The Irish Regulations that will transpose MiFID II into Irish law have been published this week as the European Union (Markets in Financial Instruments) Regulations 2017 (SI 375/2017)
As expected, a ‘copy-out’ approach has been taken in respect of the provisions of both MiFID II, and the Commission Delegated Directive dealing with the safeguarding of client financial instruments and funds, product governance requirements and inducements.
Changes to the Investment Intermediaries Act 1995 are contained in Regulation 142 and, regarding the changes that will be needed to the Irish Client Asset Regulations, the Central Bank has already published a consultation paper. The proposed changes to the Consumer Protection Code to take account of the Minister for Finance’s decision to exercise the RTO/advice optional exemption have not yet been published – we assume that there will be a consultation process in this regard.
As mentioned in our recent MiFID II: Safe Harbour Update, the Department of Finance had confirmed in its recent Feedback Statement that the existing ‘safe harbour’ would be retained, albeit with certain limitations on its scope, including that it will only be available where the non-EEA firm in question is providing investment services into Ireland on a cross-border basis to per se professional clients and eligible counterparties.
However, the Irish Regulations published this week provide that the ‘safe harbour’ will be available in respect of the provision of services to eligible counterparties and all professional clients. We expect that this is an error and that the reference will be changed before 3 January 2018 to refer to eligible counterparties and per se professional clients.
The carve-outs from the ‘safe harbour’ in respect of firms whose home countries are on the FATF list of noncooperative jurisdictions, and firms whose home countries have not signed the IOSCO Multilateral Memorandum of Understanding, are less clearly worded than the Feedback Statement but do track the wording of Regulation 38 (which transposes Article 39 of MiFID II).
For further information on MiFID II, read our recent client briefings: