CLIENT ASSET REQUIREMENTS

The Central Bank of Ireland's revised Client Asset Requirements apply to credit institutions from 1 January 2024. The related Guidance (which broadly reflects the draft Guidance that was available on the Central Bank's website since June 2022) applies from the same date.

CONSUMER PROTECTION CODE

Indications from the Central Bank at its Financial System Conference on 8 November 2023 were that the consultation paper on planned changes to the Consumer Protection Code (CPC) is likely to be published early in Q1 2024.

From the perspective of the Individual Accountability Framework (IAF), the consultation paper is very keenly awaited as the Business Standards under the IAF will be set out in the CPC (the Business Standards will apply to all regulated financial service providers (RFSPs) albeit the Central Bank may apply the standards differently as between different classes of RFSPs).

For more information on the upcoming CPC consultation, read our insights here: CPC Update: Revised 2024 CPC Regulations to be updated again in 2025. We will publish insights on the key themes from the CPC consultation and the likely impacts for our clients when the consultation paper is published.

NON-PERFORMING LOANS / TRANSPOSITION OF THE CREDIT SERVICING DIRECTIVE

Transposing regulations for the EU Credit Servicing Directive were signed on 21 December 2023 and published on 2 January 2024.

As signposted in the Department of Finance's June 2023 Feedback Statement on its national discretions consultation, two frameworks will run in parallel: the Directive's framework will apply to post-transposition sales and servicing of NPLs originated by EU banks, with the existing Irish credit servicing framework continuing to apply to the sale and servicing of performing loans, pre-transposition NPLs originated by EU banks, and the sale and servicing of NPLs originated by non-bank lenders.

The Department of Finance confirmed in its press release and in its updated December 2023 Feedback Statement that it changed its planned approach to the exercise of one particular national discretion between the June 2023 Feedback Statement and transposition. The discretion under Article 2(6) to exclude public notaries, bailiffs and lawyers from the Directive's scope will, following consultation with the Central Bank, be exercised.

MACROPRUDENTIAL MEASURES FOR GBP LIABILITY-DRIVEN INVESTMENT FUNDS

The Central Bank's consultation: CP157 - Macroprudential measures for GBP Liability Driven Investment (LDI) funds, closes on 18 January 2024.

The consultation follows the Central Bank's November 2022 industry letter which set out its supervisory expectations for GBP LDI funds to maintain an improved level of resilience. In particular, the letter outlined that GBP denominated LDI funds were expected generally to maintain the enhanced level of resilience observed at the time (resilience to a 300-400 basis point increase in yields, referred to as a 'yield buffer').

The consultation paper sets out a proposal to codify and, in certain cases, augment the existing yield buffer measure, including via the use of Article 25 of the AIFMD.

The Central Bank plans to publish a feedback statement and announcement of the final measures in Q1 2024, followed by a three month implementation period.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.