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| Financial Law Update | |
On 30 March 2010 the Minister for Finance, Mr Brian Lenihan, published the Central Bank Reform Bill 2010 which will give effect to the decision made some time ago to merge the functions of the Central Bank and the Irish Financial Services Regulatory Authority to create a single, fully-integrated Central Bank with a unitary Board to be called 'the Central Bank Commission' writes Joe Beashel.
By: Joe Beashel
Previous Articles
The pro-investment funds taxation measures contained within the Finance Bill 2010 build on Ireland’s existing strengths as an international fund domicile, writes Liz Grace.
By: Liz Grace
The end is in sight for the implementation of the Third Anti Money Laundering Directive (read more)
Notwithstanding the fact that the deadline for transposition of the Third Money Laundering Directive 2005/60/EC (the 'Directive') was 15 December 2007, Ireland has yet to implement its provisions and is now facing infringement proceedings by the European Commission. A bill to implement the Directive was published on 28 July 2009 and it has moved slowly through the legislative process since. However, the long road to implementation turned a corner on 14 January 2010 when the main review part of the legislative process, a select committee of the Dail, made several amendments to the draft legislation. With the transposition date now looming, designated bodies (soon to be called 'designated persons') should be working towards implementation.
By: Joe Beashel
Re-domiciliation of investment funds to Ireland: Irish President signs new law (read more)
On 23 December 2009, the President of Ireland signed into law the Companies (Miscellaneous Provisions) Act 2009, which introduces new provisions specifically for the efficient re-domiciling of investment funds to Ireland. In a climate of strong investor demand for regulated product, this development presents asset managers with a significant opportunity to re-locate funds established in other jurisdictions to one of the world's most advantageous fund domiciles, using a straightforward regulatory process. James Scanlon discusses the key advantages of the new regime as well as giving an outline of the main practical steps involved in order to effect a re-domiciliation.
By: James Scanlon
Lack of clarity in implementation of consumer credit directive (read more)
The Consumer Credit Directive (Directive 2008/48/EC) (CCD) is due for implementation on 11th June 2010. It affects credit agreements currently covered by both the Consumer Credit Act 1995 (CCA) and the Consumer Protection Code (CPC). There is a lack of clarity over how precisely the CCD will be implemented and how it will interact with the existing requirements of the CCA and the CPC which will make it difficult from lending institutions to plan for its implementation
By: Joe Beashel
AIFM Directive is still not good enough (read more)
Conceived in panic, delivered in haste and reared against a background of parental disharmony, the Alternative Investment Fund Managers Directive is likely to be a problem child for EU legislators and an unnecessarily disruptive influence on the alternative fund management industry in Europe
By: Michael Jackson
The High Court clarifies the jurisdiction of the Financial Services Ombudsman (read more)
The recent High Court decision of Mr Justice McMahon in the case of Square Capital Limited supported a finding of the Ombudsman which related to an investment in property in the UK and will have implications for firms which have in past or currently provide, a mixture of regulated financial services and what would normally be understood to be unregulated, property related services.
By: Joe Beashel
European Commission launch a review of the Prospectus Directive (read more)
On 24th September 2009, the European Commission published a proposal for the review of the Prospectus Directive. The intention behind the initiative is to simplify and improve the application of the Directive, increasing its efficiency and enhancing the EU's international competitiveness, while ensuring that a high level of investor protection remains. Joe Beashel discusses the proposal and some of the resulting advantages which it may introduce
By: Joe Beashel
Money market funds: clarifications needed (read more)
Investor confusion about money market funds has led the SEC on June 24th 2009 to change its rules on the product. The need for improved clarity on and classification of MMFs is also needed in Europe. Barry Lynch and Fidelma Walshe say that rules to clarify the MMF label are important to secure the success of Ireland as a domicile of choice for MMFs in Europe.
By: Barry Lynch & Fidelma Walshe
CESR launches consultations on KID and the management company passport (read more)
Two consultation papers were launched by CESR on 8 July 2009, namely, a consultation on the format and content of the key investor information disclosures, and a consultation on the regulatory framework to underpin the management company passport for UCITS.
