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CBI Publishes Guidance Notes Relating to MiFID Firm Authorisations

On 1 May 2024, the Central Bank of Ireland ("Central Bank") issued three guidance documents for firms seeking authorisation as MiFID investment firms under the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. 375 of 2017) ("MiFID II Regulations").  These guidance notes aim to assist applicants in preparing and submitting their applications and to outline the Central Bank’s expectations and assessment criteria, comprising of:

Below we have provided a high-level overview of each guidance note published by the Central Bank.

1. Authorisation Guidance Note for MiFID Investment Firms - Preliminary Meeting Pre-Application Presentation

This guidance note relates to an applicant firm’s pre-application presentation to be submitted in advance of a preliminary meeting with the Central Bank.  The Guidance Note aims to assist applicant firms to evaluate their readiness to request a preliminary meeting with the Central Bank before commencing the authorisation process.  The preliminary meeting is an opportunity for applicant firms to have an early engagement with the Central Bank and to receive an overview of the application process, the authorisation expectations and the indicative timelines.  The main purpose of the meeting is for the applicant firm to provide the Central Bank with a high-level overview of its proposals, covering aspects such as:

  • the proposed business model;
  • rationale for seeking authorisation;
  • regulatory permissions & current regulatory status;
  • ownership structure;
  • business model information;
  • financial resilience;
  • governance arrangements; and
  • timelines / readiness.

The guidance note states poor quality presentations may lead to a conclusion that the applicant firm is not ready to proceed to the next stage of the authorisation process and may be advised to request another preliminary meeting at a later point.

The guidance note advises the applicant firm to submit the presentation, which should not exceed 30 slides, in slide-deck format at least 15 working days in advance of the meeting date and to ensure that the presentation is comprehensive, clear and concise.

2. Authorisation Guidance Note for MiFID Investment Firms - Key Facts Document

This guidance note outlines the purpose, content and expectations of the Key Facts Document (“KFD”), which is a high-level summary of the applicant firm's proposed business and operational model and associated risks.  The KFD is submitted by the applicant firm subsequent to the preliminary meeting with the Central Bank and prior the formal application filing.  The guidance note provides applicants with an indicative structure and content for the KFD, which should cover items such as:

  • the scope and rationale for authorisation;
  • the background of the applicant firm;
  • the business model;
  • the client assets;
  • the clients;
  • the governance and staff resourcing arrangements; and
  • the financial and prudential capital projections.

The guidance note also includes several templates and examples of appendices that must be completed as part of the KFD.

3. Authorisation Guidance Note on Completing an Application Form for Authorisation as a MiFID Investment Firm

This guidance note provides information and advice for potential applicants on the application process and application form requirements of the Central Bank for establishing an investment firm in Ireland under the MiFID II Legislation.  The guidance note, covers the following topics across a number of sections and appendices:

  • the application process, including the following stages: preliminary meeting, key facts document, formal application, review and decision, and the expected timeframes and documentation for each stage, where relevant;
  • the obligations of an investment firm, including a non-exhaustive list of the relevant legislation and requirements that an investment firm authorised under MiFID II must comply with;
  • guidance on completing the application form, including instructions, and the specific information and supporting documentation that must be provided by the applicant; and
  • detail relating to post authorisation, including the expectations and supervision framework for newly authorised investment firms, and the conditions and process for amending or expanding their investment services.

These guidance notes should be closely reviewed by all firms in the exploratory stage of filing an application to the Central Bank for authorisation under the MiFID II Regulations. 

If you have any queries or would like to discuss any of the points made in this update, please get in touch with Joe Beashel or Ian O'Mara or your usual Matheson LLP Financial Institution Group contact.