Financial Services Regulatory Update – February 2022 Round Up


General Updates

EU Restrictive Measures – Russian Invasion of Ukraine

In response to the Russian invasion of Ukraine, the EU announced a wide range of restrictive measures targeting Russia.

These restrictions build upon the existing sanctions legislative framework and expand its scope substantially. Measures include additions to the EU ‘asset freeze’ list, sectoral prohibitions (for example, in respect of aviation, energy and transport, defence and security and the capital markets/finance sector) and the exclusion of certain Russian banks from the SWIFT messaging system.

Our briefing here provides further detail on the key developments.

Individual Accountability Framework - SEAR

On 21 February 2022, Gerry Cross (Director of Financial Regulation – Policy Risk, of the Central Bank of Ireland (the “CBI”)) gave a speech entitled “The spirit in the machine: considering evolving financial regulation” (here). While the speech touched on a number of issues, including effective regulation, achieving a positive regulatory dynamic and consumer protection, of particular interest were Mr. Cross’ comments in respect of the individual accountability framework (“IAF”):

  • Timing

    Mr Cross stated that subject to the legislative process, it can be expected that the Central Bank (Individual Accountability Framework) Bill will be enacted into law during the course of the months ahead. Mr Cross confirmed that the CBI has been working in parallel on the regulations and guidance which will complete the new framework and stated it is the CBI’s intention to publish the proposed CBI regulations for consultation very shortly after the finalisation of the legislation.
  • Substance and Form

    Mr Cross highlighted that during the consultation exercise undertaken by the Department of Finance, the interface between substance and form gave rise to a number of questions. The example given by Mr Cross is what would happen when one Senior Executive (PCF role-holder) under the regime reports to another. Mr. Cross also highlights questions in respect of the risk of ‘juniorisation’ described as ‘where a formal title is applied to a less senior executive while the more senior person seeks to stay out of the regulatory picture’. Mr Cross confirms that the new framework is focused on the substance of those roles and not their titles. In the case of ‘juniorisation’, Mr Cross states that the more senior executive will be identified as the person actually carrying out the role and therefore deemed to be the role-holder and to hold the relevant responsibilities under the framework.

    Mr Cross also confirms that the fact that one PCF holder reports to another would not absolve the first PCF holder from their role-specific responsibilities and related individual accountability.
  • Outsourcing

    Mr Cross also confirmed that the CBI expects that where outsourcing arrangements are in place then there will be a Senior Executive Function in the regulated firm with responsibility for outsourcing arrangements. Mr Cross said that this responsibility will need to be reflected in the relevant statement of responsibilities and responsibility maps.


On 4 February 2022, the UK Parliament’s European Affairs Committee announced a new UK-EU financial services inquiry (here).

The purpose of the inquiry is to address key issues, including:

  • the impact so far on the UK financial services sector of the UK’s departure from the EU Single Market;
  • the impact of the absence of a functioning framework for UK-EU regulatory cooperation;
  • the future of cross-border UK-EU financial services trade in the absence of equivalence; and
  • the impact of regulatory divergence and agreements with third countries on UK-EU financial services trade.

The Committee is expected to report by May 2022.

Ireland for Finance - Action Plan 2022

On 3 February 2022, the Department of Finance published its ‘Ireland for Finance - The strategy for the development of Ireland’s international financial services sector to 2025 - Action Plan 2022’ here. This is the fourth action plan under the Ireland for Finance strategy. The strategy is a whole-of-government commitment in partnership with the private sector to further develop the international financial services sector in Ireland.

Priority themes include sustainable finance, fintech and digital finance, diversity and talent, regionalisation and promotion, and operating environment.

AML- Accounts and Safe-Deposit Boxes Regulations

On 8 February 2022, the European Union (Anti-Money Laundering: Central Mechanism for Information on Safe-Deposit Boxes and Bank and Payment Accounts) Regulations 2022 were published here.

