Financial Services Regulation and Compliance - Funds June 2023

Domestic

Access to RBO amended following CJEU’s ruling on data protection and privacy

On 13 June 2023, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2023 (SI No 308 of 2023) was commenced (available here). This SI amends the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (SI No 110 of 2019) on the register of beneficial owners (RBO) to reflect the CJEU’s overruling certain aspects of 4AMLD last November on the grounds of data protection and privacy. This will impact access to information about the beneficial ownership of companies, ICAVs and unit trusts.

The right to inspect the register will be limited to those who can satisfy the registrar of a ‘legitimate interest’. Legitimate interest will be made out where:

  • the person seeking access is ‘engaged in the prevention, detection or investigation of money laundering or terrorist financing offences’
  • the person is ‘seeking to inspect the information’ for the purposes of an activity outlined above (‘such activity need not necessarily relate to cases of pending administrative or legal proceedings in respect of the relevant entity concerned’)
  • the relevant entity concerned ‘(i) is connected with persons convicted (whether in the State or elsewhere) of an offence consisting of money laundering or terrorist financing, or (ii) holds assets in a high-risk third country’.

The wording in relation to accessing information on the beneficial holdings of a minor has been tightened.

Department of Finance consultation on Funds Sector 2030

On 22 June 2023, Minister for Finance Michael McGrath launched a public consultation as part of a review of Ireland’s funds sector under the title ‘Funds Sector 2030: Framework for Open, Resilient & Developing Markets’. The responses to the public consultation will form the basis for a series of targeted engagements by the review team with respondents and others in Q3 and Q4 of this year. The consultation document is available here. The public consultation will run until 15 September 2023.

European

ESMA to review the UCITS Eligible Assets Directive​

On 6 June 2023, the European Commission mandated ESMA is to review the operation of the Eligible Assets Directive (EAD) (available here). This review will include potential recommendations on how to amend the EAD to keep it in line with market developments. This process may include a public consultation. ESMA must deliver its technical advice by 31 October 2024.

ESMA Q&As on AIFMD and UCITS 

On 14 June 2023, ESMA updated its UCITS and AIFMD Q&As (with answers provided by the European Commission) (available here and here). The new Q&As concern passporting, de-notifying of cross border marketing and leverage.

ESMA follow-up report to the peer review on the guidelines on ETFs and other UCITS issues​

On 6 June 2023, ESMA published its follow-up report to the peer review on the guidelines on ETFs and other UCITS issues (available here). The report shows that NCAs have strengthened their supervisory practices, enhanced internal and external guidance, and performed supervisory work in the area of ETFs and UCITS since 2018. ESMA notes concern over the level of costs imposed in relation to efficient portfolio management (EPM) techniques.

Money market funds stress tests find overall resilience whilst LVNAVs exceed threshold in liquidity and credit risk scenarios

On 6 June 2023, ESMA published an article on the results of the money market funds (MMFs) stress tests (available here). While the overall market demonstrates resilience, low volatility net asset value (LVNAV) funds exceed their threshold in liquidity and credit risk scenarios. This first evidence will inform future enhancements of the MMF stress testing framework, scheduled in 2023.

For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.

Date published: 11 July 2023