IRELAND AWM REGULATORY UPDATE - FEBRUARY - APRIL 2020 - PWC
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Ireland AWM regulatory update February – April 2020
Table of contents
The Irish funds industry in numbers 3
AWM regulatory landscape: February – April 2020 4
Business continuity & resiliency: the latest developments 10
ESG & sustainable finance: the latest developments 11
Upcoming deadlines 12
PwC Asset & Wealth Management credentials 13
Our team 15
Ireland AWM regulatory update 2
The Irish funds €5.2tn €3.0tn €2.2tn
industry Total assets under
administration in
Total domiciled
funds in Ireland
Total non-domiciled
funds in Ireland
in numbers Ireland – February
2020
– February 2020 – February 2020
€284bn 40% 7,685
Net sales of domiciled Percentage of hedge Number of funds
funds in 2019 – funds that Ireland domiciled in
December services – Ireland –
2019 February 2020 March 2020
61% €2.3tn €751bn
Ireland’s share of Net assets of UCITS Net assets of AIFs
European ETFs – in Ireland – February in Ireland – February
December 2020 2020
2019
Source: Irish Funds – Industry Statistics: February 2020
Source: EFAMA – International Statistical Report Q4 2019
Source: CBI Monthly Fund Data – March 2020
Ireland AWM regulatory update 3
AWM regulatory landscape: February – April 2020
CBI Flexibility Measures / COVID-19 and management/interim accounts with ● Other Matters: The CBI has advised that In the Report the CBI has detailed a number
– Securities Markets, Investment reporting dates between March – May it will postpone the publication of the of work priorities for 2020. These priorities
Management, Investment Firms and 2020 will be given a one-month feedback statement in relation to the are informed by the sectoral risk analysis
Fund Service Providers extension. Consultation Paper 130 (‘CP130’), along with the its assessment of where
Treatment, Correction and Redress of interventions have the greatest potential to
On 14 April 2020, the Central Bank of ● Capital Adequacy Returns for Investment Errors in Investment Funds. minimise risks for consumers.
Ireland (‘CBI’) announced a number of new Firms and Fund Service Providers:
prudential regulatory flexibility measures in Applicable firms will all be given a one- ● Deploy assertive risk-based supervision
The News Release is available here. ?
response to the challenges posed by month extension where the reporting
date for these returns occurs between ● Drive firms to embed effective consumer-
COVID-19. The notice gives flexibility with
March to May 2020. focused cultures
regard to the remittance dates of a number
of regulatory returns due from investment Consumer Protection – Consumer ● Enhance the gate-keeping process
● Client Asset and Investor Money
firms, fund service providers, and Protection Outlook Report 2020
requirements: Assurance reports in
investment funds. It is important to note that ● Ensure the fair treatment of borrowers in
respect of investment firms/fund service
the CBI still expects relevant parties to meet On 10 March 2020, the Central Bank of mortgage arrears
providers’ arrangements for the
the existing reporting deadlines if they are in Ireland (‘CBI’) produced its Consumer
safeguarding of client assets or investor ● Influence & shape the regulatory
a position to do so. A summary of the Protection Outlook Report 2020. The Report
money will be provided submission framework
extensions are as follows; sets out the key risks to financial services’
flexibility if falling due between April to
July 2020. Extension requests must be consumers. It also provides information ● Strengthen the consumer protection
● Filings of Financial Statements of regarding the CBI’s own consumer
Investments Funds: Authorised made with the Client Asset Specialist framework
Team (‘CAST’) or by contacting the protection priorities which include the key
investment funds that are not in a policy and supervisory work which will be
position to meet their filing deadlines will CAST mailbox (CAST@centralbank.ie) in The Report is available here. ?
a timely manner, explaining the rationale focused on over the coming year. The CBI
be given extensions. Annual financial has identified six key cross sectoral risks in
statements with a period ending between and estimated submission date.