By: Dualta Counihan
CESR launches a consultation on risk measurement for UCITS (read more)
On 15 June 2009, the Committee of European Securities Regulators (CESR) launched a consultation paper in response to the European Commission's request for technical advice on Level 2 implementing measures for the recast UCITS IV Directive. The consultation paper suggests new technical guidance for risk measurement in respect of UCITS funds. Dualta Counihan looks at the content of the consultation paper together with a look at the impending implementing measures for UCITS IV.
By: Dualta Counihan
The European Commission proposes a new architecture for the European financial system (read more)
As anticipated, the European Commission, on 27th May, adopted a Communication to overhaul financial supervision in Europe, which follows closely the recommendations made in the de Larosière Report published in February this year. The general thrust of these proposals have been welcomed by the financial markets, however, there are some contentious issues which will result in intensive debate
By: Joe Beashel
European Commission publishes draft directive on alternative investment fund managers (read more)
After much speculation and political debate the European Commission has published the text of its proposed Alternative Investment Fund Managers Directive. Though widely heralded as a measure directed at the hedge fund industry, the draft Directive will in fact affect the operations of managers of all non-UCITS funds with private equity, commodity funds, real estate and venture capital funds falling within its remit, writes Barry Lynch.
By: Barry Lynch
New codes present a difficult implementation challenge (read more)
The Financial Regulator issued its new codes of conduct in respect of business lending to small and medium enterprises (the 'SME Code') and in respect of mortgage arrears (the 'Mortgage Code') in February. The Mortgage Code will come into effect on 27 February and the SME Code on 13 March although the implementation of some elements may be staggered. The codes seek to impose minimum lending standards for Irish regulated entities with the exception of credit unions, writes Joe Beashel.
By: Joe Beashel
Financial Regulator publishes a comprehensive review of the Irish intermediary market. (read more)
The Financial Regulator recently completed a review of the intermediary market in Ireland and issued its findings in December 2008 covering two areas - intermediary categorisation and transparency of services provided in respect of their remuneration, relationship with the consumer and relationship with the product producer. While mortgage intermediaries are not specifically addressed in the second area, it does mention that the two markets are similar and that the recommendations in respect of insurance intermediaries should be considered in the future in respect of mortgage intermediaries, writes Joe Beashel.
By: Joe Beashel
The Financial Regulator bares its teeth (read more)
The Financial Regulator has recently handed out some of the largest fines in its history, Quinn Insurance Limited and Irish Nationwide Building Society received fines of €3,250,000 and €50,000 respectively in October while smaller fines were imposed on Apex Fund Services (Ireland) Limited in August. Sean Quinn Senior was also personally fined €200,000. The imposition of substantial fines signals a significant directional change for the Financial Regulator writes Joe Beashel. In the past compliance breaches were typically dealt with in private and it has only been in recent months that the number of fines has started to increase and only very recently that such headline grabbing fines were issued.
By: Joe Beashel
Irish and Chinese financial regulators agree memoranda of understanding (read more)
On 23 October 2008 in Beijing, the Irish Financial Services Regulatory Authority (the 'Financial Regulator') signed two Memoranda of Understanding (the 'MoUs') with its Chinese counterparts, the China Securities Regulatory Commission (CSRC) and the China Banking Regulatory Commission (CBRC), enabling Chinese investors to invest in Irish domiciled, UCITS compliant and non-UCITS, investment products.
By: Elizabeth Grace
Government powers coming out of the deposit scheme bill (read more)
Joe Beashel looks at the details of the guarantee deposit scheme and the details of the legislation that went through last week.
By: Joe Beashel
Tips for obtaining a MiFID authorisation in Ireland. (read more)
It is nearly a year since the Markets in Financial Instruments Directive ("MiFID") became law in Ireland. While a lot of emphasis was rightly put on the changes which MiFID would introduce for existing firms, MiFID also introduced significant new changes for firms seeking MiFID authorisation for the first time or those seeking to extend their existing authorisation, writes Joe Beashel.
By: Joe Beashel
It will be very important to ensure that the forthcoming legislation to implement the EU's Third Money Laundering Directive (Directive 2005/60/EC)( the 'Directive') clearly establishes the legal obligation of fund administrators to apply customer due diligence measures to the investors in the funds for which fund administrators provide administration services writes Joe Beashel.
By: Joe Beashel
The hard sell - regulation of the sales process for financial products (read more)
Both the sub-prime crisis in the USA and some recent publicity in Ireland have highlighted the need for all firms selling financial products to ensure that such products are properly sold. A recent case in the UK resulted in JP Morgan succeeding against allegations of mis-selling of complex products by a sophisticated investor. On the other hand, in Ireland the Financial Services Ombudsman has reported a 29 per cent increase in complaints compared to last year with some complaints relating to the sale of long term products to the elderly.
