knowledge | 10 December 2019 |

Financial Services Regulatory Update – November 2019 Round Up


Money Laundering and Terrorist Financing

The European Union (Money Laundering and Terrorist Financing) Regulations 2019 (the “2019 Regulations”) entered into force on 18 November 2019 and amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (available here). Among other things, they require each “designated person” to have in place appropriate procedures for their employees, or persons in a comparable position, to report a contravention of the 2010 Act internally through a specific, independent and anonymous channel, proportionate to the nature and size of the designated person concerned. The new section transposes Article 61(3) of the Fourth Money Laundering Directive.

The 2019 Regulations also contain a number of other amendments relating to:

  • the fitness and probity of persons performing a management function in or being a beneficial owner of an auditor, external accountant, tax advisor, independent legal professional or property service provider; and
  • cooperation between Member State competent authorities and supervision by competent authorities.

See our briefing here

Financial Action Task Force (“FATF”) follow-up report on Ireland’s progress in strengthening measures to tackle money laundering and terrorist financing

On 12 November 2019, the FATF published a follow-up report on Ireland’s progress in strengthening measures to tackle money laundering and terrorist financing (available here).

Ireland will move from enhanced to regular follow-up and will continue to report back to the FATF on progress to strengthen its implementation of anti-money laundering (“AML”) and counter-terrorist financing (“CTF”) measures.

ICT and Security Risk Management

The EBA published final guidelines on information and communication technology (“ICT”) and security risk management (available here). The Guidelines, which are addressed to credit institutions, investment firms and payment service providers set out how financial institutions should manage internal and external ICT and security risks that they are exposed to and aim to provide a better understanding of supervisory expectations for the management of ICT and security risks.

The Guidelines will enter into force on 30 June 2020, at which point the EBA's December 2017 Guidelines on security measures for operational and security risks under PSD2 (which have been integrated into the Guidelines) will be repealed.

EU consumer protection rules

On 8 November 2019, the Council of the EU adopted a Directive amending Council Directive 93/13/EEC (unfair contract terms), Directive 98/6/EC (price indication), Directive 2005/29/EC (unfair commercial practices) and Directive 2011/83/EU (consumer rights) as regards better enforcement and modernisation of EU consumer protection rules (available here). The purpose of the Directive is to guarantee higher standards of protection for EU consumers when they buy products or services online. It also provides for more robust measures against unfair or misleading trade practices across the EU. Member States will have to adopt and publish the measures to comply with this Directive within 24 months of its publication in the EU’s Official Journal and these measures will start to apply 6 months later.

PRIIPs Extension

Commission Delegated Regulation (EU) 2019/1866 amending Delegated Regulation (EU) 2017/653 to align the transitional arrangement for PRIIP manufacturers offering units of funds referred to in Article 32 of Regulation (EU) No 1286/2014 as underlying investment options with the prolonged exemption period under that Article (available here).

The Delegated Regulation, which entered into force on 28 November 2019, amends Article 18 of the PRIIPs Delegated Regulation, to extend the transitional arrangements by two years, to 31 December 2021.

Differential pricing in motor and home insurance industries

On 21 November 2019, the CBI published a Dear CEO letter on its review of differential pricing in the motor and home insurance industries, which will begin in January 2020 (available here). The review will be conducted in three phases and will examine the extent to which differential pricing is consistent with the Consumer Protection Code and will seek to establish the impact of differential pricing on consumers while at the same time identifying the drivers of consumer behaviours including how consumers engage with the insurance industry.

CBI introduces new insurance transparency rules

The CBI has introduced new rules requiring insurers to provide their customers with more information when renewing their motor insurance policies (available here). The new rules are part of amendments to the Non-Life Insurance (Provision of Information) (Renewal of Policy of Insurance) Regulations 2007.

Homogeneity RTS for STS Securitisations enter into force and STS Notification RTS published in final form

Delegated Regulation (EU) 2019/1851 supplementing the Securitisation Regulation with regard to regulatory technical standards (“RTS”) on the homogeneity of the underlying exposures in securitisation establishes a set of conditions that the underlying exposures of a securitisation must satisfy in order to be deemed homogenous (available here). It entered into force on 26 November 2019.

On 12 November 2019, the European Commission published a Delegated Regulation supplementing the Securitisation Regulation with regard to RTS specifying the information to be provided in accordance with the STS notification requirements, together with annexes (available here). The Delegated Regulation is not expected to enter into force until February 2020.

Third Country CCPs under EMIR 2.2

On 11 November 2019, ESMA published three sets of technical advice regarding third-country central counterparties (“TC-CCPs”) under EMIR 2.2 (available here). ESMA’s advice details:

  • how to specify the criteria to determine whether a TC-CCP is systemically important for the EU or a Member State’s financial stability (tiering);
  • how to assess comparable compliance; and
  • the fees to be charged to TC-CCPs.

CBI issues new lending rules for credit unions

The CBI has issued new lending measures for credit unions which will come into effect in January 2020 (available here).

Changes introduced under the new lending measures include the removal of the existing lending maturity limits which cap the percentage of credit union lending which may be outstanding for periods of greater than 5 and 10 years. Maturity limits will be replaced by new concentration limits, on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets.

CBI guide to sanctions under the Administrative Sanctions Procedure (“ASP”)

The guidance provides greater clarity on the CBI’s general approach to sanctioning of firms and individuals along with guidance on the application of a variety of factors relevant to sanctioning under the ASP, including cooperation, self-reporting and remediation (available here).

Consultations/Discussion Papers Published

Basel Committee on Banking Supervision (“BCBS”) – Consultation on the introduction of guidelines on interaction and cooperation between prudential and AML/CTF supervision (available here). The closing date is 6 February 2020

BCBS - Consultation on revisions to market risk disclosure requirements (available here). The closing date is 14 February 2020

BCBS – Consultation on voluntary disclosure of sovereign exposures (available here). The closing date is 14 February 2020

BCBS – Consultation on changes to credit valuation adjustment risk framework (available here). The closing date is 25 February 2020

EBA – Consultation on draft amended RTS and draft amended implementing technical standards (“ITS”) on Passport Notifications under Articles 35, 36 and 39 of Directive 2013/36/EU (available here). The closing date is 13 February 2020

EBA - Consultation on draft ITS on disclosure reporting of the minimum requirement for own funds and eligible liabilities and the total loss absorbency requirement (available here). The closing date is 22 February 2020

EBA – Consultation on draft ITS on specific supervisory reporting requirements for market risk (available here). The closing date is 7 January 2020

ESMA – Consultation on commodity derivatives position limits, position management controls and position reports under MiFID II (available here). The closing date is 8 January 2020

International Association of Insurance Supervisors - Consultation on a draft application paper on liquidity risk management (available here). The closing date is 20 January 2020


This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.

Key contacts