Insights

The Individual Accountability Framework (IAF) impacts all Regulated Financial Services Providers (RFSPs) and individuals who perform controlled functions (CFs) on their behalf. Certain RFSPs (including most credit institutions, insurance firms and MiFID firms) are additionally in scope for the Senior Executive Accountability Regime (SEAR).

On 30 January, the Central Bank published Guidance for (Re)insurance Undertakings on Intragroup Transactions and Exposures following a consultation that ended in September 2022.

In response to the fast growth of the payment services market, the European Commission issued a Revised Payments Legislative Package. This seeks to ensure the EU’s financial sector is fit for purpose and capable of adapting to the ongoing digital transformation, and the risks and opportunities it presents – in particular for consumers.

Counterparty credit risk was identified as a supervisory priority by the ECB for 2022 - 2024, as banks had been increasingly offering capital market services to riskier, leveraged and less transparent counterparties, in particular with non-bank financial institutions (NBFIs), at a time when the interest rate environment was low.

DORA will have a significant effect on enhancing the operational resilience of digital systems. By soliciting public input through this consultation process, the European Supervisory Authorities aim to ensure that the resulting technical standards align with industry best practices promote digital resilience and facilitate a robust and secure digital environment across the EU.

Complaints and Remediation in Financial Services

Money laundering is on the rise globally. Between 2016 and 2021, the yearly number of cases brought to the European Union Agency for Criminal Justice Cooperation doubled, bringing the total number of registered cases for that period to 3,000. In Ireland alone, the number of recorded money laundering crimes increased significantly from 86 in 2018 to 701 in 2021.

Creating and implementing watertight Know Your Customer (KYC) procedures can be problematic for many organisations since the process remains a people-driven, manual operation.

European Banking Authority Updates on the Management of Interest Rate Risk and Credit Spread Risk in the Banking Book.

As a result of recent amendments to the Criminal Justice (Money Laundering and Terrorism Financing) Act 2010 to 2021, Virtual Asset Service Providers (VASPs) are now “designated persons” and are required to comply with the relevant Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) obligations.

Final guidelines on common procedures and methodologies for the supervisory review and evaluation process for investment firms, along with final draft Regulatory Technical Standards on Pillar 2 add-ons for investment firms are published.

The Central Bank of Ireland (‘CBI’) has recently issued its latest Anti-Money Laundering Bulletin, focussing on the Virtual Asset Service Provider (‘VASP’) sector. In this bulletin, the CBI has provided its observations on a number of significant and widespread deficiencies across authorisation applications received from VASPs where roughly 90% of all applications are not meeting the required standard.