By: Joe Beashel
Further enhancements for qualifying investor funds (read more)
The introduction last year of a 24-hour turnaround time for regulatory approval of qualifying investor funds ('QIFs') represented a sophisticated and innovative development on the Irish investment funds landscape, reflecting an acknowledgment by the Financial Regulator of the importance of speed to market for fund promoters targeting high net worth and institutional investors.
By: Elizabeth Grace
What does security information really mean? (read more)
The recent news reports following the theft from Bank of Ireland ('BoI'), over the course of a number of months, of four laptop computers containing the unencrypted personal data of thirty thousand customers, has focused attention once again on information security, most particularly from the perspective of data protection. While clearly an issue that needs to be to the forefront in the development of any information security policy, compliance with data protection obligations is only one of the legal requirements that needs to be addressed in formulating procedures for keeping information secure, writes Anne-Marie Bohan
By: Anne-Marie Bohan
Examinership - preserving the core value of a business (read more)
The recent increase in use of the Irish corporate rescue process is reflective of the recent global downturn in financial markets, with its inevitable knock-on effect on the Irish property market which is heavily reliant on bank funding. This increased use of the examinership process also reflects an increased awareness in the business community that traditional insolvency procedures such as liquidation and receivership do not always allow realisation of the potential value of the underlying business of an insolvent company, writes Julie Murphy-O'Connor
By: Julie Murphy-O'Connor
Delay to Third Money Laundering Directive helps industry to plan for implementation (read more)
The Third Money Laundering Directive's delayed enactment will have been met with some approval from industry, given the recent efforts taken to implement MiFID and the Capital Requirements Directive in 2007. The Bill will now hopefully be passed into law before the summer recess of the Oireachtas, and give firms time to plan for implementation, writes Joe Beashel.
By: Joe Beashel
Further important changes to consumer credit market planned (read more)
A constant challenge for regulated firms is to keep up with new regulatory developments. Many, particularly those driven by the EU, can take several years to evolve into legislation and some can come upon us quite quickly, writes Joe Beashel. In the area of consumer credit we have had examples of both in the last few weeks.
By: Joe Beashel
Work to replace the simplified prospectus continues apace (read more)
Following on from the publication of the Committee of European Securities Regulators' consultation paper on the replacement of the Simplified Prospectus in October, work has continued apace on the development of the proposed form and content of Key Investor Information for UCITS.
By: Michael Jackson
The Third Money Laundering Directive implementation likely to be delayed until Spring (read more)
Delay in implementation of the Directive will be a challenge for designated bodies. Policy makers in this, as in any other area, must ensure that industry is fully informed of its obligations in sufficient time to allow industry to plan to meet its obligations. Although we regret the delay in implementation we welcome the opportunity the delay will afford designated bodies to better understand their obligations and thereby plan more effectively for implementation.
By: Joe Beashel
Sub-prime and other non-bank lenders now regulated in Ireland (read more)
The crises in the US sub-prime housing market where thousands of borrowers with low income and poor credit histories defaulted on their mortgage payments due to rising rates caused a ripple effect across the financial world. In a very high profile case, the UK based bank, Northern Rock, was hit as a direct result of the sub-prime crises which resulted in hundreds of Irish customers queuing outside the Northern Rock Dublin branch to withdraw their savings, writes Joe Beashel.
By: Joe Beashel
MiFID a challenge of ongoing implementation (read more)
As the MiFID implementation date draws ever closer, much of the focus in recent months has been on fulfilling the pressing, client facing requirements of client classification, amending terms of business and the like.
By: Joe Beashel
New transparency regulations (read more)
The new transparency regulations (S.I. No. 277 of 2007) (the 'Regulations') which are effective from 13 June 2007 transpose the provisions of the Transparency Directive (2004/109/EC) (the 'Directive'). The Directive harmonises transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, such as the Irish Stock Exchange ('ISE'). In addition to the regulations, new Interim Transparency Rules have been issued by the Central Bank and Financial Services Authority ('CBFSA') and Financial Regulator (the 'Financial Regulator'), writes Joe Beashel.
