On 2 August 2013, the Central Bank of Ireland (the "Central Bank") issued a consultation paper entitled Client Asset Regulations and Guidance (the "Consultation Paper").
The proposals outlined in the Consultation Paper have been put forward for consideration in order to streamline the client asset regime and make it more comprehensive and readily accessible. It is envisaged that the existing Client Asset Regulations ("CAR") (issued by the Central Bank in 2007) be revised.
The Consultation Paper notes that the protection of client assets is a regulatory priority for the Central Bank and that the proposals are aimed at minimising the risk of loss and/or misuse of client assets. The Consultation Paper is aimed at the following parties concerned with, or subject to, the current CAR:
- Firms who hold client assets;
- Clients and potential clients whose assets are held by firms;
- Auditors;
- Business outsourcing firms providing back office services;
- Third parties;
- Insolvency practitioners; and
- Independent experts.
In particular, the Central Bank seeks industry views on the key questions relating to the 7 Client Asset Core Principles upon which the current CAR are based.
The questions for consideration are focused on the following principles:
- Segregation;
- Designation and registration;
- Reconciliation;
- Daily calculation;
- Client disclosure and client consent;
- Risk management; and
- Client asset requirements.
Further to the feedback received on foot of the Consultation Paper, the Central Bank will finalise revised CAR. The Central Bank expects the CAR to be in place by the end of the first quarter of 2014.
Submissions must be received by the closing date of 31 October 2013.
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.
