Domestic

Launch of the National Payments Strategy         

On 15 October 2024, the Minister for Finance launched the National Payments Strategy for Ireland (NPS). The NPS identifies four vision statements namely, access and choice, security and resilience, innovation and inclusion and sustainability and efficiency. The NPS divides these vision statements into themes and further into future outcomes. These future outcomes are accompanied by specific actions necessary to achieve the outcomes by 2030. The future outcomes listed by the NPS are as follows:

Future role for cash

• All government departments and bodies to accept electronic payments and cash payments.
• All sectors of the economy will be made aware of the forthcoming EU legal tender regulation and their obligations regarding mandatory cash acceptance.
• A comprehensive overview of the national cash cycle environment that will inform policy thinking and formation in relation to cash and payments will be conducted.

Resilience of payments

• Appropriate system-wide contingency arrangements to prepare for and manage disruptions to payment services will be put in place.
• Appropriate powers will be given to the Central Bank of Ireland (CBI) to ensure relevant firms leave the market in an orderly manner.
• A safe and easy to use EU-certified digital identity wallet will be available.

Payment fraud

• Greater anti-fraud information sharing in the Irish banking sector.
• Illegal online content flagged by the financial services industry will be prioritised for review by online platforms.
• Consumers will be less vulnerable to fraud via telecommunications channels such as texts and messages.
• Technology, financial services and telecommunications sectors, and their respective regulators, will cooperate more closely on combatting payment fraud.
• Greater awareness of fraud and fraud prevention among Irish consumers.
• Consumers will be more aware of the risk of payment fraud including that committed via telecommunications, financial services and online platforms.

Account-to-account payments

• Availability of at least one ‘pay by account’ solution as a convenient and trusted alternative to cards and cash.
• Greater awareness of open banking and account-to-account services among Irish payment service providers.

The future of payments

• Greater awareness of best practices and areas of opportunity across the payment ecosystem in the area of sustainability.

Data collection, analysis and sharing

• Greater transparency and understanding of the Irish payments landscape with insights on trends and usage of payment types.

European

EBA consults on draft technical standards for structural foreign exchange positions under the Capital Requirements Regulation (CRR)

On 28 October 2024, the EBA published its consultation paper on draft regulatory technical standards (RTS) and implementing technical standards (ITS) on the treatment of structural foreign exchange (FX) positions under the CRR.

The draft RTS largely transposes the 2020 EBA guidelines on the practical implementation of the structural FX provision in the CRR. However, the RTS also proposes a number of changes to enhance the clarity and consistency of the existing guidelines, including:

• the introduction of quantitative thresholds for a currency to be considered eligible for the structural FX treatment
• the possibility for banks to consider only credit risk own funds requirements when determining the position neutralising the sensitivity to the capital ratios, as long as the credit risk own funds requirements are the one driving the variability of the ratio against FX changes
• clarifications around how institutions are to remove the risk position from the own funds requirements for FX risk
• provisions relating the institution’s policies as regards currencies that are particularly illiquid in the market, for example, because of Union restrictive measures

The RTS also set out the policy framework for the treatment of structural FX positions, with the consultation paper also proposing a reporting requirement to be included in the ITS on supervisory reporting on structural FX permissions granted by competent authorities.

The consultation period closes on 7 February 2025. Following the consultation, the EBA will assess the feedback received and will then submit a final draft of the RTS to the European Commission.

Eurosystem launches initiatives to improve cross-border payments by interlinking fast payment systems

On 21 October 2024 the Governing Council of the European Central Bank (the ECB) decided to launch initiatives to improve cross-border payments building on the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service. The initiatives include the introduction of cross-currency settlement in TIPS and research on linking TIPS with other fast payment systems including systems outside the EU.  

The decision builds on the G20 roadmap goals for improving the global payments ecosystem and is supported by the goals of the Eurosystem’s retail payments strategy to help consumers and businesses in Europe make and receive payments outside the euro area.  

ECB consults on a recast of the regulation on oversight requirements for systemically important payment systems (SIPS Regulation)

On 18 October 2024, the ECB launched a public consultation SIPS Regulation which it proposes to recast in the interests of clarity following a review by the Governing Council.

The proposed changes to the SIPS Regulation include a revised definition of a “SIPS operator” allowing, on an exceptional basis, a euro area branch belonging to a legal entity located outside the euro area to be responsible for the operation of a SIPS. The recast regulation also proposes to explicitly require all SIPS operators to establish a risk committee to increase the effectiveness of their boards and management and introduces a new article setting out key requirements on cyber risk. New outsourcing requirements are also proposed and a separate document will be published at a later stage providing further guidance on interpreting and implementing outsourcing expectations under the SIPS Regulation.

