Financial Services Regulation and Compliance - General Cross Sectoral Feb 2020

Domestic

The decade ahead - Governor Gabriel Makhlouf

Central Bank Governor Gabriel Makhlouf delivered a speech at the European Financial Forum in Dublin on 12 February 2020. In line with the theme of this year's forum, "Ready for a new decade", Governor Makhlouf discussed the decade ahead and looked back across the changes that have occurred during the past decade. Mr Makhlouf discussed the economical and prudential frameworks on both a macro and micro level; he also discussed the consumer protection framework and the evolving framework of European financial supervision. 

European

EBA calls for measure to promote more balanced composition of management bodies in institutions

In its new benchmarking report on diversity practices in credit institutions and investment firms, the EBA has called on institutions and Member State to consider additional measures to ensure more balanced boards. The report found that, despite legal requirements to adopt diversity policies, a significant proportion of institutions still have not adopted such a policy and not all those that have include a target for gender representation. At EU-level (in 2018), two thirds of institutions had executive directors of only one gender – in almost all of those cases, the board was composed exclusively of men – and half of all significant institutions (50.63%, down from 60.34% in 2015) had no female members of the management body in their management function. The report also found that, in most institutions, the remuneration of male members of the management body is higher than that for female members. The report highlights that diversity is not limited to gender but includes age, professional and educational background, and geographic provenance, and that more diverse boards can help improve decision making regarding strategies and risk-taking.

EBA consults on revised Guidelines on money laundering and terrorist financing risk factors

The EBA has launched a public consultation on its revised Guidelines on money laundering and terrorist financing (ML/TF) risk factors. The proposed changes include new guidance on compliance with the provisions on enhanced customer due diligence (CDD) related to high-risk third countries; new sectoral guidelines on crowdfunding platforms, corporate finance, payment initiation services providers and account service providers, and for firms  providing activities of currency exchange offices. The updated draft Guidelines also provide more details on terrorist financing risk factors and CDD measures, and set regulatory expectations of firms' business-wide and individual ML/TF risk assessments. The consultation runs until 5 May 2020.

Report: 'A new vision for Europe’s capital markets'

The High Level Forum on Capital Markets Union, established by the European Commission in November 2019, has published an interim report entitled 'A new vision for Europe's capital markets'. The report highlights the importance of progressing the Capital Markets Union and will guide the work of the Forum in the coming months. A final report with policy recommendations to the European Parliament, Member States, European Commission, and other stakeholders will be published in May 2020.

ESMA publishes first Trends, Risks and Vulnerabilities report of 2020

ESMA has published its first Trends, Risks and Vulnerabilities (TRV) report of 2020 – the first since the new ESA Regulation entered into force on 1 January 2020. It found that the risk outlook is stable, but risks remain high, particularly in the securities market and for retail investors. The report notes that ESMA sees a weaker economic outlook ahead and continuing uncertainty over the potential impact of the coronavirus, global trade negotiations and Brexit. The report also includes three articles on specific risk issues relating to bonds, BigTech, and short-termism. In line with ESMA's new mandates, the report also contains new sections on sustainable finance and consumer protection.

For more information on this topic please contact any member of A&L Goodbody's Financial Regulation team.

Date published: 6 March 2020