the Report as follows;
31 December 2019 to 31 March 2020 will
● Risk Mitigation Programmes (‘RMP’s) for
be given two months, and between ● Brexit related risks Cybersecurity – Thematic Inspection of
Investment Firms and Fund Service
1 April 2020 to 30 April will be given one Cybersecurity Risk Management in
Providers: In cases where firms are ● Ineffective disclosure
months. Semi-annual financial Asset Management Firms
having difficulties in relation to meeting
statements with a reporting period ending
specific RMP submission dates they ● Information Technology (I.T.) & Cyber On 11 March 2020, the Central Bank of
between 1 February 2020 to 31 March
must reach out to their usual supervisors risks Ireland (‘CBI’) published a Letter detailing
2020 will also be allowed a one month
giving a suitable rationale. Supervisors the findings from its recent inspection of
filing extension. ● Irresponsible unsecured lending
will then consider on a case-by-case cybersecurity risk management at asset
● Regulatory Requirements applicable to basis whether the postponement of such management firms. The aim of the thematic
● Lack of consumer-focused culture
Investment Firms and Fund Service measures is consistent with the inspection was to determine the
Providers: Annual audited accounts due objectives of the overall flexibility ● Poor governance & oversight of cybersecurity risk management practices of
for submission between April to July 2020 measures. outsourcing arrangements the inspected firms, to consider the
will be given a two-month extension, adequacy of the cybersecurity controls, and
to identify good practices.
Ireland AWM regulatory update 4
AWM regulatory landscape: February – April 2020
The purpose of this Letter is to detail the Data Protection – Guidance Note: Data Protection – Data Protection and ● The blog also listed the most frequently
key findings, which the CBI expects firms to Cookies and Other Tracking COVID-19 asked questioned raised to the DPC by
consider, and then evaluate their own Technologies employers in recent weeks, and a list of
cybersecurity risk management practices to On 10 March 2020, the Data Protection responses about how they can ensure
ascertain if improvements are required. The On 07 April 2020, the Data Protection Commission (‘DPC’) published a blog any measures carried out are compliant
key findings of the on-site inspections Commission (‘DPC’) released a Guidance outlining key considerations for with data protection law.
include the following; Note in relation to cookies and other organisations in relation to data protection
tracking technologies. Regulation 5 of the and COVID-19, accompanied by a Q&A
The Blog and Q&A are available here. ?
● A strong culture of cybersecurity within ePrivacy Regulations is the relevant section including a number of important
firms is not being adequately prioritised legislation in Ireland regulating the use of questions raised by employers.
by senior management and boards. cookies and similar tracking technologies.
The DPC primarily notes that data
● Deficiencies in Information Technology Cookies are typically small text files stored protection law does not stand in the way of Employment – COVID-19: List of
(‘I.T.’) asset inventories were identified, on a mobile devices and computers that the provision of the management of public Essential Service Providers Under New
whereby inventories hadn’t classified contain data related to the website you visit. health issues and healthcare. Nevertheless, Public Health Guidelines
assets by their business criticality and/or They are typically first party (set by your organisations should have regard to the
had not captured the complete I.T. On 31 March 2020, the Government of
own website also known as the host following obligations regarding COVID-19;
estate. Ireland (‘GoI’) released Guidelines detailing
domain,) or third-party cookies (set by a
● Accountability: Controllers must the list of essential service providers under
domain other than the one the user is
● Many cybersecurity incident response document any decision-making process new public health guidelines. The purpose
visiting). The expiry date of these cookies
and recovery plans were incomplete, or relating to measures implemented to of the document is to communicate to
must be proportionate to their purpose and
not tested with enough frequency, manage COVID-19. employers and employees as to what
expire once it has served its function or else
therefore not meeting the CBI’s constitutes an essential service where
soon afterwards. Common types of other
expectations. ● Confidentiality: The security of data is of workers cannot work from home and have
tracking technology include ‘like’ buttons
paramount importance, and the identity no option but to travel to work. The list
● Reporting of cybersecurity risks was and social sharing tools, and device
of affected individuals should not be includes banking and financial services
variable in quality and frequency, and fingerprinting technologies. The law on
disclosed to third parties without a clear (including banks, credit unions and post
risk indicators were not sufficiently cookies generally applies to these tools and
justification. offices); accountancy, legal and insurance
focussed on quantitative indicators. all other existing tracking technology.
services, necessary to support essential
● Data Minimisation: Only the minimum services and vulnerable people.
