EXECUTION OF DOCUMENTS UNDER COMMON SEAL / CHANGES TO COMPANIES ACT 2014
The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 which amends the Companies Act 2014 was signed into law on 12 November 2024. Commencement orders are needed for its provisions to become operational.
Under the first commencement order (Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (Commencement) Order 2024) one of the first provisions to become operational is the widely-welcomed reinstatement, on a permanent basis, of the so-called 'interim fix' for the execution of documents by a company under seal, introduced during the COVID-19 pandemic.
The 'interim fix' allowed a company to execute documents under its common seal on separate counterparts between 21 August 2020 and 31 December 2022. It proved extremely useful in practice for companies when a company's seal, and the persons authorised to countersign it, were in different locations.
That mechanism is being permanently reinstated from 3 December 2024.
That first commencement order will also commence certain other provisions on 3 December 2024 including the new Section 176A of the Companies Act 2014 which gives companies the option to conduct general meetings in fully virtual or in hybrid format with attendees participating via electronic communications technology in accordance with the provision. For more information on that new provision and the other provisions which are being commenced on 3 December 2024, read our Corporate and M&A Group's insights here: Companies Act Amendments.
MARKETS IN CRYPTO-ASSETS REGULATION (MICA)
MiCA has applied to issuers of asset reference tokens and e-money tokens since 30 June 2024. It will apply to crypto asset service providers (CASPs) from 30 December 2024.
While MiCA is directly effective in Ireland, the European Union (Markets in Crypto-Assets) Regulations 2024 came into operation on 8 November 2024, formally designating the Central Bank of Ireland (Central Bank) as national competent authority, setting out administrative penalties, and confirming the duration of the transition period for firms that (on 30 December 2024) have already been providing crypto services. For more information on that transition period, read our previous insights here: MiCA: Grandfathering period shortened to 12 months; Department publishes Feedback Statement and MiCA: ESMA pushes for shorter grandfathering period.
ESMA recently updated its MiCA Q&A regarding the status of entities providing crypto-asset services during that transition period. It clarified that while MiCA allows CASPs that provide their services in accordance with applicable law before 30 December 2024 to continue to do so until the end of the applicable transition period or until they are granted an authorisation under MiCA, that doesn't make them CASPs for MiCA purposes, and the "requirements of MiCA are therefore not applicable to them until they are granted an authorisation pursuant to Article 63".
The Central Bank also published an update on the impact of MiCA on virtual asset service providers (VASPs) earlier this year, highlighting that only those firms that have been registered as VASPs with the Central Bank, and that provide their services in accordance with applicable law, prior to 30 December 2024 can avail of the transition period under MiCA. A VASP availing of the transition period that doesn't apply for a CASP authorisation, or whose CASP application is refused by the Central Bank, must cease VASP operations by 30 December 2025 or when their CASP application is refused, whichever is sooner.
The Central Bank has published information on its authorisation process for CASPs under MiCA, together with FAQ, and encouraged potential CASP applicants to commence engagement with the Central Bank in good time by emailing: CASPAuthorisations@centralbank.ie. The application and assessment process for VASPs has, according to the Central Bank, usually taken at least 10 months – as CASP applications will be more complex, a longer timeline is likely.
MARKETING AND ADVERTISING TO MIFID RETAIL CLIENTS
As mentioned last month, Irish-authorised MiFID investment firms, credit institutions and fund management companies that provide MiFID II services to retail clients should be working on next steps following the Central Bank's Dear CEO Letter - Common Supervisory Action on the MiFID II Marketing Communications Requirements of 10 October 2024. Our briefing sets out the steps that must be taken by in-scope firms before 31 January 2025: MiFID II Marketing and Advertising Framework: Central Bank 'Dear CEO' Letter and Next Steps.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
