Some approaching compliance deadlines

  • 31 December 2017. Corporate Governance – completion of reviews of board and individual director performance. Under the Irish Funds Corporate Governance Code, the overall Board's performance and that of individual members must be reviewed annually with a formal documented review and a review of the chairperson taking place at least once every three years.
  • 31 December 2017. Anti-Money Laundering/Counter Terrorist Financing (AML/CTF) - collective investment schemes and management companies should be aware of the regulatory expectation to offer training to their boards on the law relating to AML/CTF on an annual basis (and at such other times as may be appropriate). Boards should also ensure that they have considered whether to adopt a board level AML/CTF policy and where the board has adopted such a policy, that it receives appropriate confirmations from relevant persons and that it is subject to periodic review.
  • 31 December 2017. Business Plan/Programme of Activity - UCITS management companies, self-managed UCITS, AIFMs and internally managed AIFs, where they have not already done so, may need to:
    • complete their annual performance review on service providers
    • obtain annual confirmations from service providers and relevant persons in accordance with their business plan/programme of activity
    • complete onsite visits with service providers
    • ensure adoption of valuation policy
    • make disclosure in respect of connected party transactions
  • 31 December 2017. Fitness & Probity - management companies, AIFMs, self-managed/internally-managed UCITS/AIFs and other regulated financial service providers (RFSPs), where they have not already done so, will need to obtain their annual certification from persons performing PCFs (e.g. directors) and CFs (e.g. money laundering reporting officer and Company Secretary) that they are aware of the Fitness and Probity Standards, agree to continue to abide by those Standards and will notify the Board if they no longer comply. This forms part of ongoing performance monitoring set out in Section 22 of the Guidance on Fitness and Probity Standards.
  • The Annual PCF Confirmation Return due date (for the year ending 31/12/17) for Investment Funds and Fund Service Providers (including AIFMs and UCITS management companies) has not yet been published on the Central Bank webpage (The 2016 return had a filing deadline of 28 February 2017). The Annual PCF Confirmation Return (which is made via the ONR system) involves a mandatory declaration to confirm the following:
    • That the CEO, or equivalent, has confirmed in writing that the RFSP has brought the Standards to the attention of all PCFs.
    • That the RFSP is satisfied on reasonable grounds that all PCFs comply with the Standards.
    • That the written agreement of all PCFs to abide by the Standards has been obtained.

That all necessary due diligence has occurred and that the RFSP will investigate any fitness and probity concerns, take appropriate action and notify the Central Bank of any action taken without delay.

  • 1 January 2018. PRIIPs KID. Investment funds made available to retail investors within the European Union fall within the scope of the PRIIPs Regulation, whether those investment funds are established prior to, or after, 1 January 2018. See our November question of the month for more detail.
  • 1 January 2018. Benchmarks Regulation - takes effect (subject to transitional provisions). See our July Question of the Month for more details.
  • 3 Jan 2018. MiFID II - comes into effect and may trigger changes to fund documentation such as prospectus disclosures and investment management and distribution agreement updates to ensure that MiFID authorised service providers comply with the new requirements.
  • 3 Jan 2018. EMIR margin RTS – the requirement to exchange mandatory variation margin (VM) for physically-settled FX forwards applies from 3 January 2018. The ESAs are aware that this poses difficulties for some end-users and are reviewing the Regulatory Technical Standards on risk mitigation techniques for OTC derivatives not cleared by a central counterparty (RTS). They intend to develop draft amendments to these RTS that align the treatment of variation margin for physically-settled FX forwards with the supervisory guidance applicable in other key jurisdictions. The ESAs intend to submit these draft amendments to the European Commission by 24 December 2017. Accordingly, as regards difficulties that in particular certain end-users are facing, the ESAs expect competent authorities to generally apply their risk-based supervisory powers in their day-to-day enforcement of applicable legislation in a proportionate manner.
  • 19 February 2018. UCITS KIID - A UCITS must update its key investor information document (KIID) on an annual basis for each sub-fund / standalone fund within 35 business days of the end of each calendar year. This year this annual update of the KIID must be filed no later than 19 February 2018 (where required). Any update to the KIID filed with the Central Bank must be translated (as necessary) and filed in any other host jurisdictions where the UCITS is registered to market its shares and uploaded on the UCITS' website.
  • 25 May 2018. GDPR - the General Data Protection Regulation will come into force on 25 May 2018 and will introduce a sweeping new data protection regime. See our In Focus Paper for details of steps funds may take to prepare for the new regime.
  • 21 July 2018. MMF Regulation. The MMF Regulation must be implemented by EU member states by 21 July 2018. The MMF Regulation introduces new requirements for MMFs in particular, portfolio composition, valuation of assets, diversification, liquidity management and credit quality of investment instruments. The rules will apply to all MMFs, whether they are UCITS or AIFs.
  • 30 November 2018. Filing Annual accounts of Variable Capital Companies in CRO. The Companies (Accounting) Act 2017 obliges UCITS investment companies and AIF investment companies to file annual accounts for financial years commencing on or after 1 January 2017 with the CRO within eleven months of the relevant financial year end. By 30 November 2018 we will see the first such accounts being filed.

