Ireland: IFLR Mifid II Report 2017, Ireland

Last Updated: 26 October 2017
Article by Joe Beashel

SECTION 1: Market outlook

1.1 Please clarify which products or markets your jurisdiction hosts that are affected by Mifid II.

Mifid II will affect Irish investment firms (such as brokers, asset managers, wealth managers and corporate advisory firms) and market operators, data reporting service providers and banks carrying out Mifid investment services. The Irish funds industry is a major part of the Irish financial services offering. Ireland has over 800 fund managers from 50+ countries with assets administered in Ireland. At an international level, Ireland offers offshore managers access to the EU, with the EU-wide marketing passport for Undertakings for collective investment in transferable securities (Ucits) and alternative investment funds (AIFs).

The far reaching indirect impact of Mifid II on the asset management industry and funds industry will introduce important changes to the regulatory environment in Ireland as Ucits management companies (mancos) and AIF managers (AIFMs) not authorised to carry out Mifid investment services will now be required to comply with certain requirements so that Ucits and AIFs can continue to be sold in the EU.

SECTION 2 (a) – EU member states: Implementation

2.1 Outline the possible key differences in (a) goldplating; and (b) exercise of national discretion, where provided for in Mifid II in your jurisdiction

(a) Gold Plating

The legislative body responsible for transposing Mifid II into Irish law, the Department of Finance, will be implementing Mifid II directly and will not be introducing any gold plating requirements. The national competent authority in Ireland, the Central Bank of Ireland (the Central Bank) has confirmed it will be relying on guidance from European Securities and Markets Authority (Esma).

(b) Exercise of National Discretion

Safe Harbour Regime

The current Irish Safe Harbour regime for third countries carrying out wholesale investment services will be retained. Firms will continue to be considered not to be operating in Ireland where certain conditions are met. However, the application of this Safe Harbour will be limited under Mifid II to eligible counterparties and professionals and will not apply in certain circumstances. The narrowing of the Safe Harbour regime means that some third country firms may no longer be able to provide investment services in Ireland without being authorised by the Central Bank. Prior to the implementation of Mifid II, firms that wish to provide such services under the Safe Harbour must ensure their clients are properly classified as professional clients or eligible counterparties for Mifid II and that their home country meets the new requirements.

Optional Exemptions

National discretion will be exercised in respect of the optionally exempt firms qualifying under Article 3 (1) (a), (b) and (c) (Exempt Firms) from Mifid II, though these Exempt Firms must still meet the Mifid II requirements in Article 3(2).

Third Country Branches

The branch requirement when a third country firm intends to provide investment services to retail and elect-up professional clients in Ireland will be transposed into Irish law. This requirement provides greater protection for retail clients and ensures a level playing field in respect of investment firm rules.

Sanctions

National discretion will be exercised to implement criminal sanctions for infringements of Mifid II. Maximum fines of €5 million for national persons and €10 million for legal persons will be imposed. These sanctions are aligned with fines under the Central Bank's Administrative Sanctions Regime.

2.2 What is the biggest concern in respect of these variations and possible types of divergences?

There is a significant discrepancy between the requirements in Article 3(2) of Mifid II and the current domestic provisions under the Investment Intermediaries Act 1995 (the IIA) and the Central Bank's Consumer Protection Code (the CPC). The Mifid II investor protections will not apply to Exempt Firms, and these firms will only be subject to investor protection requirements under the CPC. To address the potential for any regulatory arbitrage, the CPC will be amended so that Exempt Firms will be subject to certain enhanced CPC investor protections, similar to the Mifid II Protections. The Exempt Firms will be held to the same standards as Mifid II in respect of product governance, remuneration requirements, suitability assessments and disclosure requirements, amongst other provisions. This will ensure the end client will be afforded sufficient protection regardless of the applicable regulatory regime.

The Investment Intermediaries Act 1995 will be amended for Exempt Firms in order to improve consumer protection in relation to retail investment products, while providing for proportionate treatment for relevant investment service providers, which otherwise would be subject to full Mifid II requirements.

2.3 What are the most important extraterritorial issues regarding Mifid II in your jurisdiction?

Collective investment undertakings and their managers are exempt from Mifid II. However, most Irish Ucits mancos and AIFMs follow the 'delegated' model, whereby the day-to-day asset management, marketing and distribution of a fund is delegated to third party asset manager(s) or distributors which are either authorised in the EU to provide Mifid individual portfolio management or advisory services and/ or receipt and transmission of orders, or are subject to an equivalent regime outside the EU. Ucits mancos and AIFMs will be impacted because the relevant service providers will need information (such as product costs and charges, and target market information) and other support in order to meet their obligations under Mifid II. Other services providers to Ucits and AIFs not directly affected by Mifid II may also be requested to provide information as part of the provision of this support (e.g. fund administrators/transfer agents). Therefore, Ucits mancos, AIFMs and Mifid firms will be expected to work together to ensure all the necessary Mifid II information is available so that the end client receives the Mifid II investor protections. Non-Mifid firms may also be required to facilitate Mifid firms in respect of the payment for investment research under Mifid II. These requirements will increase the administrative burden of non-Mifid firms in dealing with Mifid firms.

To view the full article please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.