The deadline for submitting comments is 29 November 2024 and the final SIPS Regulation will be published when feedback has been considered.

EBA launches consultation on draft technical standards to support the centralised EBA Pillar 3 data hub

On 11 October 2024, the EBA launched a consultation relating to the EBA’s planned Pillar 3 data hub as part of the changes introduced by CRD 6 / CRR 3. The data hub will centralise credit institutions’ prudential disclosures through a single electronic access point on the EBA website.

The consultation requests feedback on a draft ITS which sets out the processes for credit institutions other than small and non-complex institutions when submitting Pillar 3 disclosures through the EBA’s Pillar 3 data hub. The ITS addresses IT solutions, disclosure formats, the resubmission policy, data exchange formats and technical validations to be performed by the EBA.

A summary of industry feedback on these points and corresponding EBA analysis is also included in the consultation paper. The deadline for submission of responses is 11 November 2024 and the EBA will publish the corresponding draft ITS for small and non-complex credit institutions separately at a later date.

The European Payments Council publishes first Verification of Payee Scheme Rulebook

On 10 October 2024, The European Payments Council (EPC) published the first version of the Verification of Payee Scheme Rulebook (VOP Rulebook). The VOP Rulebook supports payment service providers (PSPs) in the Single Euro Payments Area (SEPA) in meeting the new regulatory requirements in the Instant Payments Regulation which amends the SEPA Regulation.

The VOP Rulebook is limited to verifications of a payee related to a SEPA credit transfer or a SEPA instant credit transfer to allow PSPs time to comply with the regulatory requirements within the deadlines. However, the EPC stated that future versions of the VOP Rulebook could cover other payment instruments as well, depending on market needs.

The EPC also published the EPC recommendations for the matching processes under the VOP Rulebook on 10 October 2024. The recommendations address the matching outcomes for the payment counterparty attribute combinations supported by the VOP Rulebook.

European Payments Council publish update Mobile Initiated SEPA (Instant) Credit Transfer Payments and Technical Interoperability Guidance

On 2 October 2024, the EPC published the third version of the Mobile Initiated SEPA (Instant) Credit Transfer (MSCT) and Technical Interoperability Guidance (the guidance). The guidance focuses on technical interoperability and was updated following a public consultation.

The publication has been amended to include guidance regarding key use-cases including payee-presented mode, payer-presented mode, and mode relying on payment initiation service providers. The document also contains detailed transaction flows for contexts requiring interoperability. The new version is also updated to reflect the introduction of the Instant Payments Regulation, outlining minimum data sets for interoperability and interoperability challenges and opportunities for MSCT service providers.

European Commission consults on EU securitisation rules        

On 9 October 2024, the European Commission (the Commission) launched an eight week consultation on EU securitisation rules. The consultation comes against the background of the Draghi and Noyer reports which both suggested changes to the current securitisation requirements and frameworks as well as the addition of a securitisation platform.

The consultation seeks feedback on a broad range of topics, including:

• the effectiveness of the securitisation framework
• scope of application of the Securitisation Regulation
• due diligence requirements
• transparency requirements and definition of public securitisation
• supervision
• the STS standard
• securitisation platform
• prudential and liquidity treatment of securitisation for banks, insurers and pension funds

The deadline for responses to the consultation is 4 December 20204. The Commission will then review the feedback and consider it in the context of possible amendments in the forthcoming review of the framework.

EBA publishes its Work Programme for 2025     

On 2 October 2024, the EBA published its Work Programme for 2025 (the programme) setting out its priorities and the initiatives it plans to undertake in 2025. The programme listed the EBA’s preliminary strategic priorities as follows:

1. implementing the EU Banking Package and enhancing the Single Rulebook
2. enhancing risk-based and forward-looking financial stability for a sustainable economy
3. enhancing data infrastructure and launching a data portal
4. starting oversight and supervisory activities under the Digital Operational Resilience Act (DORA) and Markets in Crypto-Assets Regulation (MiCAR)
5. developing consumer oriented mandates and ensuring a smooth transition to the new anti-money laundering and countering the financing of terrorism (AML / CFT) framework

The programme identifies 19 activities and associated deliverables necessary to accomplish the five preliminary priorities and also lists resource allocation across each activity. The programme also includes the peer review work plan for the next two years.

For more information on these topics please contact any member of A&L Goodbody's Financial Regulation Advisory team.

This publication provides an overview of certain legal and regulatory developments that may be of interest to certain entities. It does not purport to provide analysis of law or legal advice and is strictly for information purposes only.