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Flags for Finance in 2018
AUTHOR(S): Patrick Molloy, Peter O’Brien, Alma Campion, Rory McPhillips, Laura Gleeson, Donal O’Donovan, Stuart Kennedy, Chris Quinn, William Prentice, Ruth Hunter, Turlough Galvin, Christian Donagh, Alan Keating
PRACTICE AREA GROUP: Structured Finance and Derivatives, Banking, Regulatory and Investigations, Corporate Offences, Fraud and White Collar Crime
The main themes to be considered by those in the financial services industry in 2018 will include increased regulation, protection of data, the push for transparency from Europe along with the ongoing uncertainty of Brexit. We have flagged some key dates to watch out for in the upcoming year.
January - Register of Beneficial Ownership - A national central register of beneficial ownership (to be run by the Registrar of Companies at the Companies Registration Office) is scheduled to be launched in Q1 of 2018. All corporates and industrial and provident societies will need to file detailed information about their beneficial owners online to be stored on the central register and it is expected that there will be a certain time period within which such filing obligations must be met. In the aftermath of the global financial crisis, Europe looked to increase transparency on individual ownership of corporates and this issue became a core feature of the 4th AMLD. Later in 2018 will see the finalisation of the 5th AMLD which will take the transparency objective to another level by ultimately making all national central registers of beneficial ownership throughout the EU publicly accessible and searchable in certain circumstances.
February - 75th anniversary of the Central Bank of Ireland - As part of the commemorative programme, a symposium on financial globalisation (including speakers from the Federal Reserve Bank of New York, BIS and the IMF) will be held to celebrate the 75th anniversary of the Irish Central Bank on 2 February 2018.
March - Securitisation - 15 March 2018 is the deadline for sending comments on two recent European Banking Authority’s public consultations on the draft Regulatory Technical Standards related to risk retention and on the new homogeneity requirement which aims to help investors assess underlying risks and perform the required due diligence in relation thereto. These consultations are part of the new EU securitisation framework (described by the EBA as “one of the cornerstones of the Capital Markets Union, the EU Commission’s pivotal project to build a single market for capital in the EU”) which along with the recent “STS” Securitisation Regulation aim to increase transparency about the securitisation process by the introduction of a new simple, transparent and standardised categorisation for securitisation which from 1 January 2019 should benefit from a lower risk weighting for capital purposes once all relevant technical standards have been finalised.
April - Corruption offences - Under the Criminal Justice (Corruption Offences) Bill 2017 which is currently being processed, a body corporate in Ireland may soon be found criminally liable if any director, manager, secretary, agent or subsidiary of the body corporate commits an offence as set out in the Bill with the intention of “obtaining or retaining business or an advantage in the conduct of business for the body corporate”.
May - GDPR - The General Data Protection Regulation will come into force across the EU on 25 May 2018 and the new European Data Protection Board which is the joint body of national data protection authorities will assume its functions on the same date.
June - National insolvency registers - On 26 June 2018, in accordance with article 24 of the recast EC Regulation 2015/848 on insolvency proceedings, national insolvency registers are due to be established by member states with the aim of permitting all such national registers to interconnect a year later in order to allow a search against insolvent entities (either natural or legal persons) across the EU.
July - Corporate enforcement - The Legislative Programme for Spring 2018 (as published by the government on 16 January 2018) explained that in addition to the 49 priority pieces of legislation, there are other bills that are expected to undergo pre-legislative scrutiny in 2018 – one is the Companies (Enforcement) Bill which seeks to “amend the Companies Act 2014 with respect to the structure of the Office of the Director of Corporate Enforcement with a view to establishing a new independent agency to investigate breaches of company law”.
August - EU Legislation - In accordance with the better law-making agreement, the EU Council, Parliament and EU Commission set out in their joint declaration their legislative priorities for the upcoming year. The 7 key initiatives which will be prioritised for 2018 focus on the implementation of a Digital Security Market, increased security for EU citizens, reform of migration policy, boost to jobs and investment, analysis of the social dimension of the EU, advancement of the Energy Union along with the development of a democratic legitimacy at EU level. They also agreed that progress should be made to ensure a “high level of data protection, digital rights and ethical standards while capturing the benefits and avoiding the risks of developments in artificial intelligence and robotics”.
September - EU Commission Work Programme - Looking at the EU Commission’s Work Programme for 2018 it is interesting to note that the EU Commission “has already delivered over 80% of the proposals that are essential for completing the Digital Single Market, the Energy Union, the Capital Markets Union, the Banking Union, the Security Union and a comprehensive European migration policy”. The plan is to now turn the proposals into legislation and the EU Commission has committed to “table all legislative proposals no later than May 2018” before the European elections in June 2019. The EU Commission stated that it “will focus its efforts in the next year on revising EU company law to support businesses with clear, modern and efficient rules “ and “to complete the Capital Markets Union, we will make proposals to tackle the interaction between finance and technology and we will propose rules on crowd and peer to peer funding”.
October - Brexit - Time to stop talking and put down your pens! Michel Barnier has proposed that negotiations on Article 50 stop on 18 October 2018 in order to give sufficient time for ratification of the withdrawal agreement.
November - Real Estate - In the residential property space, an interesting proposal is the plan by the government (as flagged in the Legislative Programme for Spring 2018 as priority legislation) to set up under the Home Building Finance Ireland Bill a stand alone institution called Home Building Finance Ireland which will “lend to residential housing developers on commercial, market equivalent terms and conditions”. The Legislative Programme has also indicated that the Courts & Land Conveyancing (Amendment) Bill will be a priority for this year. Mortgage repossession proceedings will be the focus of this legislation along with certain aspects of the private members bill entitled Keeping People in their Homes Bill (which proposed to ensure that prior to issuing any court order for repossession, Irish courts would be obliged to assess fully the impact of any such repossession on people who are ordinarily resident in such properties). The Legislative Programme for Spring 2018 has also indicated that work is underway on the draft legislation for a new government body called Tailte Eireann. Both Ordnance Survey Ireland and the Property Registration Authority of Ireland will be dissolved with functions of both agencies to be transferred to Tailte Eireann which will also deal with the valuation of commercial and industrial properties in Ireland.
December - EU Roadmap - Europe will be focussing on financial union in 2018 and has laid out its more detailed aims for this year in its roadmap to include the adoption of the final proposals for Banking Union and the creation of an enabling framework for European Sovereign Bond-Backed Securities for the euro area. President Juncker emphasised the importance of this issue in his State of the Union address delivered in September 2017 when he said “Banking Union can only function if risk-reduction and risk-sharing go hand in hand”. Following the mid-term review of the Capital Markets Union Action Plan, the European Commission set out the “building blocks” to ensure that the CMU will be in place by mid 2019 and such blocks include a “comprehensive EU strategy on local and regional capital markets developments across the EU” by mid 2018.