Thursday July 27 2017

News Source: Fund Regulation

Focus: MIFID and MIFIR

Type: General

Country: Ireland




On 26th July 2017, the Central Bank of Ireland published CP111 Consultation Paper on the Second Edition of the Central Bank Investment Firm Regulations including changes to MiFID II.

The Consultation Paper deals inter alia with proposed changes to the Client Asset Regulations (‘CAR’) arising as a result of MiFID II together with the integration of those regulations into the Central Bank Investment Firms Regulations in line with the single investment firm rulebook approach outlined by the Central Bank in CP97.

In line with the objectives stated in CP97, it has been proposed to integrate into the Central Bank Investment Firms Regulations both the Investor Money Regulations and the Central Bank rules in relation to the capital requirements applied to market operators as set out in the Central Bank’s feedback statement on CP101.

Finally, some other consequential amendments to the existing Central Bank Investment Firms Regulations are proposed arising out of MiFID II and certain matters that have arisen since the first edition of the Central Bank Investment Firms Regulations became operational. The changes include certain technical amendments in relation to the regulatory requirements applied to Fund Administrators.

The proposed additional Parts of the Central Bank Investment Firms Regulations include the following:

Part 6

This Part integrates the existing CAR into the Central Bank Investment Firms Regulations with various modifications. The main modifications are set out below:

  • Duplication of MiFID II client asset rules has been removed or otherwise addressed;
  • Provisions that expand upon or are linked to a MiFID II client asset requirement have been re-drafted to read as complimentary to MiFID II;
  • All record-keeping requirements for investment firms permitted to hold client assets under this Part have been moved to one section;
  • All obligations to report to the Central Bank under this Part have been moved to one section;
  • All obligations to obtain client consents under this Part have been moved to one section; – Certain matters currently contained in the existing CAR Guidance have been put on a legislative footing in the Regulations;
  • Certain amendments have been made to the definitions set out in CAR. The changes include certain defined terms being renamed/amended and other unnecessary definitions being removed; and
  • The pan EU standards in relation to the safeguarding of client assets set out in MiFID II are applied to any firms authorised under the domestic IIA regime that are permitted to hold client assets. In light of the amendments above, it is expected that the CAR Guidance that accompanies the current CAR will require substantial revision in due course.

In light of the amendments above, it is expected that the CAR Guidance that accompanies the current CAR will require substantial revision in due course.

Part 7

This Part integrates the existing IMR into the Central Bank Investment Firms Regulations with various modifications. The main modifications are set out below:

  • All record-keeping requirements for investment firms permitted to hold investor money under this Part have been moved to one section;
  • All obligations to report to the Central Bank under this Part have been moved to one section;
  • Certain amendments have been made to the definitions set out in IMR. The changes include certain defined terms being renamed/amended and other unnecessary definitions being removed; and
  • Certain matters currently contained in the existing IMR Guidance have been put on a legislative footing in the Regulations.

In light of the amendments above, it is expected that the IMR Guidance that accompanies the current IMR will require substantial revision in due course.

Part 8

This Part integrates the Central Bank’s policy position on the capital requirements applied to market operators into the Central Bank Investment Firms Regulations. The policy position in this regard was set out in the feedback statement on CP101 issued in July 2016.

In addition to the new Parts set out above, certain limited amendments to the existing First Edition of the Central Bank Investment Firms Regulations are also proposed. Click here to find the main changes highlighted.

In addition to revising existing Central Bank Guidance to align it with the new Regulations, the Central Bank will also consider whether any additional Guidance on the requirements might also be useful.

Click on the link above for further information.