● Despite good progress by a number of The document details a variety of different
necessary amount of data should be
firms, many of the weaknesses sub-topics in relation to cookies and
processed. Employers are asked to refer to these
highlighted in the CBI’s cross industry tracking technologies such as consent
Guidelines in deciding whether its
guidance in 2016 are still prevalent over issues, transparency information & ● Transparency: Organisations should organisation qualifies as an essential
three years later which is of real concern responsibilities under the General Data document the purpose of collecting the service; it is not necessary to seek official
for the CBI. Protection Regulation (‘GDPR’), the personal data and the time for which it authorisation. Essential service
processing of personal data, and special will be retained. The information organisations must identify their employees
category data. recorded must be concise, easily
The Letter is available here. ? who are essential to the provision of that
accessible, and easy to understand. service and notify them.
The Guidance Note is available here. ?
Ireland AWM regulatory update 5
AWM regulatory landscape: February – April 2020
Moreover, the latest public health guidance ● Reg-tech firms were the most frequent Since the release of the funding Under EU Benchmark Regulation (‘BMR’)
should be adhered to at all times. These user of the Hub accounting for 26% of arrangements for 2019-2002, the ICCL has investment funds must use reformed or
organisations must also have business firm enquiries. The most common identified additional risks to achieving its alternative benchmark rates by the end of
continuity and resilience plans in place and applications that were addressed in this targets. Principally, a funding related risk 2021. The CBI is encouraging action should
take account of the possibility that key area were Know Your Customer (‘KYC’) that arises where a significant book(s) of be taken now in order to ensure an orderly
employees or facilities may be impacted. solutions, and risk management & business is being acquired by, or transition to the new rates.
Per the financial and legal activities section, compliance monitoring Solutions. transferred to, firms within the scope of the
‘banking and financial services’ are listed as ICS in the absence of matching funding The significance of benchmark reform and
essential services under the Guidelines. ● The key technology related enquiries being received by the ICS. related changes to current business
focussed on the unbundling of the practices is underlined by the widespread
financial services value chain, Artificial Consequently, the new RE levy will only use of benchmark rates in investment
The Guidelines are available here. ?
Intelligence (‘AI’), and blockchain / apply in cases where a firm acquires a funds, e.g. financial contracts and risk
Distributed Ledger Technology (‘DLT’). significant book of new business that is not models. Separate transition routes will be
currently within the scope of the ICS. used for separate benchmark rates which
The complete Update is available here. ? Existing and future levies will not be will add to the difficulty of addressing the
Fintech – Innovation Hub 2019 Update
impacted unless the firm acquires new impact of these changes on investment
On 24 February 2020, the Central Bank of business in this fashion. funds and their investors.
Ireland (‘CBI’) produced an update review of
Boards of fund management companies are
the Hub providing a detailed analysis of its Funding Levies – Dear CEO Letter The full Dear CEO letter is available here. ?
the ultimate responsible parties for ensuring
findings from its launch in April 2018 up to – Introduction of a New Risk the appropriate preparations are made for
December 2019. The document draws most Equalisation Levy with Effect from each fund it manages, including an analysis
of its findings from information collected 1 March 2020 Interest Rate Benchmark Reform –
of the effects on investment strategies, day-
through Hub engagements with support Industry Letter – Funds Preparation to-day fund operations, and fund investors.
from the Fintech Network. The key On 11 February 2020, the Investor with Regard to Interest Rate Following this analysis, it is recommended
takeaways from the Update are as follows; Compensation Company Limited (‘ICCL’) Benchmark Reforms that Boards develop detailed plans which
issued a Dear CEO letter introducing a new
● There have been 166 engagements may include engagement with investors,
Risk Equalisation levy (‘RE levy’) due to On 20 April 2020, the Central Bank of
facilitated by the Hub since April 2018; prospectus/documentation changes, and
come into effect on 01 March 2020. The Ireland (‘CBI’) published a Letter from its
comprising 52 enquiries from steps to address potential risks.
decision to implement the RE levy follows securities and markets division dealing with
stakeholders and 114 from firms. consultation with the Central Bank of Ireland funds preparation regarding interest rate
(‘CBI’). The ICCL believes that it is benchmark reforms. The Letter dated 28 The Letter is available here. ?
