CBI publish outsourcing register templates
On 9 August 2022, the CBI published guidance notes on the outsourcing register template for each of the following sectors:
- markets firms or regulated financial service providers (RFSPs)
- payments and e-money institutions
- insurance and reinsurance undertakings, and
- less significant institutions
The guidance notes set out the CBI’s expectations for firm’s recording of relevant outsourcing arrangements and reporting of outsourcing to the CBI. All RFSPs are requested to submit their completed recording template to the CBI via the online reporting system by close of business on 7 October 2022. RFSPs should submit their register with all outsourcing arrangements in place as of 31 December 2021 and only include contracts/written agreements with a start date before that date. The proposed submission deadline from 2023 onwards will be end-February of each year, with the reference date of 31 December of the previous year.
CBI regulatory service standards performance report: January – June 2022
On 4 August 2022, the CBI published its regulatory service standards performance report for H1 (January – June) 2022. The report sets out the CBI’s performance against service standards that it has committed to in respect of
- authorisation of investment funds and financial services providers,
- assessment of pre-approval controlled function individual questionnaire applications, and
- contact management
The service standards that were not achieved were in relation to the processing of MiFID applications and the authorisation of Payment Firms.
Protected Disclosure (Amendment) Act 2022
On 21 July 2022, the Protected Disclosure (Amendment) Act 2022 was signed into law. An order to commence the 2022 Act 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. Companies who are within the scope of certain European Union acts, including in relation to financial services, must comply with the requirements regardless of size. The 2022 Act extends the scope of the protected disclosure regime to volunteers, unpaid trainees, board members, shareholders, members of administrative, management or supervisory bodies and job applicants (where information on a relevant wrongdoing is acquired during the recruitment process or during pre-contractual negotiations).
Monetary policy in the euro area – speech by Philip R. Lane
On 29 August 2022, Philip R. Lane, member of the executive board of the ECB, delivered remarks at the annual meeting 2022 of the Central Bank Research association. Lane noted the ECB’s over-riding goal is to make sure that monetary policy will deliver the timely return of inflation to our medium-term two-per cent target. Lane described having completed the initial stage of monetary policy normalisation the ECB September monetary policy meeting will be the start of a new phase consisting of a meeting-by-meeting (MBM) approach to setting interest rates. Lane highlighted the two elements of the MBM monetary policy:
- meeting-by-meeting assessments of the conditionally-expected medium-term path for interest rates that is required to deliver the two per cent target, and
- at a tactical level, the exact calibration of the interest rate decision should take into account the appropriate speed to close that gap – the projected terminal rate may shift in a material way from one meeting to the next and the appropriate speed may accelerate or decelerate.
Commission Delegated Regulation amending the RTS as regards the 90-day exemption for account access
On 16 August 2022, the European Commission published the Commission Delegated Regulation amending the regulatory technical standards (RTS) laid down in Delegated Regulation 2018/389 as regards the 90-day exemption for account access. The Commission Delegated Regulation:
- introduces a new mandatory exemption from the requirement to apply Strong Customer Authentication (SCA)
- limits the scope of application of the voluntary exemption in Article 10 of Delegated Regulation 2018/389 to instances where the customer accesses the account information directly
- extends the timeline for renewal of SCA from every 90 days to every 180 days where the exemptions apply.
Account service payment service providers that offer both a dedicated interface and a contingency mechanism are not required to implement the SCA exemption in the contingency mechanism, provided that they do not apply the SCA exemption in their direct customer channels. The Commission Delegated Regulation enters into force on the twentieth day following the publication in the Official Journal of the EU.
European Commission call for advice to the ESAs on greenwashing risks and the supervision of sustainable finance policies
On 15 August 2022, the European Commission published a call for advice to the ESAs on greenwashing risks and the supervision of sustainable finance policies. The European Commission requests the ESAs input, by means of a progress and final report, on greenwashing and its related risks as well as the implementation, supervision and enforcement of sustainable finance policies aimed at preventing greenwashing.
