On 06th November 2020, the Central Bank of Ireland revised its expectations as regards regulatory flexibility for securities markets, investment management, investment firms and fund service providers.

Recognising the challenges faced by firms and market participants as a result of the COVID-19 crisis, in April this year, the Central Bank communicated that it would allow a level of flexibility for regulated firms in certain specified areas.
The Central Bank has determined that certain measures previously communicated in respect of Securities Markets, Investment Management, Investment Firms and Fund Service Providers, and which have since expired on their terms, will not be extended. This includes those setting out expectations relating to:

  • Regulatory remittance dates for investment firms and fund service providers;
  • Pillar 3 disclosures; and
  • The submission of assurance reports in respect of investment firms and fund service providers’ arrangements for the safeguarding of client assets or investor money.

The Central Bank has also revised its expectations in respect of risk mitigation programme (RMP) implementation dates and clarified its expectations as regards the application of Pillar 2 Guidance by MiFID investment firms subject to CRR/CRD IV. The Central Bank continues to apply relevant announcements made by the European Supervisory Authorities (ESAs), again to the extent they have not expired on their terms, and to allow limited and time-bound flexibility in specified areas.

Pillar 3 Disclosures

MiFID investment firms subject to CRR/CRD IV should assess the need for additional Pillar 3 disclosures on prudential information that may be necessary in order to properly convey the risk profile of the firm in the context of the challenges brought about by the COVID-19 outbreak.

When doing this assessment, investment firms should take into account the extraordinary measures that competent authorities, central banks, national governments, and other EU bodies have announced to address the adverse systemic economic impact of the outbreak.

Pillar 2 Guidance

The Central Bank has applied Pillar 2 Guidance on a case by case basis to MiFID investment firms subject to CRR/CRD IV based on an identified supervisory requirement for the particular firms. The Central Bank has separately communicated that it will allow credit institutions to operate temporarily below the level of capital defined by Pillar 2 Guidance. However, having regard to the difference in business models, the Central Bank expects MiFID investment firms subject to CRR/CRD IV to hold capital in accordance with any Pillar 2 Guidance communicated to the particular firm by the Central Bank at this time.