By: Joe Beashel
Getting client facing requirements right (read more)
With less than 60 working days to go until the introduction of the Markets in Financial Instruments Directive ("MiFID") (Directive 2004/39/EC), affected firms will need to take particular care to ensure that all client facing documentation and processes are compliant at the 1 November deadline. The Financial Regulator has been working with industry representatives on a number of aspects of MiFID including its conduct of business requirements and recently published a very useful document entitled The Markets in Financial Instruments Directive (MiFID) Feedback on Discussions of Conduct of Business Industry Working Group upon which this note is based, writes Joe Beashel
By: Joe Beashel
Financial Regulator clarifies that it will not request "compliance statements" (read more)
We welcome the clarification provided by the Financial Regulator that it will not (save in extremely exceptional circumstances) exercise its power to require regulated firms to provide compliance statements, writes Joe Beashel.
By: Joe Beashel
Financial services firms need not fear Consumer Protection Act (read more)
The Consumer Protection Act, 2007 aims to provide a new protection regime for the consumer across all sectors, including the domestic financial services sector. The main purposes of the legislation is to establish a powerful new National Consumer Agency and to give effect to the Unfair Commercial Practices Directive. The act replaces much of the existing body of consumer law, repealing and replacing nine existing statutes, creates a blacklist of misleading and aggressive commercial practices and continues a trend of criminalising certain commercial behaviour.
By: Joe Beashel
Time to start thinking about the third Money Laundering Directive (read more)
With the third Money Laundering Directive due to come in to force in December Joe Beashel looks at the important changes caused by the directive and some of the challenges that need to be overcome to implement it effectively.
By: Joe Beashel
Best execution - MiFID - an outline of CESR's consultation paper (read more)
Given the important role which best execution will play in the achievement of MiFID's goals, The Committee of European Securities Regulators ("CESR") issued a consultation paper (the "Consultation Paper") in February seeking to identify and propose solutions to a number of issues that had arisen in respect of this requirement, writes Joe Beashel.
By: Joe Beashel
MiFID outsourcing rules - the de facto standard (read more)
While primary purpose of the Markets in Financial Instruments Directive ('MiFID') is harmonisation of the rules relating to provision of investment services, and of the level of protection offered to investors, throughout the European Union, a number of the provisions of MiFID are of potentially much broader application, and look likely to be adopted across the financial services sector as de facto, if not de jure, standards.
By: Anne-Marie Bohan
A new year's present for the structured finance industry. (read more)
After another record year for structured financing in Ireland in 2006, Garry Ferguson looks at recent changes to Irish law which will further facilitate the structuring of securitisations through Ireland.
By: Garry Ferguson
New fitness and probity regime (read more)
The Irish Financial Regulator has recently published a new standardised process for approving the recruitment and appointment of senior persons in the firms regulated by it. This new process will change the way that regulated firms conduct themselves in recruiting and appointing individuals to a range of positions within their organisations, including chief executives, directors, executive-level managers, partners and compliance officers. Joe Beashel examines the steps in this "Fitness and Probity" process and what is required from regulated companies during the recruitment process.
By: Joe Beashel
MiFID - Opportunity missed to provide clarity for fund administrators. (read more)
In last month's edition of Finance, I looked at whether the Markets in Financial Instruments Directive 2004/39/EC ("MiFID") would apply to fund administrators and called upon the Financial Regulator to provide some clarity for potentially affected firms. It was with interest therefore, that I read the Financial Regulator's internal discussion paper recently circulated by the Irish Funds Industry Association (the "Discussion Paper").
By: Joe Beashel
MiFID & fund administrators, will it or won't it apply to them? (read more)
Joe Beashel highlights the need for clarity by the Financial Regulator with regards to MiFID and how it applys to fund administrators. Clarity is needed for firms to plan for implementation but also to consider whether, if affected, MiFID affords any opportunities, such as the ability to reduce costs and outsource some of their activities to lower cost locations.
By: Joe Beashel
Consumer protection code and minimum competancy requirements represent a raising of the bar in an effort by the Financial Regulator to standardise the approach regulated firms take to dealing with consumers across the broad spectrum of the financial services industry. In this article Joe Beashel outlines both the Consumer protection code and minimum competancy requirements.
