Newsletter 02/2014: 27 February, 2014
Welcome
Transparency and Information - The Good and Bad from the Central Bank

It is clear that the more information that Regulated entities have, the easier it is to be compliant with their respective responsibilities. Without clear information from the Central Bank of Ireland, it is difficult for firms to know what to focus on and where to apply adequate resources. A clear example of how a firm can effectively utilise this information is the ‘Dear CEO’ AML letter published by the Bank in October 2012. Firms were advised of the key areas of AML weaknesses that existed through the financial sector. With this information in their arsenal, firms were able to do a review and gap analysis of their procedures and operations and remediate any existing issues or weaknesses. This has obviously had a positive impact on systems and controls as firms adopted appropriate action plans. With this in mind, the Central Bank has recently been guilty of both good and bad practice themselves.



It is clear that the more information that Regulated entities have, the easier it is to be compliant with their respective responsibilities. Without clear information from the Central Bank of Ireland, it is difficult for firms to know what to focus on and where to apply adequate resources. A clear example of how a firm can effectively utilise this information is the ‘Dear CEO’ AML letter published by the Bank in October 2012. Firms were advised of the key areas of AML weaknesses that existed through the financial sector. With this information in their arsenal, firms were able to do a review and gap analysis of their procedures and operations and remediate any existing issues or weaknesses. This has obviously had a positive impact on systems and controls as firms adopted appropriate action plans. With this in mind, the Central Bank has recently been guilty of both good and bad practice themselves.

Firstly the bad.

On the 7th of January 2014, a ‘Dear CEO’ letter was sent to all credit institutions and investment firms regarding a thematic inspection on Market Abuse related suspicious transaction reporting which was undertaken in 2013. The primary purpose of the review was to assess the adequacy of firms’ existing policy and procedures in relation to the identification and reporting of suspicious transactions and to increase the general level of awareness among all firms of the importance of suspicious transaction reporting to the goal of protecting market integrity. The letter outlined the observations of the Central Bank as well as specific recommendations on how firms can improve their systems and controls. It contained a lot of good information. However, a copy of the letter was not included in the publications section of the Central Bank website, nor the press release section.

From speaking to a number of compliance officers in specific firms, they were not aware of the letter, its contents or the subsequent recommendations on how to improve their systems and controls. It appears that it has not been reviewed by a large number of key personnel. The impact has been lost and a trick missed. For example, very few firms surveyed are aware that they should be in a position to demonstrate that dedicated market abuse training is delivered to all relevant staff on an annual basis. This training should cover, inter alia, (a) specific guidance on the purpose of the Regulations, (b) how to spot possible incidents of market abuse and (c) internal procedures in relation to follow-up on suspicious transaction reports. If a firm is not aware of its requirements and obligations, it is very difficult for them to implement an action plan to comply with them. It is surely easy to include all ‘Dear CEO’ letters on the publication section of the website so all regulated entities and key personnel within them have access.

Now for the good.

On the 25th of February, the Central Bank of Ireland published a programme of all themed reviews and inspections for 2014, as well as a list of enforcement priorities for 2014. The programme of themed reviews was broken down into:

• Consumer Protection;
• Markets; and
• Anti-Money Laundering Compliance

Firms can focus on these areas and tailor their compliance monitoring programme accordingly. For example, there will be a themed review of advertising requirements as outlined in the Consumer Protection Code. All relevant firms can now do its own internal review and ensure that it has robust systems and controls to ensure compliance with the Code as well as the recently published Central Bank Advertising Guidance. Similarly, Investment Firms and Fund Managers are aware that there will be an inspection on their Corporate Governance arrangements and can review any areas of weakness. Finally, as was expected a review of the risk mitigation and control frameworks which have been put in place by firms to manage their Anti-Money Laundering risk is planned. Firms can continue on their own internal AML reviews ensuring that the recommendations outlined in the October ‘Dear CEO’ have been effectively implemented. This can only be seen as a good thing both for both Regulated entities and their customers.

The Enforcement Priorities are equally as informative. For instance, serious breaches of the Fitness and Probity Regulations as well as Anti-Money Laundering requirements are likely to end up with the Enforcement division. There is a continuing enforcement focus on certain areas across almost all industry sectors, most notably, prudential requirements and systems and controls. As well as being consistently highlighted as enforcement priority areas, a large proportion of the settlements reached by the Central Bank concern breaches of requirements in these areas. The Enforcement priorities highlight the importance of enforcement within the Central Bank of Ireland’s risk based regulatory framework. As noted above, this can only be seen as a good thing.

