Asset Servicing Times | Central Bank of Ireland offers flexibility around regulations amid COVID-19

The Central Bank of Ireland has provided some relief for securities markets, investment management, investment firms and fund service providers amid COVID-19 challenges.

Recognising the current challenges, the Central Bank of Ireland is allowing flexibility in respect of the remittance dates of a number of regulatory returns due from investment firms, fund service providers and investment funds over the COVID-19 period.

Brown Brothers Harriman’s senior vice president of regulatory intelligence, Adrian Whelan, explained that this provides overall certainty of approach and formal fall back for any firm struggling with statutory timelines.

Whelan said: “There’s a lot to be managed currently and all breathing space is welcome as multiple competing priorities are dealt with.”

To help firms, the Central Bank of Ireland is clarifying its expectations relating to the deadlines for the submission of assurance reports in respect of investment firms and fund service providers’ arrangements for the safeguarding of client assets or investor money.

Further clarification will be given for the bank’s expectations on risk mitigation programme implementation dates, and the bank will also postpone its regular assessments of the domestic regulatory policy framework in respect of securities markets, investment management activities and investment firms.

Commenting on the bank’s relief, Whelan noted: “In both its timing and flexibility the Central Bank of Ireland publication is very useful. There had been some previous industry anxiety mainly relating to the Central Bank of Ireland’s view of local implementation of certain regulatory relief already granted by European Securities and Markets Authority (ESMA) but requiring national regulator action. Last week’s pronouncements filled that vacuum and removed many uncertainties especially with it being so comprehensive.”

According to Whelan, regulators expect managers to continue to meet best execution standards regardless of COVID-19. ESMA gave managers a little leeway on transaction reporting deadlines, but when in terms of components like price, cost or order management these must continue to be complied with in full.

When asked if COVID-19 could cause further significant changes to regulation, Whelan said: “COVID-19 is primarily a health crisis which has led to significant market impacts. Generally, despite a significant increase in volatility and volumes, largely the markets have continued to function well. I would expect areas that had already been the subject of much regulatory scrutiny such as fund liquidity, cybersecurity and BCP to be revisited, but in terms of a roll-out of significant new regulations such as the 2008 crisis, I do not believe this will be a consequence of the COVID-19 pandemic.”

To read the full report by the Central Bank of Ireland, please click here.

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