ARTICLE
10 January 2025

Looking Ahead: Irish Developments

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Arthur Cox

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The Department of Finance's public consultation on the exercise of the national discretions in AIFMD II closes for feedback on 17 January 2025. Discretions covered by the consultation include whether to...
Ireland Finance and Banking

AIFMD II

The Department of Finance's public consultation on the exercise of the national discretions in AIFMD II closes for feedback on 17 January 2025. Discretions covered by the consultation include whether to:

  • Extend the list of ancillary activities and services that may be provided by an external AIFM.
  • Prohibit AIFs that originate loans from granting loans to consumers in Ireland.
  • Permit the Central Bank to allow the appointment by an Irish AIF of a depositary established in another Member State, on receipt of a reasoned request from an AIFM and subject to strict conditions.
  • Extend the list of ancillary activities and services that may be provided by a UCITS management company.

For more information, read the latest insights from our Asset Management and Investment Funds Group: AIFMD II Consultation Opens in Ireland.

CAPITAL REQUIREMENTS REGULATION

The European Union (Capital Requirements) (No. 2) (Amendment) Regulations 2024 came into force on 1 January 2025. These relate to CRR 3 (the amendments to the Capital Requirements Regulation) which is directly effective from 1 January 2025 (save for the provisions which amend the calculation of own funds requirements for the market risk regime which have been pushed out by one year to January 2026).

The related CRD 6 Directive is not due for transposition until January 2026, so it is likely to be later in 2025 before we see transposing regulations for that Directive.

CONSUMER PROTECTION CODE

The final draft 'Conduct of Business' Regulations which will replace the Consumer Protection Code and incorporate, among other codes, the Code of Conduct on Mortgage Arrears are expected to be published in January 2025.

These will be accompanied by a Feedback Statement and final draft 'Standards for Business' Regulations (part of the Individual Accountability Framework). The Regulations will be signed into law shortly afterwards, with a 12-month transition period.

For more information, read our insights: Consumer Protection Code Reform: Central Bank launches 3-month consultation and Individual Accountability Framework: Central Bank consults on Business Standards as part of CPC review.

CORPORATE GOVERNANCE CODE

The new Irish Corporate Governance Code, launched by Euronext Dublin, applies to financial years commencing on or after 1 January 2025.

Companies that have a primary equity listing on Euronext Dublin will be subject to the Irish Code. If a company is dual-listed in both Ireland and the UK, it has the option to either follow the Irish Code or the UK Code.

For more information, read the insights from our Corporate and M&A Group here: Introduction of Irish Corporate Governance Code.

FITNESS AND PROBITY

Following the publication, in July 2024, of the Enria Report arising from the independent review into the Central Bank of Ireland's fitness and probity (F&P) approval process, the Central Bank's new dedicated Fitness and Probity Unit will become operational in January 2025, at the same time that other key changes to the Central Bank's operating structure come into effect.

For more information, read our insights here: Fitness and Probity: Central Bank announces establishment of dedicated Fitness and Probity Unit and Fitness & Probity: Report published following independent review.

Separately, as part of the enhancements to the F&P framework regime under the Individual Accountability Framework, regulated firms must proactively certify that individuals carrying out controlled function (CF) and pre-approval controlled function (PCF) roles within the firm meet the Central Bank's F&P Standards. In December 2024, the Central Bank published PCF Annual Confirmation and CF Certification Guidance to assist firms in relation to submitting the Annual PCF Confirmation and the new CF Certification Confirmation through the Central Bank's Portal. The first CF Certification Confirmation submission to the Central Bank will be required in 2025. Both the PCF Annual Confirmation and CF Annual Certification facility opened on the Central Bank's Portal on 1 January 2025 to facilitate the submissions.

GUARANTEES – CREDIT REPORTING

Where a reportable credit agreement is entered on or after 1 February 2025, and a guarantee is entered into in respect of that credit agreement on or after 1 February 2025, the relevant credit information provider will be required to report data in relation to both the guarantee and the guarantor from that date onwards to the Central Credit Register operated by the Central Bank.

This requirement will apply whether the guarantee is an 'all sums due' guarantee, or a more limited form of guarantee.

For more information, read our insights here: Credit Reporting Update: Guarantees reportable from 1 February 2025.

MARKETING AND ADVERTISING TO MIFID RETAIL CLIENTS

As mentioned in our previous updates, Irish-authorised MiFID investment firms, credit institutions and fund management companies that provide MiFID II services to retail clients should be finalising their actions arising from 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.

MARKETS IN CRYPTO-ASSETS REGULATION (MICA)

MiCA applied to issuers of asset reference tokens and e-money tokens since 30 June 2024, and now applies to crypto asset service providers (CASPs) since 30 December 2024.

MiCA allows CASPs that provided their services in accordance with applicable law before 30 December 2024 to continue to do so until the end of the applicable transition period (in Ireland: 30 December 2025) or until they are granted an authorisation under MiCA. This does not however make them CASPs for MiCA purposes – ESMA recently clarified that the "requirements of MiCA are therefore not applicable to them until they are granted an authorisation pursuant to Article 63".

It is important to note that virtual asset service providers (VASPs) availing of the transition period that don'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.

MINIMUM COMPETENCY CODE

The Central Bank's Minimum Competency Code 2017 Addendum - June 2024 amended the competencies for retail financial products in Appendix 3 of the Minimum Competency Code to include competencies relating to sustainability for all retail financial products – it applies to anyone selling or providing advice on financial products or services that incorporate a sustainability element from 1 January 2025.

PAYMENTS

The Finance (Provision of Access to Cash Infrastructure) Bill will be reintroduced to Dáil Éireann in Q1 2025 once the new Government is in place.

For more information on the Bill, and the related National Payments Strategy, read our insights here: National Payments Strategy: Notable Actions / Recommendations and Access to Cash Bill published.

SCREENING ACT

The new foreign investment screening regime applies in Ireland from 6 January 2025 under the framework introduced by the Screening of Third Country Transactions Act 2023. The Act requires that certain transactions be notified to the Minister for Enterprise, Trade and Employment who will have review rights in respect of transactions that meet certain conditions. Key notification triggers include the acquisition by a third country undertaking (i.e. a non-EEA undertaking or individual) of control of an Irish asset or undertaking, or of voting rights above certain thresholds in an Irish undertaking, that impacts on particular sectors (critical infrastructure; critical technologies and dual use items; supply of critical inputs; access to sensitive information or the ability to control such information; or the freedom and pluralism of the media).

For more information, read the latest update from our Competition and Regulated Markets Group: Foreign Investment Screening Regime in Ireland to commence on 6 January 2025.

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.

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