By: Joe Beashel
Implications of MiFID for hedge fund managers (read more)
The Markets in Financial Instruments Directive (MiFID) will have significant implications for all asset managers, including hedge fund managers, located in the EU/EEA, as those who aren't prepared for it by November 2007, 'may have to cease trading'. In this article Joe Beashel partner at Matheson Ormsby Prentice examines the implications of the directive for the hedge fund industry, and warns that 'implementation cannot be put on the long finger'.
By: Joe Beashel
MiFID - level 2 measures agreed (almost) (read more)
Joe Beashel of Matheson Ormsby Prentice scrutinises the details of MIFID level 2 and examines the key features of the directive.
By: Joe Beashel
Directors responsibilities post-Enron (read more)
Joe Beashel writes about the shadow of the Enron scandal and the ways for company directors to ensure that the reoccurrence of a travesty of the magnitude of Enron is averted.
By: Joe Beashel
Management companies meet UCITS III conversion deadline (read more)
Investment fund management companies had a busy April, preparing for the UCITS III deadline. However, having obtained their authorisation under UCITS III, it will be very important for boards to ensure that the company is actually operated on the basis of the model set out in the business plan, as this is a new process and there will no doubt be teething problems, writes Joe Beashel.
By: Joe Beashel
Managing the risk of outsourcing- financial services sector (read more)
With ever-greater competition in the financial services sector, financial institutions are increasingly outsourcing non-core business processes and functions in order to find new efficiencies, reduce costs and increase shareholder value. Outsourcing presents particular challenges for financial institutions as regulated entities, as they will remain responsible to their supervisory authorities and customers for the actions of the service providers to whom they outsource, writes Anne-Marie Bohan of Matheson Ormsby Prentice.
By: Anne-Marie Bohan
Regulated firms face new minimum competency regime (read more)
Joe Beashel of Matheson Ormsby Prentice outlines the Financial Regulator's proposal for minimum competency requirements that is set to begin in January 2007. The requirements impact all financial services providers who engage with customers where the customer seeks retail financial products.
By: Joe Beashel
Preparing for the consumer protection code (read more)
Joe Beashel of Matheson Ormsby Prentice warns about the impact of the Consumer Protection Code to be introduced in July next. With fines of up to '5 million for breaching the "code", he stresses the need for regulated companies to develop a compliance system that will withstand regulatory scrutiny.
By: Joe Beashel
'Fitness & Probity' directors' regime looks set to be finalised in 2006 (read more)
Joe Beashal of Matheson Ormsby Prentice takes a look at some of the upcoming regualtory developments and challenges which firms will face in 2006. Some of the important events to note in the diary, he says, are the finalisation of the Financial Regulator's Fitness and Probity of Directors and Managers (CP11) regime, which is scheduled for September, and the imminent introduction of the EU Reinsurance Directive in Ireland.
By: Joe Beashel
Update on MiFID, the Markets in Financial Instruments Directive (read more)
Joe Beashal of Matheson Ormsby Prentice explains the 'Markets in Financial Instruments' Directive, also known as 'MiFID', the updated Investment Services Directive, and assesses its possible impact on the industry.
By: Joe Beashel
Financial Services Ombudsman publishes first set of decisions (read more)
The Financial Services Ombudsman has been steadily extending his authority across the financial services sector this year. Starting on 1 April 2005 with Credit Institutions and the Insurance Sector he has since added Credit Unions (1 August 2005), Mortgage and Insurance Brokers (1 October 2005), Moneylenders (1 November 2005) and all others (including non-regulated financial services providers) will be added on 1 December next.
By: Joe Beashel
MAD Directive will herald significant changes in financial services industry (read more)
The Market Abuse Directive will take an important step towards ensuring stable, transparent, integrated and efficient European markets, and while it was implemented in Ireland in July, a number of important practical provisions were just introduced on October 1st. Joe Beashel attempts to relieve some of the 'legislative fatigue' facing the industry caused by this and a number of other EU Directives currently being transposed by the financial services industry, by giving a broad introduction and overview of this important new piece of legislation.
By: Joe Beashel
Liam O'Reilly, chief executive of the Financial Regulator, indicated in the August edition of 'Regulatory Connection' (the Financial Regulator's newsletter), that he and his team are now in a position to use their new Administrative Sanctions Powers. Despite assurances that these new powers will be used sparingly, the fact that these powers have been 'switched on' will likely make industry participants apprehensive, writes Joe Beashel.
By: Joe Beashel
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