In conclusion, knowledge is power. With so many rules, laws, codes and regulations that firms need to comply with, any recommendations or guidance from the Central Bank should be welcomed. They should be easily accessed by all so that firms can implement them. They should not be hidden away. If they are, their impact will be lost.

For a copy of the Market abuse letter click here

For a copy of the 2014 Programme of themed inspections click here

For a copy of the 2014 Enforcement Priorities click here





Central Bank News
Revised Corporate Governance Code for Credit Institutions and Insurance Undertakings
On 23 December 2013, the “Corporate Governance Code for Credit Institutions and Insurance Undertakings 2013” (the “Code”) was published by the Central Bank of Ireland. The Code revises the Corporate Governance Code for Credit Institutions and Insurance Undertakings 2010 (the "2010 Code") but will not come into effect for firms until 1 January 2015. In the meantime, the 2010 Code continues to apply. The Code continues to apply to reinsurance undertakings and excludes captives.

The revised Code contains a number of important changes.

On 23 December 2013, the “Corporate Governance Code for Credit Institutions and Insurance Undertakings 2013” (the “Code”) was published by the Central Bank of Ireland (the "Bank"). The Code revises the Corporate Governance Code for Credit Institutions and Insurance Undertakings 2010 (the "2010 Code") but will not come into effect for firms until 1 January 2015. In the meantime, the 2010 Code continues to apply. The Code continues to apply to reinsurance undertakings and excludes captives.

The revised Code follows a review by the Bank of submissions to Consultation Paper 69 ("CP69") last year. As with the 2010 Code, it aims to provide guidance to enable firms to ensure that robust arrangements are in place for direction, control and management of the institution and to ensure that appropriate oversight is achieved by the board of directors and senior management. 

The Code contains a number of important changes which include the following:

Section 8: Chairman

The 2010 Code prohibits the Chairman of a credit institution or insurance undertaking from holding a position of Chairman or Chief Executive Officer ("CEO") for another institution at the same time.

Due to practical issues arising out of this requirement, the Bank has revised the prohibition to provide that the Chairman of a subsidiary of groups designated as Medium-High, Medium-Low or Low Impact institutions can hold more than one Chairman position. The additional institution must be in the same group and the Chairman's ability to fully discharge his or her duties must not be compromised by his or her holding more than one Chairman position. Prior approval must also be obtained from the Central Bank if an individual wishes to hold more than one Chairman position.

Firms should note that the prohibition remains in place for the Chairman of a High Impact firm. 

Section 9: CEO

The 2010 Code prevents a firm's CEO from holding another CEO position in a credit institution or insurance undertaking at the same time. Taking into account feedback from Central Bank supervisors and experience of firms in practice, the Bank has removed this absolute prohibition for Medium-Low and Low Impact firms where the nature, scale and complexity of a firm does not justify a full-time CEO.

Such CEOs may be able to hold up to 2 additional CEO roles in other Medium-Low or Low Impact credit institutions or insurance undertakings. Prior approval of the Central Bank will be required and the individual concerned must be able to show that they have sufficient time to fulfil their role.

Section 12: Chief Risk Officer ("CRO")

A firm must now appoint a CRO and the Code sets out details of this role and the responsibilities that apply. The CRO must be a member of senior management and will be specifically responsible for managing the firm's risk management function. This includes responsibility for maintaining and monitoring the effectiveness of the institution's risk management system.

In relation to this requirement, firms will welcome the fact that the Central Bank acknowledges that a full-time CRO may not be required in firms not designated as High Impact. As such, whether a full-time CRO is required for such firms will depend on the nature, scale and complexity of a firm's operations. The CRO role may be shared with the role of Chief Actuary. The firm must notify the Central Bank if the role of CRO is going to be shared in this manner.

Section 13: Board Responsibilities

The Central Bank has clarified its expectations as to board responsibilities and invites comments on its proposed insertions. 

