CBI releases outsourcing register templates
On August 9, 2022, the CBI published guidance notes on the outsourced register model for each of the following sectors:
- markets companies or regulated financial services providers (DPs)
- payment and electronic money institutions
- insurance and reinsurance companies, and
- less important institutions
The guidance notes set out the CBI’s expectations regarding company registration of relevant outsourcing arrangements and reporting of outsourcing to the CBI. All RFSPs are requested to submit their completed registration template to the CBI via the online reporting system by the close of business on 7 October 2022. RFSPs must submit their register with all outsourcing arrangements in place by 31 December 2021 and include only written contracts/agreements. with a start date prior to this date. The proposed deadline for submission from 2023 will be the end of February each year, with a reference date of December 31 of the previous year.
CBI Regulatory Service Standards Performance Report: January to June 2022
On August 4, 2022, the CBI published its Regulatory Service Standards Performance Report for the first semester (January – June) 2022. The report presents the performance of the CBI against the service standards to which it has committed in regards to
- the authorization of investment funds and financial service providers,
- assessment of pre-approval controlled function individual questionnaire requests, and
- contact management
The service standards that were not met concerned the processing of MiFID requests and the authorization of payment companies.
Protected Disclosure (Amendment) Act 2022
On July 21, 2022, the Protected Disclosure (Amendment) Act 2022 was signed into law. A coming into force order for the 2022 law is expected shortly. The 2022 Act transposes the EU Whistleblowing Directive into Irish law. Companies with 50 or more employees will be required to establish formal channels and procedures for their employees to make protected disclosures. Businesses that fall within the scope of certain EU acts, including in relation to financial services, must comply with the requirements regardless of their size. The 2022 law extends the scope of the protected disclosure regime to volunteers, unpaid trainees, administrators, shareholders, members of administrative, management or supervisory bodies and job seekers (when information on a misconduct relevant are acquired during the recruitment process or during pre-contract negotiations).
Monetary policy in the euro area – speech by Philip R. Lane
On August 29, 2022, Philip R. Lane, Member of the Executive Board of the ECB, delivered a speech at the 2022 annual meeting of the Central Bank Research association. Lane noted that the ECB’s overriding objective is to ensure that monetary policy will ensure the timely return of inflation to our medium-term target of 2%. Lane described having completed the initial phase of monetary policy normalization, the ECB’s monetary policy meeting in September will mark the start of a new phase consisting of meeting by meeting (MBM) method of setting interest rates. Lane highlighted the two elements of MBM monetary policy:
- meeting-by-meeting assessments of the conditional medium-term interest rate path required to reach the 2% target, and
- at a tactical level, the exact calibration of the interest rate decision should consider the appropriate speed to close this gap – the projected terminal rate may change significantly from meeting to meeting and the appropriate speed can accelerate or decelerate.
Commission Delegated Regulation amending the RTS as regards the 90-day account access exemption
On 16 August 2022, the European Commission published the Commission Delegated Regulation amending regulatory technical standards (RTS) provided for by Delegated Regulation 2018/389 with regard to the 90-day exemption for account access. Commission Delegated Regulation:
- introduces a new mandatory exemption from the obligation to apply strong customer authentication (SCA)
- limits the scope of the voluntary exemption of Article 10 of Delegated Regulation 2018/389 to cases where the customer directly accesses account information
- extends the SCA renewal deadline from every 90 days to every 180 days when exemptions apply.
Account service payment service providers that offer both a dedicated interface and an emergency mechanism are not required to implement the SCA exemption in the emergency mechanism, provided that they do not not apply the SCA exemption in their direct customer channels. The Commission Delegated Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the EU.
The European Commission calls for advice to ESAs on the risks of greenwashing and the supervision of sustainable finance policies
On August 15, 2022, the European Commission published a call for advice from the ESAs on the risks of greenwashing and the supervision of sustainable finance policies. The European Commission is seeking input from ESAs, through a progress report and a final report, on greenwashing and its related risks as well as on the implementation, oversight and enforcement of sustainable financing aimed at preventing greenwashing.