These Regulations transpose Art32a of Directive (EU) 2015/849, as amended (“MLD4”) which requires Member States to put in place centralised automated mechanisms which allow the identification of any natural or legal persons holding or controlling payment accounts and bank accounts and safe-deposit boxes held by a credit institution within their territory.

The Regulations require the CBI to establish and maintain a central database which will contain information on accounts or safe deposit boxes held by credit institutions. The CBI will also be required to establish a central mechanism enabling credit institutions to provide the required information to the CBI. Credit institutions are, in turn, required under the Regulations to submit the required information to the CBI through the central mechanism.

Benchmark Regulation – Delegated Regulations

On 16 February 2022, the European Commission adopted two Delegated Regulations supplementing Regulation (EU) No 2016/1011 (the “Benchmark Regulation”) here.

Since 1 January 2022, ESMA has been the competent authority for administrators of a critical benchmark as referred to in points (a) and (c) of Article 20(1) of the Benchmark Regulation and third country administrators of benchmarks as referred to in Article 32 of the Benchmark Regulation.

Article 48i(10) of the Benchmark Regulation empowers the European Commission to adopt a delegated act to further specify the rules of procedure for the exercise of the power to impose fines or periodic penalty payments, including provisions on the rights of the defence, the collection of fines or periodic penalty payments, and the limitation periods for the imposition and enforcement of fines and periodic penalty payments.

On this basis, the Commission has adopted the following Delegated Regulations:

  • Delegated Regulation (C(2022) 850 final) specifies rules of procedure ESMA must follow in applying measures (such as fines or periodic penalty payments) on benchmark administrators under its supervision; and
  • Delegated Regulation (C(2022) 851 final) specifies details on fees payable to ESMA by administrators of critical benchmarks and of third country benchmarks in respect of ESMA supervision. Details include the type of fees, the matters for which fees are due, the amount of the fees and the manner in which they are to be paid.

The European Parliament and the Council will now scrutinise the Delegated Regulations. If adopted, they shall enter into force and apply on the third day after their publication in the Official Journal of the European Union.

STS - Notification Register

On 2 February 2022, the ESMA launched a new register for the notification of Simple, Transparent and Standardised (“STS”) securitisations which will replace the current STS list. Instructions on how to access the new register are available here.


Corporate Sustainability Due Diligence Directive

On 23 February 2022 the European Commission published its proposal for a Directive on Corporate Sustainability Due Diligence here.

The proposal aims to foster sustainable and responsible corporate behaviour throughout global value chains by requiring in-scope companies to identify and, where necessary, prevent, end or mitigate adverse impacts of their activities on human rights, such as child labour and exploitation of workers, and on the environment, for example pollution and biodiversity loss, and introduces directors' duties to set up and oversee the implementation of due diligence and to integrate it into the corporate strategy.

The proposal will be presented to the European Parliament and the Council for approval. Once adopted, Member States will have two years to transpose the Directive into national law.

Further detail is contained in our briefing here.

Taxonomy -Delegated Act on Gas and Nuclear Activities

On 2 February 2022, the European Commission approved a Complementary Climate Delegated Act setting out conditions under which nuclear and natural gas energy activities qualify as economic activities under the EU Taxonomy Regulation (Regulation (EU) 2020/852) here.

This Act also amends Commission Delegated Regulation (EU) 2021/2178 supplementing Article 8 of the Taxonomy Regulation to require large listed non-financial and financial companies to disclose the proportion of their activities linked to natural gas and nuclear energy.

This Act will be formally adopted by the European Commission when all the language versions are available. It shall then be scrutinised by the European Parliament and the Council. If the European Parliament and Council do not exercise their veto within the scrutiny period, the Complementary Climate Delegated Act will enter into force and apply from 1 January 2023.  

Report on Social Taxonomy

On 28 February 2022, the Platform on Sustainable Finance (“PSF”) published its ‘Final Report on Social Taxonomy’ here which has now been submitted to the European Commission.

In this document, the PSF proposes a structure for a social taxonomy within the present EU legislative environment on sustainable finance and sustainable governance.

Amongst other suggestions, the PSF proposes a structure of a social taxonomy consisting of three objectives, namely:

  • decent work (including for value-chain workers);
  • adequate living standards and wellbeing for end-users; and
  • inclusive and sustainable communities and societies.

The European Commission will now consider this report.


Extension of UK CCP Equivalence  

On 9 February 2022, Commission Implementing Decision (EU) 2022/174 of 8 February 2022 determining, for a limited period of time, that the regulatory framework applicable to central counterparties in the United Kingdom of Great Britain and Northern Ireland is equivalent, in accordance with Regulation (EU) No 648/2012 of the European Parliament and of the Council was published in the OJ here.

This Implementing Decision provides for a temporary extension of the equivalence of the regulatory framework for UK-based central counterparties until 30 June 2025.

On 8 February 2022, the Commission also issued a targeted consultation in respect of the European clearing regime here. This consultation is open until 22 March 2022.

RTS – Benchmark Transition

On 8 February 2022, the European Commission adopted a Delegated Regulation amending the regulatory technical standards laid down in Delegated Regulation (EU) 2015/2205 as regards the transition to new benchmarks referenced in certain OTC derivative contracts here. This Delegated Regulation modifies Article 3 of Commission Delegated Regulation (EU) 2015/2205 regarding interest rate derivative classes to reflect the transition to new benchmarks.

The Council and the European Parliament will now scrutinise the Delegated Regulation. If neither object, they will enter into force the day after their publication in the Official Journal of the European Union

Capital Requirements/Credit Institutions

CBI – Review of Phone Line Support

On 18 February 2022, the CBI issued a press release summarising its review of call waiting times on the customer support phone lines in the main retail banks here.

The CBI states that the review highlighted areas for improvement. The CBI also states that it has engaged directly with the retail banks to implement robust action plans to ensure the level of customer service provided on support phone lines is sufficient. The CBI notes that banks have provided details of measures they are taking to address the issues highlighted by our review, including increased capacity and staffing levels. The CBI expects firms to report to it on the implementation of these measures during 2022.

European General Court - Withdrawal of Bank Authorisation

On 2 February 2022, the European General Court (“EGC”) dismissed an action to annul an ECB decision to withdraw the authorisation of Pilatus Bank plc as a credit institution here.

The EGC held that the ECB has exclusive competence to withdraw authorisations of all credit institutions in the Single Supervisory Mechanism (“SSM”) under the SSM Regulation (Regulation (EU) 1024/2013). In so doing, the ECB must apply all relevant EU law, including the CRDIV (Directive (EU) 2013/36/EU). Upon finding that an institution no longer fulfils the conditions under which authorisation was granted, the ECB may withdraw that authorisation.

Phasing out of COVID-19 capital and leverage relief

On 10 February 2022, the ECB announced (here) that certain provisions introduced to assist banks in light of the COVID-19 pandemic will be phased out. In particular, banks will once again be expected to operate above Pillar 2 Guidance from 1 January 2023 and to reinclude central bank exposures in leverage ratio from 1 April 2022.

RTS – Capital Requirements

On 2 February 2022, the EBA published a final report on draft RTS on emerging markets and advanced economies under Article 325ap(3) of the Capital Requirements Regulation (Regulation (EU) 575/2013) (“CRR”) here.

The EBA is required to specify the ‘advanced’ economies that should attract lower risk weights for equity risk under the alternative standardised approach for market risk. The final RTS diverge from the consultation version by expanding the scope from EU member states to all countries belonging to the European Economic Area. The next step is for the European Commission to consider the draft RTS.

Liquidity coverage requirements – Covered Bond Framework

On 10 February 2022, the European Commission adopted a Delegated Regulation amending the Commission Delegated Regulation EU 2015/61 (the “LCR Delegated Regulation”) with regard to liquidity coverage requirement (“LCR”) for credit institutions here.

The amendments made are intended to amend the LCR to adapt same for the covered bond framework.

The principle amendment is a new paragraph 2a in Article 7 of the LCR Regulation which is intended to allow credit institutions to treat liquid assets held as part of the cover pool liquidity buffer as unencumbered up to the amount of net liquidity outflows from the associated covered bond programme. This amendment is intended to address double-counting issues.

There are also further amendments to allow some prudentially sound national models of covered bonds issuance to comply with LCR requirements and to align the LCR Delegated Regulation with Article 129 of the CRR.

The Council and European Parliament will now scrutinise the Delegated Regulation and, if no objections arise, it shall be published in the OJ and apply from 8 July 2022.

RTS – Establishment Notifications under CRD IV

On 14 February 2022, Commission Delegated Regulation (EU) 2022/192 amending RTS laid down in Commission Delegated Regulation (EU) No 1151/2014 supplementing Directive 2013/36/EU (“CRD IV”) on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, as regards the information to be notified when exercising the right of establishment and the freedom to provide services, was published in the OJ here.

The amendments made are intended to provide further detail on the information to be notified by credit institutions to a competent authority when exercising the right of establishment and the freedom to provide services.

RTS and ITS - Passporting Notifications under CRD IV

On 14 February 2022, two Delegated Regulations relating to passporting notifications under CRD IV were published in the OJ.

  • Commission Delegated Regulation (EU) 2022/192 (here) amends RTS set out in Commission Delegated Regulation (EU) 1151/2014 on notifiable information when exercising the right of establishment and the freedom to provide services and
  • Commission Implementing Regulation (EU) 2022/193 (here) amends implementing technical standards (“ITS”) set out in Implementing Regulation (EU) 926/2014 in relation to forms, templates and procedures involved in notifications set out in the RTS above.

The amendments made are intended to improve the quality and consistency of information provided by credit institutions concerning passporting.

Insurance / Insurance Distribution

Insurance (Miscellaneous Provisions) Bill 2021

On 8 February 2022, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach published its report on pre-legislative scrutiny of the General Scheme of the Insurance (Miscellaneous Provisions) Bill 2021 here.

The key recommendations in the report are:

  • that the Minister further considers the possibility of including measures that will have a more immediate effect, upon commencement, in deterring insurers from deducting State supports in the payment of claims than the possibly lengthy lead time it will take for the data preparation, collection and reporting to be put in place; and
  • that the Oireachtas would receive details of the outcome of the CBI’s report to the Minister for Finance on price walking on or before the second anniversary of the commencement of the Act.

EC request for feedback in respect of Insurance Ireland data sharing platform

On 25 February 2022, the European Commission invited feedback from stakeholders of commitments offered by Insurance Ireland, to address competition concerns regarding access to its Insurance Link information exchange system, in the Official Journal of the European Union here.

The European Commission launched a formal investigation into Insurance Ireland’s conduct on 14 May 2019, and issued a statement of objections in June 2021 outlining the Commission’s preliminary view that Insurance Ireland restricted competition in the Irish motor vehicle insurance market in breach of antitrust rules. In response Insurance Ireland offered a number of commitments to remain in force for 10 years, including allowing access to the Insurance Link information exchange system independent from any membership to Insurance Ireland.

The European Commission invites all interested parties to submit their views within one month from the publication of a summary of the commitments in the OJ.

Implementing Regulation - Technical Information for calculating basic own funds

On 11 February 2022, Commission Implementing Regulation (EU) 2022/186 laying down technical information for the calculation by insurers and reinsurers of technical provisions and basic own funds for reporting under the Solvency II Directive was published in the OJ here.

This Implementing Regulation applies to required reporting with reference dates from 31 December 2021 until 30 March 2022, of technical information on relevant risk-free interest rate term structures, fundamental spreads for calculation of the matching adjustment and volatility adjustments.

The Implementing Regulation applied from 31 December 2021

Investment Firms / MiFID

SI – Investment Firm Reporting Requirements

On 4 February 2022, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) (Amendment) Regulations 2022 (SI 45 of 2022) were published in Iris Oifigiúil here.

These CBI Regulations come into operation on 21 February 2022 and amend CBI reporting requirements (contained in Regulation 8 of The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2017) to take account of the different classifications which apply to MiFID investment firms under the Investment Firms Regulation  (Regulation (EU) 2019/2033).

ESMA - CSA on MiFID II costs and charges disclosures

On 8 February 2022, ESMA published a press release announcing the launch of a common supervisory action (“CSA”) with national competent authorities (“NCAs”) on the application of the costs and charges disclosure rules by firms across the EU under the MiFID II Directive here.

The CSA will focus on information provided to retail clients and will involve NCAs reviewing how firms ensure that these disclosures:

  • are provided to clients in a timely manner;
  • are fair, clear and not misleading;
  • are based on accurate data reflecting all explicit and implicit costs and charges; and
  • adequately disclose inducements.

The CSA will be conducted during 2022.

RTS – Benchmark Transition

On 8 February 2022, the European Commission adopted a Delegated Regulation amending the RTS laid down in Delegated Regulation (EU) 2017/2417 as regards the transition to new benchmarks referenced in certain OTC derivative contracts here.

Regulation (EU) No 600/2014 on Markets in Financial Instruments (“MiFIR”) contains an obligation in Article 28 to conclude transactions in derivatives that are subject to the derivatives trading obligation (“DTO”) on a regulated market, a multilateral trading facility, an organised trading facility or an equivalent third country trading venue. The amendments to the RTS reflect the decision by ESMA that the DTO should no longer apply with regard to interest rate swaps denominated in USD and GBP based on the LIBOR benchmark.

The Council and the European Parliament will now scrutinise the Delegated Regulation. If neither object, they will enter into force the day after their publication in the Official Journal of the European Union.

Data Reporting Service Providers

On 16 February 2022, the European Commission adopted a Delegated Regulation supplementing MiFIR by specifying the procedure ESMA must follow to impose fines or periodic penalty payments on data reporting service providers under its supervision here.

Following scrutiny by the Council and the European Parliament, if approved it shall enter into force on the third day after its publication in the OJ.

RTS - K-factor clear margin given calculation under IFR

On 22 February 2022, Commission Delegated Regulation (EU) 2022/244 setting out RTS specifying the amount of total margin for the calculation of the K-factor ‘clear margin given’ (K-CMG) under the Investment Firms Regulation was published in the OJ here.

This Delegated Regulation shall enter into force on 14 March 2022.

Investment Funds

CBI – Securities Markets Risk Outlook Report 2022

On 8 February 2022, the CBI published its Securities Markets Risk Outlook Report 2022 here.

The report highlights key areas that the CBI expects firms to address. These key areas include cyber security, sustainable finance, governance, conflicts of interest, misconduct risk, data quality and market dynamics.

The CBI highlights that a number of work items which relate specifically to this report are planned. These work items include completing the CSA on valuations in the funds sector and undertaking a number of full conduct risk assessments on firms. The CBI states that assessment and investigation of suspected market abuse will also be a priority.

Cross-Border Distribution of Funds

On 4 February 2022, ESMA published summaries and a list of links to Member States’ competent authorities’ websites. These summaries and links provide complete and up-to-date information on the applicable national laws, regulations and administrative provisions governing marketing requirements for AIFs and UCITS here.


On 25 February 2022, EFAMA published its position paper ‘Tweaking the AIFMD/UCITS Framework’ here.

The position paper considers the European Commission’s AIFMD review and sets out EFAMA’s position on aspects of the review, including:

  • liquidity management tools – EFAMA states it is critical that the management of liquidity risk remains the responsibility of the manager;
  • loan origination funds –  EFAMA cautions that the proposed rules contradict established market practice and as such would have the effect of reversing the growth of this industry and potentially making these products less accessible and attractive to investors. EFAMA contends that the current framework is sufficient to regulate originated loans as an asset class; and
  • delegation – EFAMA is of the opinion that the delegation proposals should specify that delegation rules should not apply to tasks for which the management company does not bear direct responsibility.