● 37% of firm enquiries were from early
necessary in order to meet its statutory February 2020, was made available on the
stage start-ups and 80% of these firms
objectives, and to fairly address associated CBI’s website in mid-April. The aim of this
were Irish founded firms.
risks. One of the key purposes behind document is in order that responsible
● 70% of enquiries were from small and implementing the RE levy is to address parties for managing investment funds are
micro size firms. potentially more onerous obligations of the reminded of their obligations to adequately
ICS that may occur in the future, and prepare for the implementation of the new
● 92% of enquiries were from firms who therefore ensure that the ICCL has global benchmark reforms and any
are unauthorised by the CBI. adequate resources to meet reasonably associated risks.
foreseeable liabilities.
Ireland AWM regulatory update 6
AWM regulatory landscape: February – April 2020
Organisational Culture – Demographic ● New firms seeking authorisation continue ● PCF-50: Head of Material Business Line Shareholders' Rights – European
Analysis – Applications for Pre- to show lower levels of gender diversity under the ‘Banking’ category – a material Union (Shareholders’ Rights)
Approval Controlled Function (PCF) in comparison to existing firms. business line is one which accounts for Regulations 2020 [S.I. No. 81 of 2020]
Roles in Regulated Firms – 2019 10%+ of the credit institution’s gross
● Board level appointment applications revenue or has gross total assets equal On 23 March 2020, the Government of
On 11 March 2020, the Central Bank of made up two-thirds of all applications, of to or greater than €10 billion. Ireland (‘GoI’) enacted the European Union
Ireland (‘CBI’) issued a Report of a which female applications increased from (Shareholders’ Rights) Regulations 2020
demographic analysis of the applications for 20% in 2018 to 24% in 2019. ● PCF-51 – Head of Market Risk under the [S.I. No. 81 of 2020] (‘the Regulations’). The
Pre-Approval Controlled Function (‘PCF’) ‘Banking’ category – an applicable role in Regulations came into force on 30 March
● 63% of PCF role applicants were Irish credit institutions whereby market risk
roles within regulated firms in 2019. The 2020 and introduce a range of new rules on
nationals and the UK was second largest satisfies either of the following as
fourth edition of this Report analyses PCF investor strategy transparency and investor
with 18% of the portion of applications. reported in quarterly returns; €500m of
applications submitted to the CBI since engagement for asset manager and
2012 when the Fitness & Probity (‘F&P’) market risk (including credit valuation institutional investors investing on their
● Two-thirds of all applicants were 35-54
regime came into effect. The work adjustment) risk weighted assets, or behalf. They are applicable to institutional
years of age.
completed also examines the diversity €100bn of notional derivatives traded. investors and assets managers (including
levels of persons approved to act in board Markets in Financial Instruments Directive
The Report is available here. ? Split of PCF-39 role
level and/or senior management roles within (‘MiFID’) firms, Alternative Investment Fund
certain regulated firms at 31 December ● The CBI has proposed to separate the Managers (‘AIFM’s), Undertakings for
2019. The key points from the Report are as PCF-39 role into six new PCF roles Collective Investment in Transferable
follows; aligned to the specific managerial Securities Directive (‘UCITS’) management
Organisational Culture – Notice of companies, and self-managed UCITS).
Intention – Additions to the List of Pre- functions set out in the CBI UCITS
● 4,500 Individual Questionnaire (‘IQ’)
Approval Control Functions (PCFS) Regulations, AIF Rulebook, and Fund
applications in 2019 for 5,500 roles. The first key requirement relates to the
Management Companies Guidance
establishment of a shareholder engagement
● Females applications for PCF roles On 26 February 2020, the CBI published a 2016.
policy. The policy must describe how it
across the financial services sector Notice of Intention in relation to PCF roles. monitors the companies in which it is
It is proposing to introduce two new The new splits are as follows;
increased from 24% in 2018 to 26% in invested, and how shareholder engagement
2019. changes in relation to this topic comprising ● PCF 39A: Designed Persons for - Capital is linked into the firm’s investment strategy.
of the following updates; & Financial Management This requirement is subject to a comply or
● 87% of PCF positions in the asset
explain condition, which gives firms a
management sector are held by males. 3 New PCF Roles ● PCF 39B: Operational Risk Management chance to disclose publicly why they are not
● 76% of role holders for risk management ● PCF-49: Chief Information Officer (‘CIO’) complying should they choose to do so.