The ECB published an annual report on sanctions activities in the SSM in 2021
On 12 August 2022, the ECB published its annual report on sanctioning activities under the Single Supervisory Mechanism (MSS). The report presents comprehensive statistics on sanctioning activities related to breaches of prudential requirements committed in 2021 by the ECB and the national competent authorities of the Member States participating in the SSM. The report finds that formal sanctioning procedures conducted and sanctions imposed in the SSM in 2021 mainly focused on breaches of prudential requirements in the area of internal governance. There has also been significant sanctioning activity for infractions related to monitoring reports. The report observed an increase in continued breaches in other areas of prudential supervision in 2021, including procedures conducted related to large exposures and liquidity, liquidity sanctions imposed, qualifying holdings, recovery and prudential consolidation.
ECB Opinion on the establishment and operation of the Single European Access Point
On 12 August 2022, the ECB published its opinion on the establishment and operation of the Single European Access Point (ESPA). The ECB generally welcomed the proposal and made specific comments on the following points:
- legal entity identifier (LEI) – the ECB considers that, until the LEI is defined more precisely, the usability of the ESAP is limited and recommends specifying that entities providing the information must use the specified LEI or, if absence of LEI, other means to ensure unique identification
- data quality – the ECB highlighted the limitations of the data quality framework envisaged in the proposal
- compliance framework – the ECB recommends a clear and explicit framework setting out the responsibilities to which entities submitting information to collecting bodies would be subject to ensure compliance
- scope of data – the ECB recommends the application of an automated system disseminating the data required under the ESAP and encourages the collection of historical data published before the implementation of the ESAP.
ESMA comments on the first draft of European sustainability reporting standards
On August 8, 2022, ESMA published its response to the European Reporting Advisory Group (EFRAG) public consultation on the first set of draft European sustainability reporting standards (ESRS). ESMA underlines its support for a robust materiality assessment, but expresses concern about the suggested “rebuttable presumption” approach. To benefit both users of sustainability reports and companies preparing the reports, ESMA encourages EFRAG to engage with the International Sustainability Standards Board (ISSB) to ensure better alignment of ESRS and IFRS sustainability standards. EFRAG is expected to submit its final draft ESRS to the Commission in November 2022.
The European Commission publishes a report following the consultation on ESG ratings
On August 3, 2022, the European Commission published a summary report on the targeted consultation on the functioning of the ESG ratings market in the EU and the consideration of ESG factors in credit ratings. The report summarizes the findings of the targeted consultation in the following categories:
- use of ESG ratings and market dynamics
- functioning of the ESG ratings market
- intervention in the ESG ratings market
- integration of ESG factors into credit ratings
- intervention in the credit rating market
EBA responds to ISSB and EFRAG consultations on sustainability-related disclosure standards
On 29 July 2022, the EBA published its response to the consultations of the International Sustainability Standards Board (ISSB) and EFRAG on sustainability reporting standards. The EBA agrees on the need to introduce international and European standards in response to the growing demand for relevant, reliable and comparable corporate data on sustainability issues, and the need for close cooperation between the ISSB and EFRAG when finalizing their own consultations, to ensure consistency. The EBA also aims to ensure consistency between the requirements applicable to institutions under EFRAG and under Pillar 3.
EBA opinion on the CSDR amendment proposal
On 28 July 2022, the EBA published its opinion on the proposal for a regulation amending the regulation on central securities depositories (CSDR). The EBA welcomes the proposed regulation and has made specific comments on the proposal, in particular on:
- the settlement discipline regime
- cooperation between the competent authorities and the authorities concerned
- the creation of colleges of supervisors
- the provision of ancillary services of the banking type
- fillet, and
Sanctions imposed in response to the crisis in Ukraine
Since February, the EU has imposed a number of sanctions in response to the crisis in Ukraine. As the crisis develops and sanctions continue to evolve, the CBI is publishing details of new restrictive measures/sanctions adopted in this regard, along with any associated EU/UN guidance, on their dedicated webpage.