 2020.

Environmental, Social and Governance (ESG) Disclosure Rules             

Published in May 2018, the EU Action Plan on Sustainable Finance includes three core legislative proposals, as well as proposed amendments to the UCITS, AIFMD and MiFID frameworks, to ensure the integration of sustainability risks and other sustainability factors into existing rules.

By the end of 2020, firms will be required to publish their policies on the integration of sustainability risks in their investment decision-making process. They will have to demonstrate if they have considered the impacts of sustainability factors on investments and provide relevant information to investors. If a firm has not made these considerations, they will have to explain why not and if and when they intend to.

Q4, 2020..

Central securities depositaries (CSDs)

The Central Securities Depositories Regulation (CSDR) relating to securities settlement and CSDs entered into force on  September 2014. The settlement discipline enters into force September 14, 2020.

September 14, 2020

Liquidity management for UCITS 

ESMA issued a final report on its guidelines on liquidity stress testing for UCITS and AIFs on September 2, 2019. It sets out minimum standards for liquidity stress testing in EU domiciled UCITS and AIF fund; provides an overview of the feedback received to the consultation paper; and explains how ESMA took this feedback into account. It contains the final set of guidelines on liquidity stress testing in UCITS and AIFs. Section 2 of the report sets out an overview of the document. Annex I provides the feedback statement, and Annex II includes the cost benefit analysis, which details the expected impact of the guidelines. The guidelines themselves are outlined in Annex III.

The publication of the Guidelines follows increased regulatory focus on liquidity by the Central Bank. In July it issued a “Dear CEO” letter to all UCITS management companies and AIFMs, noting their expectation that the board, relevant directors and designated persons of each management company will assess the liquidity position of each fund under management on an ongoing basis to ensure “that the liquidity of the investment portfolio remains in line with the respective fund’s redemption policy, taking into account investors redemption demands”. Currently, UCITS management companies are required to conduct stress testing where appropriate in order to assess the liquidity risk of a UCITS under exceptional circumstances. It’s worth noting that since January of this year, as a direct result of Brexit, the Central Bank has increased its monitoring of investment fund liquidity and redemption activity. The new guidelines will apply from September 30, 2020.

September 30, 2020.

6th AML Directive on Combatting Money Laundering by Criminal Law               

The directive came into effect November 12, 2018, and Member States have until December 3, 2020, to transpose the laws and regulation into national law.

December 3, 2020.

CP86 – Consultation on Fund Management Company Effectiveness

In line with the CBI’s thematic review of CP86 and the completion of the second phase, onsite inspections commenced in November 2019 and continued into Q1, 2020. The CBI expects to conclude this body of work in H1 2020, with communication to industry to follow in the second half of 2020. The expectation is that this will include issuance of a an industry letter outlining good or poor practice as well as individual risk mitigation programmes.

H2 2020.