● PCF 39C: Fund Risk - Management
and control roles (such as head of under the ‘General’ category – this role
The other requirement from the Regulations
internal audit), and 85% of revenue will typically apply to the most senior ● PCF 39D: Investment Management
relates to reporting. On an annual basis
generating roles (such as chief executive individual in the Regulated Financial
● PCF 39E: Distribution there must be disclosures made regarding
office and heads of business lines) are Service Provider (‘RFSP’) who has
how the shareholder engagement policy
held by males. responsibility for I.T. matters. RFSPs
● PCF 39F: Regulatory Compliance has been implemented, giving a description
must review themselves and determine
of the voting method and behaviour.
whether the role meets the substance of
a CIO. The Notice is available here. ?
Ireland AWM regulatory update 7
AWM regulatory landscape: February – April 2020
Similarly, institutional investors must be ● Section 2: FVC/SPV Delineation – This Notes on Compilations document gives Special Purpose Entities (SPE): FVC
informed annually, as to the performance of Another information section to assist a detailed overview of the SPE reporting and SPV Registration Form – Guidance
their investment in relation to a set of reporting agents in making the distinction form, and comprehensive guidance on how Notes (Updated 5 March 2020)
specific reporting metrics. Such reporting between FVCs and SPVs. It includes a to report each class of asset and liability,
can be made privately directly to investors, summary checklist, guidance from the plus solutions to common errors. There are Finally, also on the same date, the Central
or via a public document such as the fund’s European Central Bank (‘ECB’), working six sections in the document; Bank of Ireland (‘CBI’) released Guidance
annual report. examples, exceptions, and a practical Notes in relation to registration forms for
decision tree. ● Section 1: Introduction – First part of the two types of Special Purpose Entities
Firms must now implement a shareholder document that contains an introduction to (‘SPE’) entities – Irish-resident securitisation
engagement policy and begin to consider ● Section 3: How to Report & Data Quality SPE reporting to the CBI and an vehicles (‘FVC’s) and Irish resident section
the annual reporting obligations or prepare Management – Incorporates the majority overview of the return. It further contains 110 companies (‘SPV’s). The document is a
a non-compliance statement in the case of the document and covers two parts. some valuation and formatting principles useful guide for users in illustrating the
they are decided to opt out. The ‘How to Report’ pages include which should be adhered. registration process for registering a SPE
details on the registration process, the with the CBI to fulfill the reporting
reporting form, the Online Reporting ● Section 2: Transactions & Other
The Legislation is available here. ? requirement. There were four sections
System (‘ONR’) and the sign-off process. Movements – Definitions of how
amended on the document from its most
The ‘Data Quality Management’ portion accruals, valuations, and transactions
recent update on 18 December 2019.
addresses the initial validation of data, are reported in the return.
Special Purpose Entities (SPE): the turnaround of validation checks, and ● FVCs: it has been clarified that vehicles
● Section 3: Detailed Instrument Definitions
any additional queries & historical which are solely funded by a combination
Registration – FAQs – A detailed outline of how and where
checks. of sponsor, or related party, funding and
each class of instrument should be
On 06 March 2020, the Central Bank of loans are not considered to be FVCs.
● Section 4: Frequently Asked Questions: reported.
