Finance
IRELAND
Against the backdrop of the Department of Finance’s Financial Consumer Protection Roadmap (read our insights here), the key developments to watch out for in 2024 (in addition to the Individual Accountability Framework) are:
Client Asset Requirements
The Central Bank of Ireland’s revised Client Asset Requirements apply to credit institutions from 1 January 2024. The related Guidance applies from the same date.
Consumer Protection Code (CPC)
We expect to see the Central Bank’s consultation paper on its planned retail conduct framework in Q1 2024. The new regulations will replace the CPC from late 2024, incorporate other existing standalone consumer protection codes and regulations such as the Code of Conduct on Mortgage Arrears, and contain the Business Standards which form part of the Individual Accountability Framework. For more information, read our insights here.
Innovation in Financial Services
The Central Bank’s consultation on enhancements to its Innovation Hub and a proposed Innovation Sandbox Programme closes on 8 February 2024. We expect the enhanced Hub and new Sandbox Programme to be launched during 2024. For more information, read our insights here.
Markets in Crypto-Assets Regulation (MiCA)
MiCA will apply from 30 December 2024 (save for the provisions relating to asset-referenced tokens and e-money tokens which will apply from 30 June 2024). The Department of Finance published the Feedback Statement on its ‘national discretions’ consultation on 14 December 2023, confirming that Ireland will reduce the grandfathering period under MiCA to 12 months or less (in line with ESMA's request to EU Member States). Read our insights here, here and here for more information.
National Payments Strategy
The Department of Finance’s Public Consultation on its National Payments Strategy closes for comments on 14 February 2024. We expect the Strategy to be published later in 2024, and for the planned ‘Access to Cash’ legislation to progress (arising from the November 2022 Retail Banking Review Report). For more information, read our insights here and here.
Non-Performing Loans / Transposition of the Credit Servicing Directive
Following the transposition of the EU Credit Servicing Directive into Irish law on 30 December 2023, and confirmation that two frameworks will run in parallel in Ireland, a key point for upcoming portfolio sales will be how mixed portfolios (non-performing, performing and re-performing loans) originated by EU banks will be managed.
In due course we expect to see details from the Central Bank on any specific authorisation process that they plan to use for future credit servicers who do not benefit from the grandfathering provision, and the formats to be used for notifications of sales and credit servicer appointments. The format for credit purchasers providing information to borrowers is likely to develop as in-scope transactions arise (and may vary depending on the type of loan – for instance, the LMA recently published a suggested form). Implementing Technical Standards have already been published, setting out the templates to be used by credit institutions for providing information on certain in-scope NPLs to credit purchasers. For more information, read our insights here.
“Our monthly Horizon Scanner: Finance tracks all upcoming legal and regulatory developments that are relevant to our finance clients.”
EUROPE
With European Parliament elections due to be held in June 2024 which will also impact the composition of the European Commission, we expect considerable momentum in the first half of 2024 towards progressing and/or finalising outstanding legislative packages.
AML
Following political agreement in December 2023 on the regulation establishing the new central EU AML/CFT supervisor (AMLA), and on the procedure for selecting AMLA’s location, the European Commission’s assessment of the nine applications to host AMLA (including Ireland’s application) will be published in January 2024 ahead of joint public hearings. Political agreement is expected early in Q1 2024 on the remaining two elements of the new AML/CFT package (the ‘single rulebook’ regulation, and the directive). For more information, read our insights here, here and here.
Bank Regulation
The revised Capital Requirements Directive and revised Capital Requirements Regulation (the new ‘EU Banking Package’) will be published in the Official Journal in early 2024. While most of this legislative package (focusing on Basel III, managing and supervising ESG risk, ‘fit and proper’ requirements and third country bank branches) will apply from 2025, certain provisions regarding third country bank branches will need to be transposed by Member States later in 2024. The European Banking Authority’s work on approximately 140 mandates under the EU Banking Package has already started, and will continue throughout 2024 (read the EBA Roadmap on the Banking Package for more information).
The planned changes to the amended ‘Daisy Chains’ Regulation should come into force in Q3 2024 (read our insights here). The remainder of the European Commission’s CMDI (bank crisis management and deposit insurance) proposal is expected to progress in Q1 / Q2 2024 (read our insights here).
Benchmarks Regulation
The Commission will hope that political agreement can be reached in H1 2024 on its proposal to amend the EU Benchmarks Regulation following confirmation from the EU Council of its negotiating mandate on 20 December 2023. However, the European Parliament has not yet confirmed its negotiating position.
The proposal involves limiting registration and authorisation requirements, and most of the Regulation’s substantive requirements, to critical benchmarks, significant benchmarks, EU climate transition benchmarks, EU Paris-aligned benchmarks and certain commodity benchmarks.
Central Securities Depositories Regulation (CSDR)
Changes to CSDR, dealing with settlement discipline and mandatory buy-in, passporting, colleges of supervisors and the provision of banking-type ancillary services were published in the Official Journal on 27 December 2023 and apply on a staggered basis from 17 January 2024. For more information on these changes, and other key points to watch from a CSDR/settlement perspective in 2024, read our insights here.
Derivatives
Political agreement is expected on EMIR 3.0 in early 2024. Read our latest insights here.
EU Securitisation Regulation
Notable developments expected in 2024 include:
- A H1 2024 consultation by ESMA on guidelines on Article 5 of the EU Securitisation Regulation (this will not address Article 5(1)(e) and the concerns regarding whether EU institutional investors need to obtain full Article 7 information for third country securitisations).
- A new Article 44 Report from the Joint Committee of the European Supervisory Authorities (ESMA will hold the pen on this) which will address the Article 5(1)(e) concerns following industry lobbying.
- ESMA’s Consultation on whether to amend the Securitisation Disclosure Templates which sets out four options (putting the review on hold, making limited amendments, a targeted review with a new dedicated private securitisation template, or a thorough review and fundamental simplification) closes for feedback on 15 March 2024.
- Publication in the Official Journal of regulations extending the scope of the existing regulatory technical standards on conditions for the assessment of the homogeneity of the underlying exposures to STS on-balance-sheet securitisations.
Insurance
Final approval of amendments to the Solvency II Directive and the Insurance Recovery and Resolution Directive is expected in H1 2024, following provisional political agreement on 14 December 2023. For more information, read our insights here.
MIFID II / MiFIR
Following political agreement in June 2023 between the EU Council and European Parliament on revisions to the MiFID II Directive and amendments to the Markets in Financial Instruments Regulation (MiFIR) (mainly dealing with the establishment of consolidated tapes and banning payments for order flow), we expect the agreed texts to be published in the Official Journal in late Q1 2024.
Payments
Payments will be a hot topic at EU-level in H1 2024, with progress expected on the legal framework for a digital euro, the new regulation on payment services and related directive (to replace PSD2) and the proposed ‘open finance’ framework. Following agreement in trilogue, the regulation on instant credit transfers in euro is likely to be published in the Official Journal in late Q1/early Q2 2024. For more information, read our insights here.
Retail Investment Package
Progress on the European Commission’s Retail Investment Package is a priority item at EU-level and its impact will be extensive, involving changes to existing rules set out in MiFID II, the Insurance Distribution Directive, Solvency II, the UCITS Directive, the AIFMD and the PRIIPs Regulation. Focus areas include a ban on inducements for execution-only sales, updated disclosure rules and steps to prevent misleading marketing. For more information, read our insights here and here.