Selected Consultations, Discussion Papers, Speeches and Reports Published

BCBS - speech highlighting concerns with EU implementation of final Basel III reforms (here)

CCBM - information for counterparties (here)

EBA - annual assessment of banks’ internal approaches for the calculation of capital requirements (here)

EBA - final guidelines on the limited network exclusion under the Payment Services Directive (here)

EBA - final report and guidelines on limited network exclusion under PSD2 (here)

EBA - report on implementation of ESRB recommendation on identifying legal entities (here)

EBA - responses of AML and CTF competent authorities to 2020 Luanda Leaks (here)

EBA – update to questionnaires on regulatory equivalence of third countries with banking prudential requirements (here)

ECA – recommendation of action to ensure investment fund framework objectives are achieved (here)

ECB - brochure on the correspondent central banking model (CCBM) (here)

ECB - combined monetary policy decisions and statement (here)

ECB - opinions on proposed Regulations and Directive pursuant to the AML and CTF action plan (here) and (here)

ECB - opinion on a proposed regulation to extend traceability requirements to transfers of crypto-assets (here)

ECON - draft opinion on proposed CCD II (here)

ECON - draft report on proposed Regulation on information accompanying transfers of funds and certain cryptoassets (here)

ECON - report proposing amendments to the Commission’s proposed Regulation on MREL and TLAC amendments to CRR (here)

EIOPA - supervisory convergence plan for 2022 (here)

ESAs - response to European Commission call for advice on digital finance and related issues (here)

ESMA – alternative investment funds exposures to commercial real estate (here)

ESMA - call for evidence on CCP climate risk stress testing (here)

ESMA – call for evidence on market characteristics for ESG rating providers (here)

ESMA – call for evidence on market structure of ESG rating providers (here)

ESMA - disclosures of ESG factors in credit ratings diverge significantly despite its guidelines (here)

ESMA – guideline update on stress tests under MMF Regulation (here)

ESMA - opinion on the review of the Money Market Fund Regulation (here)

ESMA - spotlight on markets newsletter covering December 2021 and January 2022 (here)

ESMA - sustainable finance roadmap 2022-24 (here)

ESMA -  ESMA supervisory briefing on use of tied agents under MiFID II (here)

ESMA - EU alternative investment Funds - ESMA annual statistical report 2022 (here)

European Commission - call for evidence on EMIR targeted review (here)

European Commission – call for feedback on Insurance Ireland’s commitments to improve access to its Insurance Link information exchange system (here).

European Commission – consultation enhancing retail investors' suitability and appropriateness assessments (here)

European Commission – draft notice on the interpretation of the Disclosures Delegated Act under Article 8 of EU Taxonomy Regulation (here)

EU Platform on Sustainable Finance - report on a social taxonomy (here)

FCA - statement on future work on LIBOR transition (here)

FSB – updated assessment of financial stability risks from cryptoassets (here)

IMCO - report on proposed Consumer Credit Directive II (here)

ISDA - a new definitional booklet and related set of provisions designed to allow firms to document derivatives and securities financing transactions (repos and loans of securities) under a single ISDA Master Agreement (see here and here)

Law Society of England and Wales - blockchain legal and regulatory guidance report (here)

Spanish Data Protection Agency - significant fine on Caixabank for consent clause which falls short of GDPR (here)

UK Industry Working Group - interim report on the electronic execution of documents (here)

UNEP FI and EBF - approaches to applying EU taxonomy to bank lending (here)

You may also be interested in:

McCann FitzGerald LLP regularly publishes briefings on topics relevant to financial services briefings, among others. You may be interested in the following briefings:

  • Corporate Sustainability Due Diligence Directive: What Irish Companies Need to Know (here)
  • Taking a Stand – Who Can Challenge a Procurement Process? (here)
  • Legislation of 2021 and Anticipated Developments of 2022: Finance and Financial Services (here)
  • Pension Schemes’ Clearing Exemption: An End in Sight (here)
  • Financial Services Regulatory Update – January 2022 Round Up (here)
  • Discovery: Relevance and Necessity of Documents Immaterial Where No Ambiguity in Discovery Order (here)
  • Irish Merger Control 2021 – Your 3-Minute Update (here)

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.