Ireland (‘CBI’) published a Registration More detail on how to determine if a
FAQs for Special Purpose Entities (‘SPE’s). Covers the most commonly raised vehicle is an SPE or an FVC, and on the
● Section 4: Definition of Counterparty
The purpose of the document is to provide a questions and answers which mainly definition of an FVC is available on the
Residency & Section 5: Definitions of
summary of the procedures and focus on procedural questions and ONR new FAQ document (referenced above)
Sectors – Both of these areas
requirements for the reporting agents of error messages. which should be consulted before the
concentrate on the process of reporting
both new and existing Irish-resident of counterparty information. submission of any new SPE registration
securitisation vehicles (‘FVC’s) and Irish The FAQs are available here. ? forms.
resident section 110 companies (‘SPV’s). ● Section 6: Common Mistakes & FAQ -
Common reporting queries received by ● External Financing: this is a non-
The reporting requirement for firms in this
the CBI, and guidance on particular securitisation SPE activity whereby the
area is available on the CBI’s website here.
Special Purpose Entities (SPE): scenarios. financing must be a loan to the parent or
The document is divided into four sections;
Quarterly Reporting – Notes on related party, and it does not include
● Section 1: Getting Started – This section financing raised and furthered onto an
Compilation The Notes on Compilations are ?
is separated into two similar parts; one investment platform or fund.
available here.
for FVCs and the other for SPVs. Both On the same day, the Central Bank of
parts covered the entities required to Ireland (‘CBI’) released its latest Special
report, submissions deadlines, and the Purpose Entity (‘SPE’) quarterly reporting.
basis for collection.
Ireland AWM regulatory update 8
AWM regulatory landscape: February – April 2020
● Investment Fund-Linked Investments: Supervision – Prism Impact Review - Following the review, that has now been
this section has been extended to state Revised Prudential Impact Models amalgamated into nine agreed prudential
that if the entity participating in this non- impact models to inform supervision for
securitisation SPE activity is linked to an On 12 February 2020, the Central Bank of these sectors. The new nine models are as
investment fund; then the related Ireland (‘CBI’) released its review of the follows;
information must be included on either Probability Risk and Impact SysteM
the non-consolidation interest table or the (‘PRISM’), examining the prudential impact ● Broker Dealers
consolidated interest tab of the form. In models in a number of financial service
sectors including asset management. ● Client Assets Financial Service Providers
cases where the entity is linked to an
Irish fund, then the CBI code of the fund ● No-Client Assets Financial Service
should be inputted. These CBI codes can This paper provides updated information as
to how the CBI is approaching its Providers
be found on the CBI website here.
supervisory activities and allocating internal ● Fund Administrators
● Leasing/Sub-Leasing: Both these resources. It also explains how the CBI’s
activities have also been included as approach towards the prudential impact ● Depositaries
non-securitisation SPE activities. Leasing models is changing since the publication of
is defined as the purchase of physical ‘PRISM Explained’ (which outlines how the ● Fund Management Companies
assets leased onto other entities in the CBI implement risk-based supervision using
the PRISM Supervisory Framework and ● Trading Firms
form of operational or financial leasing.
Sub-Leasing is defined as the acquisition includes its approach to determining ● Regulated Market Operators
of a lease with a view to creating a sub- impact).
lease, which includes entities acting as ● Organised Trading Facility (‘OTF’) /
intermediaries in leasing transactions This Paper focuses on impact, one of the Multilateral Trading Facility (‘MTF’)
and lease in-lease out structures. key components of the CBI’s risk-based Operators
supervisory approach. In the Asset
Management, Fund Service Providers, and The CBI have stated that it may request
The Guidance Notes are available here. ? Market Infrastructure sector there were some financial service providers to refresh
previously twenty-two prudential impacts previously provided data on an ongoing
models used to rank financial service basis (quarterly) to facilitate the models.
providers according to their impact. Additionally, it has confirmed that it will write
to the financial service providers included in
the affected prudential impact models in
due course.
The full Review is available here. ?