Insertions include responsibility for "an adequate and effective internal control framework, that includes well-functioning risk control, compliance and internal audit functions as well as an appropriate financial reporting and accounting framework". This insertion is significant given the fact that the Bank noted the inadequacy of internal controls in firms in a number of settlement agreements it entered into in the last three years in relation to different regulatory matters. Another significant insertion in this regard is the proposed requirement for "a robust and transparent organisational structure with effective communication and reporting channels".

Section 14.9: Board Diversity

CP69 raised the issues of board diversity, and particularly gender diversity, and invited commentary from interested parties. The revised Code requires a firm's board, or if one exists the nomination committee, to establish a written diversity policy in relation to the selection of persons for nomination to become members of the board.

The issue of board diversity principally concerns the effort to prevent a situation of "group-think", whereby diversity (in age, gender, nationality, professional and educational background, skillsets and experience and others) is seen to lead to and ensure that issues and proposals presented to the board are approached from a number of different perspectives.

Firms will have to bear in mind that it is important that each member of the board also has the necessary skills and expertise required to justify their position on the board. The revised Code requires High Impact firms to have a formal skills matrix in place to ensure that the board has an appropriate skills mix. This matrix should be taken into consideration in any appointment process.

Section 16: Board Meetings

Under the 2010 Code, Non-High Impact firms are required to hold a minimum of one board meeting per quarter. The Bank acknowledges that due to the nature of the business of some firms, business activity may be greater in certain parts of a year and so it has amended this requirement to one board meeting per half year with discretion being given to each firm as to when to hold the other two required board meetings. This will enable firms to choose the timing of its board meetings to cater to levels of business activity.

The 2010 Code requires High Impact firms to hold a minimum of 11 board meetings per calendar year. Having considered the practicalities and other issues arising from this requirement the Bank has reduced this requirement to 6. A minimum of 3 meetings must be held in each six month period. The Central Bank has reserved the power to require a firm to increase the frequency of its board meetings.

Section 19: Committees of the Board

The new Code requires cross-committee membership in firms:

  • in all firms at least one member of the audit committee must be a member of the risk committee and vice versa. This is important as the risk committee must draw on the work of the audit committee when determining whether the firm has the capacity to manage and control risks within the agreed risk strategy. In High Impact firms, the Chairman of these committees cannot be the same person at the same time. This is to prevent a situation where one individual has undue influence on the outcome of committee decisions;
  • in High Impact firms the Chairman of the remuneration committee must be a member of the risk committee and vice versa;
  • in all firms the audit and risk committees must have a minimum of three members. Where a firm has a small board of 5 members, the full board (including the Chairman and the CEO), can sit as the audit and/or risk committee. Given that this is permitted only for firms with boards of 5 members, it is envisaged that this permission would only apply to lower impact firms.
  • a firm's risk committee and audit committee each will be required to have a minimum of three members.

Cross-committee membership is viewed as a good way to ensure that the knowledge and appreciation of board members in relation to risk considerations across the firm is broadened. Such cross membership could also lead to more effective discussion of issues and proposals at board meetings.

Section 23: Risk Committee

The risk committee has responsibility for providing oversight of the firm's risk management function and advice to the board in relation to same, including on the firm's risk appetite and future risk strategy.

Then 2010 Code requires that there be an appropriate representation of non-executive and executive directors on the committee having regard to the nature, scale and complexity of the firm's business. The Bank has amended this to require firms to ensure that the risk committee is comprised of a majority of non-executive directors and that the Chairman is also a non-executive director. 

Section 26: Annual Compliance Statement

The 2010 Code requires that this Statement be submitted at the end of the calendar year. However, the Bank acknowledges that in some firms the financial reporting period may differ from the calendar year and so this requirement can create problems for firms in terms of an increased administrative burden. Under the revised Code firms will be permitted to change the submission date to coincide with their financial year.

Other amendments to the 2010 Code include:

  • Clarification that governance arrangements in the firm must promote an appropriate risk and compliance culture at all levels of the firm;
  • Clarification that where a director is unable to attend all board meetings in person due to his or her location, such director can attend via videoconferencing or teleconferencing;
  • Directorships held in the public interest on a voluntary and pro bono basis must be notified to the Central Bank even though such directorships are not included for the purpose of calculating the number of directorships held for the purposes of the limits set under the Code;
  • Changing the requirement to formally review membership of any member of the board where they have served on the board for 9 years or more to a requirement to formally review the independent non-executive members of the board after such period;
  • A requirement that the board will identify and ensure that risks are regularly reviewed and tested and are addressed by contingency plans by the firm.
Click here for a copy of the “Corporate Governance Code for Credit Institutions and Insurance Undertakings 2013”.