The above list does not cover ad hoc filings (such as regulatory reports) or filings of annual accounts (and related documents which include annual FDI Return) and semi-annual accounts or other similar returns which deadlines will vary to reflect the particular entity's year end.

Central Bank Christmas deadlines

The Central Bank of Ireland (Central Bank) issued details of its deadlines for receipt of applications: for approval of fund and sub-fund applications that have pre-Christmas or pre year-end approval deadlines, including self-managed/ internally managed investment company/ ICAV applications and risk management processes; and for approval of post authorisation amendments that have pre-Christmas or pre year-end approval or noting deadlines. Details of the Central Bank deadlines are set out here.

The Central Bank also issued its deadline for receipt of applications in relation to ICAV registration/ conversion/ migration applications which is 08 December

Central Bank markets update

The Central Bank published Issue 9 of its markets update which included:

Central Bank conference on exchange traded funds

Central Bank Director General, Derville Rowland delivered the opening address at the Central Bank's conference on Exchange Traded Funds: stability and growth.

MMIF regulatory reports

The Irish Funds Regulatory Reporting Working Group (RRWG) published an industry information note on MMIF regulatory reports following a recent meeting with the Central Bank. This meeting included a discussion on data and reporting. Please speak with your usual contact on the ALG Asset Management & Investment Funds team if you would like to see a copy of this paper.

Central Bank AML/CTF bulletin

The Central Bank issued an AML bulletin covering

  • guidance on suspicious transaction reporting
  • an update on some AML CTF developments.

Helpfully, the bulletin identified some key action points and expectations

  • Firms should review the entire FATF Mutual Evaluation Report (MER) of Ireland and where necessary update ML/TF risk assessments, policies and procedures as appropriate.
  • Firms should also review other FATF publications and monitor FATF's website.
  • The Central Bank expects firms to comply with the ESA joint guidelines on simplified and enhanced due diligence by 26 June 2018.
  • Payment Service Providers (PSPs) should consider ESA joint guidelines under the Fund Transfer Regulations (on information accompanying transfers of funds) when establishing and implementing procedures to detect and manage transfers of funds that lack required information on the payer and/or the payee to ensure that these procedures are effective. The guidelines also specify what PSPs should do to manage ML/TF risk, where the required information on the payer and/or the payee is missing or incomplete.
  • Firms should consider the European Commission Supranational Risk Assessment and the National Risk Assessment (published in October 2016) and should review and update group and firm level ML/TF risk assessments as appropriate.

Suspicious transaction reporting

  • Reports in relation to ML/TF suspicions must be made to the Financial Intelligence Unit (FIU), which is part of the Garda National Economic Crime Bureau, electronically via goAML and also to the Office of the Revenue Commissioners.
  • The Central Bank found that some sectors continue to place an over reliance on manual transaction monitoring processes.
  • When assessing potential suspicious transactions, it is important to consider attempted transactions, as well as completed transactions. In addition, there is no minimum monetary threshold for reporting and no amount should be considered too low for suspicion. This is particularly important when considering potential terrorist financing transactions which often involve very small amounts of money. The bulletin sets out a (non-exhaustive) list of examples of what might raise suspicions:
  • A designated person must retain sufficient information in order to record the reported suspicion, and support its determination of whether to discount the suspicion, or to proceed and file the STR with the authorities.

GoAML

  • The Central Bank expects that all designated persons are registered with goAML.

Revenue Commissioners

  • The Office of the Revenue Commissioners will accept a printed copy of the STR submitted on goAML and this can be sent by post.

Separate reporting of other offences

  • Where a suspected predicate offence or offences (e.g. fraud, theft, etc.) have been identified by the designated person, a separate report (in addition to the STR made under Section 42 of the CJA 2010) should be made to An Garda Síochána to ensure that this can be investigated separately if necessary. The STR should clearly state that a separate report has been forwarded to An Garda Síochána.

Central Bank findings and expectations

The Central Bank set out its findings (from inspections) of instances of inadequate practices around the identification, escalation, reporting, and record keeping in relation to STRs. In addition, the Central Bank set out the following expectations in relation to the identification, escalation, reporting, and record keeping for suspicious transactions.

  • Procedures fully capture all the suspicious transaction reporting requirements prescribed by the CJA 2010, are readily available to all staff, and operational practices are reflective of these procedures.
  • Transaction monitoring systems are reviewed regularly to ensure the systems are operating appropriately and effectively.
  • Sufficient records are maintained in relation to suspicious transactions, including what gave rise to the suspicion, what additional monitoring/investigation was undertaken, whether the suspicion was reported or not, and the rationale for reporting/not reporting.
  • AML/CFT training provided to staff includes details on the designated person's internal reporting procedure, as well as details on the reporting of suspicions to the authorities.
  • STRs contain all required information and there are no delays in reporting to the authorities.

Central Bank of Ireland

Ten new platforms and 55 new funds (including sub-funds) were authorised by the Central Bank in October 2017.