Newsletter 07/2014
Keeping CDD up-to-date – What the hell does it mean?

Increasingly in the last few months, a large number of firms have contacted Compliance Ireland with queries around the correct interpretation of keeping customer due diligence up to date. It is believed that the fact that the Data Protection Commissioner received a large number of complaints from customers of banks who received letters requesting up-to-date customer due diligence documentation sparked these queries. The question that needs to be answered is what is a firm to do? Unfortunately, there has been no clear guidance on this. Therein lies the problem.

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Central Bank News
Central Bank announces appointment of Director of Insurance Supervision

 In a statement dated 3 July 2014, the Central Bank announced the appointment of Sylvia Cronin as the incoming Director of Insurance Supervision.


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Central Bank announces appointment of Registrar of Credit Unions

On 4 July the Central Bank announced the appointment of Anne Marie McKiernan as Register of Credit Unions.


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Central Bank Review of Sales Incentives

The Central Bank of Ireland recently completed an extensive themed inspection into sales incentives paid to direct employees of insurance companies, credit institutions and investment firms subject to the Consumer Protection Code and/or MiFID. 

The newly published "Guidelines on Variable Remuneration Arrangements for Sales Staff" should be considered by all regulated firms in assessments of remuneration arrangements in place.


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Consultation on loan originating QIAIFs

On 28 July 2014, the Central Bank published Consultation Paper 85 in relation to a new loan fund product structured as a Qualifying Investor AIF that will be available to EU and non-EU AIFMs. 

Qualifying Investor AIFs will be able to derogate from the Bank’s general prohibition on lending, subject to specific investor protections, leverage, risk management and reporting rules.


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Consultation on the adoption of ESMA’s revised UCITS guidelines

On 28 July 2014, the Central Bank published Consultation Paper 84 on the adoption of ESMA’s revised guidelines on ETFs and other UCITS issues.

ESMA’s revised Guidelines include a 20% issuer diversification rule with respect to collateral received for the purposes of Efficient Portfolio Management (“EPM”) techniques and OTC derivative transactions. 


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Compliance with Advertising Rules under Consumer Credit Regulations

On 14 July 2014, the Central Bank issued an information release on its review of the banking, moneylending and credit union sectors’ compliance with the Advertising Requirements of the EC (Consumer Credit Agreements) Regulations 2010.

Approximately 30% of 291 advertisements reviewed did not comply with the information requirements set down in the Regulations.


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Financial Crime
Compliance Ireland Develops AML Online Training for Fund Service Providers

Following a huge amount of interest from Fund Service Providers, Compliance Ireland in conjunction with Quickstep Consulting has developed an on-line AML training module. The big difference between this product and others on the market, is that it is designed and tailored specifically for fund administrators and transfer agents. The objective of the course is to present real life implementation of AML requirements and obligations in a clear, concise and interesting way with particular relevance to the funds industry.

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MiFID News
EBA final draft RTS on the margin periods of risk for treatment of clearing members' exposures to clients
On 4 July 2014, the EBA published its final draft regulatory technical standards (RTS) on the margin periods of risk used for the treatment of clearing members' exposures to clients under the Capital Requirements Regulation (CRR).

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EBA final draft RTS on conditions for assessing materiality of extensions and changes of internal approaches for market risk

On 4 July 2014, the EBA published final draft technical standards (RTS) specifying the conditions for assessing the materiality of extensions and changes of the Internal Models Approach (IMA) for market risk. These RTS complement and amend the standards on the rules for credit and operational risk published in the EU Official Journal on 20 May 2014.


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Banking
FATCA - It finally came to get us all!

On 1 July 2014, we lost the ability to close our ears and pretend that FATCA (the US Foreign Accounts Tax Compliance Act) was an SEP (Somebody Else's Problem). On that date the Financial Accounts Reporting (United States of America) Regulations 2014 came into force.


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EBA opinion on ‘virtual currencies’

On 4 July 2014, a very busy day for the EBA it published an opinion on ‘virtual currencies’ which sets out the requirements that would be needed to regulate ‘virtual currencies'. The EBA also advises that financial institutions should not buy, hold or sell them whilst no such regime is in place.

The EBA identifies more than 70 risks across several categories, including risks for users, market participants, risks related to financial integrity, such as money laundering and other financial crimes, and risks for existing payments in conventional currencies.


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Funds News
Department of Finance publishes draft ICAV Bill
On 29 July 2014, the Department of Finance published the Irish Collective Asset-management Vehicles Bill 2014. While funds can currently be structured as companies under Part XIII of the Companies Act 1990 (VCICs), the intention is to provide a funds-specific corporate vehicle.

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Intermediary News
New Handbook of Prudential Requirements for Investment Intermediaries

The Handbook of Prudential Requirements for Investment Intermediaries was published this month, and from October 2014 will replace the 2006 Handbook of Prudential Requirements for Authorised Advisors and Restricted Intermediaries.

The main changes made include the reclassification of firms subject to the Handbook as investment intermediaries, the removal of the minimum capital requirement for Authorised Advisors, changes in respect of solvency requirements and a new requirement for all investment intermediaries to hold professional indemnity insurance at the same level as that which applies to insurance intermediaries registered under the Insurance Mediation Regulations 2005. 


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Europe
ELTIFs take a step closer to being

The process of bringing about a Regulation promoting European Long-Term Investment Funds took another step forward on 25 June 2014 when the Council of the EU's Permanent Representatives Committee ("COREPER") approved the latest iteration of the proposals.


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Training
Training Schedule September to December 2014
We are now accepting bookings for our Autumn Term!

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30 July 2014
In This Issue
Central Bank News
Central Bank announces appointment of Director of Insurance Supervision
Central Bank announces appointment of Registrar of Credit Unions
Central Bank Review of Sales Incentives
Consultation on loan originating QIAIFs
Consultation on the adoption of ESMA’s revised UCITS guidelines
Compliance with Advertising Rules under Consumer Credit Regulations
Financial Crime
Compliance Ireland Develops AML Online Training for Fund Service Providers
MiFID News
EBA final draft RTS on the margin periods of risk for treatment of clearing members' exposures to clients
EBA final draft RTS on conditions for assessing materiality of extensions and changes of internal approaches for market risk
Banking
FATCA - It finally came to get us all!
EBA opinion on ‘virtual currencies’
Funds News
Department of Finance publishes draft ICAV Bill
Intermediary News
New Handbook of Prudential Requirements for Investment Intermediaries
Europe
ELTIFs take a step closer to being
Training
Training Schedule September to December 2014
Useful Links
Compliance Ireland
Compliance Ireland
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T: +353 1 425 5962
E: email@complianceireland.com
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