 





Financial Crime
Central Bank to Regulate Trust and Company Service Providers for AML
This month, the Department of Justice published Regulations providing that the Central Bank of Ireland would regulate, for anti-money laundering purposes, trust and company service providers that are 100% subsidiaries of a credit or financial institution.
This month, the Department of Justice published Regulations (Statutory Instrument 79/2014) providing that the Central Bank of Ireland would regulate, for anti-money laundering purposes, trust and company service providers that are 100% subsidiaries of a credit or financial institution.

The Department of Justice has, until now, been the competent authority for such service providers under anti-money laundering legislation. The Department is in the process of arranging for the handover of all relevant files to the Central Bank. The Regulations will become effective on 3 March 2014.

Click here to view the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (Competent Authority) Regulations 2014.



Princess Cristina of Spain in Court Over Alleged Money Laundering
Last week, we witnessed a historic judicial hearing in which a European royal, a member of the Spanish Monarchy, testified as a suspect in a criminal case in relation to a corruption scandal involving her husband Iñaki Urdangarin, namely alleged tax fraud and the laundering of embezzled money. The hearing was called by Judge Jose Castro who has continued to investigate the matter despite a decision taken by Spanish prosecutors not to pursue the case.

Last week, we witnessed a historic judicial hearing - albeit, held in private - in which a European royal, a member of the Spanish Monarchy, testified as a suspect in a criminal case in relation to a corruption scandal involving her husband Iñaki Urdangarin, namely alleged tax fraud and the laundering of embezzled money. The hearing was called by Judge Jose Castro who has continued to investigate the matter despite a decision taken by Spanish prosecutors not to pursue the case.

Urdangarin is suspected, along with his former business partner, of siphoning off over €6 million in public funds through the Noos Foundation. The Foundation is a charitable organisation set up to put on sports business conferences in Spain and Urdangarin is suspected of overcharging for services and charging for services never provided. It is also alleged that some of the funds in question were laundered through a shell company owned by Urdangarin and Princess Cristina and that embezzled money was being used to fund the royal couple's lavish lifestyle.

Under anti-money laundering legislation, designated persons are obliged to have controls in place to allow them to identify whether customers or beneficial owners of customers are Politically Exposed Persons (“PEPs”) within the meaning of the legislation. Immediate family members and close associates of PEPs are also considered to be PEPs for the purposes of the legislation. If a customer is identified as a PEP, the designated person must carry out enhanced customer due diligence on them both prior to the establishment of a business relationship with the customer, and on an ongoing basis thereafter. This is to ensure that the customer’s activities do not involve money laundering.

In October 2013, AXA MPS Financial Ltd was fined €50,000 by the Central Bank of Ireland for breaches of anti-money laundering legislation. These breaches included failures to have appropriate measures in place to determine whether customers or beneficial owners of customers were PEPs or were connected with PEPs before a business relationship was established with the customer.

The case involving Princess Cristina serves as a reminder to firms of why stricter measures are applied to those of PEP status. It is alleged that Urdangarin gained powerful connections as husband of a member of the Spanish Monarchy and used that position to win lucrative no-bid public contracts. Cristina herself The Central Bank in Ireland does not require a finding of involvement in money laundering to impose a penalty on a firm. Lack of robust policies and procedures for compliance with the legislation will suffice.




Ted Cunningham Pleads Guilty to Money Laundering
Nearly five years after Ted Cunningham was originally convicted of laundering £3 million in connection with the now notorious December 2004 "Northern Bank Robbery", charges of which he denied, Mr. Cunningham, on 26 February 2014, pleaded guilty to two of the original ten charges.
Nearly five years after Ted Cunningham was originally convicted of laundering £3 million in connection with the now notorious December 2004 "Northern Bank Robbery", charges of which he denied, Mr. Cunningham, on 26 February 2014, pleaded guilty to two of the original ten charges.

