IRELAND: Central Bank Postpones Investor Money Regulations

Thursday February 25 2016

The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) Investor Money Regulations 2015 for Fund Service Providers – SI 105 of 2015 (Investor Money Regulations) were signed on  25 March 2015 and were due to come into operation on 1 April 2016.

The Investor Money Regulations set out requirements in relation to Fund Service Providers (FSP) holding investor money. The Regulations are set out under the following six headings which the Central Bank regards as the six core Investor Money Principles of an investor money regime.

Designation

A FSP should ensure that investor money is clearly identified in its internal records and in the records of third parties. The investor money must be identifiable and separate from all noninvestor money.

Reconciliation

A FSP should keep accurate books and records to enable it, at any time and without delay, to provide an accurate record of the investor money held by a FSP for each investor and the total held in the collection account. A FSP should conduct, on a daily basis, a reconciliation between its internal records and those external records of any third party with whom investor money is held.

Daily Calculation

Each working day a FSP should ensure that the aggregate balance of all collection accounts (investor money resource) as at the close of business on the previous working day is equal to the amount it should be holding on behalf of investors (investor money requirement).

Risk Management

A FSP should ensure it applies systems and controls that are appropriate to identify risks in relation to investor money and should put in place mitigants to counteract these risks.

Investor Money Examination

A FSP should engage an external auditor to report at least annually on the FSP’s safeguarding of investor money.

The Central Bank has decided to postpone the operation date of the Investor Money Regulations from 1 April 2016 to 1 July 2016 subject to certain additional reporting requirements on transition planning in relation to which the Central Bank will be in communication with fund service providers.

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