ECB published annual report on sanctioning activities in the SSM in 2021
On 12 August 2022, the ECB published its annual report on sanctioning activities in the Single Supervisory Mechanism (SSM). The report presents comprehensive statistics on sanctioning activities in relation to breaches of prudential requirements carried out in 2021 by the ECB and the national competent authorities of Member States participating in the SSM. The report finds that the focus of formal sanctioning proceedings conducted and penalties imposed in the SSM in 2021 was mainly on breaches of prudential requirements in the area of internal governance. There were also material sanctioning activities for infringements related to supervisory reporting. The report observed a rise in the pursuit of breaches in other areas of prudential supervision in 2021, including proceedings conducted related to large exposures and liquidity, penalties imposed in relation to liquidity, qualifying holdings, recovery and prudential consolidation.
ECB opinion on the establishment and functioning of the European Single Access Point
On 12 August 2022, the ECB published its opinion on the establishment and functioning of the European Single Access Point (ESAP). The ECB generally welcomed the proposal and made specific observations on the following:
- legal entity identifier (LEI) – the ECB considers that, until the LEI is further defined, the usability of ESAP is limited and recommends clarifying that entities providing the information should use the specified LEI or, in the absence of a LEI, other means to ensure unique identification
- data quality – the ECB highlighted the limitation in the data quality framework envisaged in the proposal
- compliance framework – the ECB recommends a clear and explicit framework establishing the liabilities to which the entities submitting information to the collection bodies would be subject to ensure compliance
- scope of data – the ECB recommends applying an automatised system disseminating the data required under ESAP and encourages the collection of historical data released prior to ESAP’s establishment.
ESMA provides comments on first draft of European Sustainability Reporting Standards
On 8 August 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 highlights its support for a strong materiality assessment but expresses concerns with the suggested ‘rebuttable presumption’ approach. To benefit both users of sustainability reporting and the companies that prepare the reporting, ESMA encourages EFRAG to engage with the International Sustainability Standards Board (ISSB) to ensure further alignment of the ESRS and the IFRS Sustainability Standards. EFRAG is expected to deliver its final draft ESRS to the Commission in November 2022.
European Commission publishes report following ESG ratings consultation
On 3 August 2022, the European Commission published a summary report on the targeted consultation on the functioning of the ESG ratings market in the EU and on the consideration of ESG factors in credit ratings. The report summarises the findings of the targeted consultation into the following categories:
- use of ESG ratings and dynamics of the market
- functioning of the ESG ratings market
- intervention in the ESG ratings market
- incorporation of ESG factors in credit ratings
- intervention in the credit ratings 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 the EFRAG on sustainability-related disclosure standards. The EBA agrees with the need to introduce international and European standards in response to the growing demand for relevant, reliable and comparable corporate data on sustainability-related matters, and the need for a close cooperation between the ISSB and EFRAG during the finalisation of their own consultations, so as to ensure consistency. The EBA also aims to ensure consistency between the requirements applicable to institutions under the EFRAG framework and under the Pillar 3 framework.
EBA opinion on proposal to amend the CSDR
On 28 July 2022, the EBA published its opinion on the proposed regulation amending the Central Securities Depositories Regulation (CSDR). The EBA welcomes the proposed regulation and made specific observations on the proposal, including on:
- the settlement discipline regime
- cooperation between competent authorities and relevant authorities
- the establishment of colleges of supervisors
- the provision of banking-type ancillary services
- netting, and
Sanctions imposed in response to the crisis in the Ukraine
Since February, the EU imposed a number of sanctions in response to the crisis in the Ukraine. Given that the crisis is developing and sanctions are continuing to evolve, the CBI is publishing details of new restrictive measures/sanctions that are adopted in this regard, as well as any associated EU/UN guidance, on their dedicated webpage.