In February 2005, two months after the robbery, Gardaí obtained a warrant to search Cunningham's home and found £2.3 million in his basement. During his trial on charges of money laundering, Cork Criminal Court heard that there was premeditation and planning involved in the offences committed, that Cunningham "stored money, he gave money to others to store, bought cars, used money as security, and obtained euro value for the northern sterling" and that he "persisted to the end with a concocted alibi." However, his conviction was quashed on appeal due to a technical flaw in the warrant used to search his home.  As a result, the search warrant was found to be invalid by the Court of Criminal Appeal, and while a retrial was ordered on nine of the ten charges, the tenth - relating to the £2.3 million found in his home - was not to be retried.

The two charges to which he pleaded guilty this month relate to the offence of money laundering while being reckless as to whether the money handled represented the proceeds of crime. While these charges represent much lesser values than the amount he was originally convicted of laundering, the plea represents a victory for the DPP.

As noted by Compliance Ireland previously, a robust anti-money laundering framework is a vital part of a regulated firm's governance structure if it is to avoid a monetary or other administrative sanction from the Central Bank of Ireland. Other competent authorities include the Department of Justice, the Law Society of Ireland for solicitors and the Bar Council of Ireland for barristers.

Firms are required to carry out appropriate levels of customer due diligence on customers prior to entering into a business relationship with them. Firms must also carry out ongoing monitoring on existing customers to ensure that customer activity is in line with the firm's knowledge of the customer, its business and patterns of transactions. This includes a requirement to identify the source of funds for transactions involving the customer and even the source of wealth of the customer or beneficial owner in some cases. These requirements are designed to allow a firm to identify suspicious activity that may be linked to money laundering or terrorist financing and to make a prompt report to the Gardaí and Revenue Commissioners where deemed appropriate.

The Central Bank of Ireland has to date imposed financial penalties on three firms for breaches of anti-money laundering legislation. In the case of UBS International Life Ltd in June 2012, breaches included failures to adopt adequate policies and procedures in relation to the identification of suspicious transactions. Community Credit Union was fined in December 2012 for breaches which included failures to monitor dealings with customers with whom it had business relationships including scrutinising transactions and source of wealth or funds for transactions on an ongoing basis. Controls in place must allow staff to take appropriate measures to ensure that they know the customer and that the customer's activities make sense. Where a staff member has any suspicion of money laundering, they must be aware of and have recourse to an internal reporting procedure.




Enforcement
Financial Services Ombudsman Can Name and Shame
The Financial Services Ombudsman was granted the power to name and shame firms against whom complaints are made and substantiated as of 1 September 2013. The Office of the Ombudsman has done just that in its Bi-Annual Review - 1st July to 31st December 2013 published today.

The Financial Services Ombudsman ("FSO") was granted the power to name and shame firms against whom complaints are made and substantiated as of 1 September 2013. The Office of the Ombudsman has done just that in its Bi-Annual Review - 1st July to 31st December 2013
published today.

The new power was granted under Section 72 of the Central Bank (Supervision and Enforcement) Act 2013 and allows the FSO to identify regulated firms who, in the preceding financial year, have had at least 3 complaints substantiated or partly substantiated against them. The reasoning behind the new power is that firms will be more likely to ensure that wrongdoing is easily rectified and less likely to be repeated if there is a risk that the firm will be publicly named by the Ombudsman in his reports.

The reporting period in the most recent Bi-Annual Review concerns the period from 1 September, 2013 to 31 December, 2013. Despite the period spanning just 4 months, a number of firms have been named with well over the required 3 complaints substantiated and/or partly substantiated. These include:

  • Avant Tarjeta EFC S.A.U. trading as AvantCard - 6 complaints substantiated and 27 partly substantiated;
  • AIB plc - 5 substantiated and 19 partly substantiated;
  • PTSB plc - 5 substantiated and 7 partly substantiated;
  • Ulster Bank Ireland Ltd - 3 substantiated and 12 partly substantiated; and
  • Bank of Ireland - 3 substantiated and 11 partly substantiated.

How to Avoid Being Named and Shamed

The firm should ensure that it has formal internal complaints handling procedures in place that comply with the Consumer Protection Code 2012. In designing its complaints procedures, the firm should also have regard to the complaints procedures used by the Office of the FSO.

The firm should diarise regular reviews of its complaints procedures to ensure that they are followed by relevant members of staff, that they are up to date, fit for purpose and continue to be appropriate to the size of the firm. These procedures must be easily accessible to the consumer and a member of senior management must be responsible for ensuring that procedures are fair and proper. All staff should be aware of complaints procedures in place and those handling complaints should receive appropriate training.

It is also vital that the firm carries out appropriate complaints analysis and that procedures are in place to enable the firm to construct and execute remedial plans designed to deal with issues identified through the complaints process. Robust records of all complaints received and dealt with should be kept by the firm to ensure that it can demonstrate compliance if challenged.

Click here to view the FSO's Bi-Annual Review July to December 2013





Insurance News
12 Month Non-Solicitation Period for Insurance Brokers Confirmed
Lengthy non-solicitation periods may hold water following a recent UK court decision in which the court found in favour of the employer insurance brokers against its employee. The court enforced a twelve month non-solicitation period post-termination of employment in respect of certain clients of the firm. Given that UK judgements are considered persuasive in Irish courts, the decision is likely to have a mirrored impact on the insurance industry in Ireland.
Lengthy non-solicitation periods contained in employment contracts may hold water following a recent UK court decision in which the court found in favour of the employer insurance brokers against its employee. The court enforced a twelve month non-solicitation period post-termination of employment in respect of certain clients of the firm. Given that UK judgements are considered persuasive in Irish courts, the decision is likely to have a mirrored impact on the insurance industry in Ireland.

The case in question is Romero Insurance Brokers Limited v Templeton [2013] EWHC 1198. The case concerned a restrictive covenant in Templeton's employment contract with the firm which prohibited him, for a period of twelve months, from soliciting or doing business with clients he had dealt with up to six months before he finished working for the firm. Templeton had commenced employment at another insurance company the day after he finished at Romero and had brought a number of ex-clients of the firm with him. 

Employers have to be very careful when drafting such restrictive covenants as their enforceability is linked to what is considered reasonable and the courts have on a number of occasions made changes to such covenants to be more limited in time, space or subject matter. The degree of protection they afford to the employer should only be what is reasonably necessary in the circumstances. In the Romero case, weight was given to the fact that insurance contracts generally have twelve month renewal cycles. As such, the court found that a once yearly opportunity to establish meaningful client contact applied here. Due to this particular characteristic, insurance contracts could contain appropriately worded twelve month restrictions on client solicitation. Employees were granted some comfort in the court stating that anything longer however would be considered excessive.




Europe
EBA proposes a definition of 'fixed overheads' and capital charge for use of tied agents

On 29 January 2014, the first draft Regulatory Technical Standards (RTSs) for CRD IV in 2014 was published by the European Banking Authority. While the majority of RTSs refer to esoteric aspects of banking, this RTS defines what is meant by 'Fixed Overheads' - a key determinant of cpaital for MiFID firms.


This RTS fleshes out the definition of Fixed Overheads - a key determinant of capital for investment firms under Article 97(4) of the Capital Requirements Regulation (CRR). Because of a linkage between legislation focused on this Article, the definition will also be applicable to UCITS Management Companies and AIF Management Companies.

The definition mostly confirms existing understanding of fixed overheads being total non-extraordinary accounting expenses less certain deductions such as depreciation and discretionary staff bonuses.

However the RTS also proposes the inclusion of an add-on for firms which use tied agents.

The thinking behind this is that business carried out through a tied agent exposes an investment firm to risk in the same manner as business carried out by the investment firm itself. Furthermore, there should not be incentives for firms to reduce their capital requirements through the use of these agents. Therefore, a firm should maintain a capital component for tied agents.

As calculating fixed overheads for tied agents in the same manner as for investment firms themselves would pose many practical problems, the use of a fixed percentage of 35% of all fees per tied agent is proposed instead.

Click here to download the draft RTS.




EBA publishes standard on classes of instruments eligible for variable remuneration use under CRD IV

In order to stop banks and investment firms incentivising their employees to take inappropriate risks, the Capital Requirements Directive ("CRD IV") Remuneration Policy requires a portion of bonuses to be deferred and paid in shares or share-like instruments rather than cash. To avoid cirmcumvention of the requirements by inventive firms, the EBA has published a draft Regulatory Technical Standard ("RTS") on the subject.


This, the second draft RTS issuing from the EBA so far in 2014, addresses the classes of instruments that are appropriate to be used for the purposes of variable remuneration under Article 94(2) of the CRD IV Directive.

CRD IV requires that at least 50% of the variable remuneration of staff whose professional activities have a material impact on the institution’s risk profile must be awarded in non-cash instruments. In accordance with Article 94(1)(l) of the Directive, the instruments must consist of a balance of (i) shares, share-linked or equivalent non-cash instruments and, (ii) where possible, Additional Tier 1 (AT 1), Tier 2 or other instruments, subject to the conditions set out in the CRD and this draft RTS.

The draft RTS introduce requirements for AT 1, Tier 2 and Other Instruments, to ensure that they appropriately reflect the credit quality of the institution, and define for Tier 2 and Other Instruments the write-down, write-up and conversion mechanisms. Specific requirements have been designed for Other Instruments that do not count as regulatory own funds under the Capital Requirements Regulation, which defines such things.

Click here to download the draft RTS.





Training
Training March - June 2014

MARCH

11th March, Thurs - Introduction to Financial Services Regulation in Ireland, Half Day

12th March, Wed - Complaints Handling & Treating Customers Fairly, Half Day

13th March, Thurs - Dignity in the Workplace, Brief

13th March, Thurs – AML in Practice: Implementation of Current Legislation and Guidance, Brief

19th March, Wed – Consumer Protection Code – Advertising, Half Day

20th March, Thurs - Risk-Based Compliance Monitoring for Financial Institutions, Full Day

25th March, Tues - Minimum Competency Code, Half Day

26th March, Wed - Ethics, Brief

27th March, Thurs - Capital Requirements Directive III FOR Investment Firms, Full Day

 

APRIL

8th April, Tues - E-Money Directive, Brief

8th April, Tues - Payment Services Directive, Brief

9th April, Wed - Important Employment Law Issues and How to Address Them, Half Day

10th April, Thurs - Role of the Compliance Officer - for Banks and Investment Firms, Half Day

15th April, Tues - Consumer Protection Code 2012, Half Day

16th April, Wed - Central Bank Inspections & Enforcement, Half Day

17th April, Thurs - Anti-Money Laundering/Counter-Terrorist Financing, Full Day

22nd April, Tues - PRISM, Lunch Brief

23rd April, Wed - Corporate Governance, Half Day

24th April, Thurs - Understanding Solvency II, Full Day

29th April, Tues - Data Protection and How to Conduct a Data Protection Audit, Full Day

30th April, Wed - Code of Conduct on Mortgage Arrears, Brief

 

MAY

1st May, Thurs - Role of the Compliance Officer for Insurance Firms, Full Day

7th May, Wed - AML in Practice: Implementation of Current Legislation and Guidance, Brief

8th May, Thurs - Understanding MiFID, Full Day

13th May, Tues - Corporate Governance, Half Day

14th May, Wed – Consumer Protection Code – Advertising, Half Day

15th May, Thurs - Implementing UCITS IV, Half Day

20th May, Tues - Implementing the Directive for Alternative Investment Fund Managers (AIFM), Half Day

21st May, Wed - Payment Services Directive, Brief

22nd May, Thurs - Developments in MiFID 2, Brief

23rd May, Wed - Establishing the Internal Audit Function, Half Day

27th May, Tues - Complaints Handling & Treating Customers Fairly, Half Day

28th May, Wed - Anti-Money Laundering Refresher Course, Brief

29th May, Thurs - Directors Training - Anti-Money Laundering/Counter Terrorist Financing, Brief

 

JUNE

4th June, Wed - Ethics, Brief

5th June, Thurs - Introduction to Financial Services Regulation in Ireland, Half Day

10th June, Tues - Implementing Fit & Proper in your Business, Brief

10th June, Tues - PRISM, Lunch Brief

11th June, Wed - Understanding Funds in Ireland, Half Day

12th June, Thurs - Directors Duties and Corporate Governance, Full Day

17th June, Tues - Dignity in the Workplace, Brief

18th June, Wed - Consumer Protection Code 2012, Half Day

19th June, Thurs - Data Protection and How to Conduct a Data Protection Audit, Full Day

24th June, Tues - Central Bank Inspections and Enforcement, Half Day

25th June, Wed - Risk-Based Compliance Monitoring for Financial Institutions, Full Day

26th June, Thurs - Anti-Money Laundering/Counter-Terrorist Financing, Full Day


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