Ireland AWM regulatory update 9
Business continuity & resiliency: the latest developments
1. Why resilience? 2. Understanding resilience? 3. What you should do now 4. Conclusion
The COVID-19 pandemic has demonstrated The first challenge on the journey towards COVID-19 has stretched contingency plans In a world of increasing complexity, economic
the interconnected, networked nature of operational resilience is deciding on its far beyond anything for which they had instability, geopolitical uncertainty and
risks which impact upon the complexity, actual meaning. Our experience has shown been planned for. In the coming weeks, pandemic what does the future hold for
range and cost of business disruptions. In a that different people in the same national restrictions will continue to be operational resilience and business continuity.
truly connected global economy, no one is organisation often have different opinions, relaxed on a phased basis while we
fully immune to disruption, as events in one usually nuanced, of what it means to them. concurrently implement our recovery plans ● There will be continued regulatory attention
part of the world have had devastating The C-suite usually interpret it to mean and assess the “new normal”. But what and supervision. Boards will be held
effects upon another. The next few months ensuring the most critical operations do not about the next crisis? What if there is a accountable.
will be extremely tough on business. Your fail but can be recovered when they do, resurgence of COVID-19 and we are faced ● Operational resilience teams will have to
resilience will be fundamental to the speed whereas risk leaders consider it to be all with another round of lock downs and proactively manage the rapidly changing
and success of your recovery. Resilience is about risk management. In fact, it is a international constraints. There are a risk landscape through better use of
a quality which paradoxically helps you combination of all the above. number of actions we should be considering available data to make near real time
survive a crisis and seize competitive now which can potentially bolster our decisions.
advantage on the other side. However, At PwC, operational resilience is the corporate immune system; ● Build and maintain customer trust. How
resilience is not an activity or a business capacity and capability to predict, prevent, you respond to an incident can differentiate
function. It is a state to be achieved manage and respond to disruption to (i) Create a dedicated recovery team you from your competition and can define
requiring action from the entire organisation. critical business. Resilience has often been your customers opinions.
considered as a business continuity and (ii) Identify return to work triggers ● Diversify the delivery model – ensure your
The same attention applied to marketing,
customer service and sales must be disaster recovery issue, but it is much wider people have the flexibility to innovate and
(iii) Revisit your strategy and risk
extended to resilience and business reaching. Resilience is predicated upon the are upskilled as necessary. Explore ways
assessment
continuity to fully protect the organisation, existence of a series of component parts in which capabilities can be augmented,
it’s processes, assets and people. that promotes a level of cohesion to reduce (iv) Review the effectiveness of your whilst retaining your skilled workforce in an
siloed working. This requires careful Crisis Management Response increasingly competitive employment
planning at multiple and varied levels market.
throughout an organisation and (v) Identify the critical processes and ● Cultivate a strong culture – incorporate
encompasses all the processes that dependencies which underpin your resilient practices into business as usual.
underpin the successful delivery of its business model Turn resilience into a natural
services or products. In effect organisational accompaniment to organisational activities
resilience is a chain of interlinked processes (vi) Make resilience an everyday as opposed to a concept associated only
as well as internal and external function with crisis.
interdependencies; and a chain is only as
strong as its weakest link! 5. How PwC can help?
If you would like to speak to PwC
in relation to any of areas raised
above please contact Eric Timon,
Senior Manager in our
Advisory Department here.
Ireland AWM regulatory update 10ESG & sustainable finance: the latest developments
Sustainable finance – a new There are three main regulations which are Investor preferences are also an important
currently being finalised - namely the consideration to any asset manager when they
era for asset managers? taxonomy, the benchmark and the review their product offering and investment
Sustainable finance and ESG disclosure regulations. Despite the strategies - as ultimately this is who they hope
(environmental, social and governance) are estimated timeline for finalisation and to sell their product to. In a survey of 750
areas which have seen accelerated growth implementation of some of these institutional investors and 10,000 retail
since the EU “Action Plan on Financing regulations not being expected to be until investors conducted globally in 2019 by PwC,
Sustainable Growth” in 2018. 2019 saw a 31 December 2022, there is realistically a ESG was the third ranked priority in
number of technical expert group (“TEG”) limited timeframe for market players to plan importance amongst investors as a group -
reports, political discussions, the passing of their implementation approach. outranking fees! Therefore, not only is the area
the Benchmark Regulations and the of sustainable finance and ESG growing
In a recent PwC publication, “Sustainable exponentially in relation to regulations and
presentation of the European Green Deal finance - a new era for asset managers”,
(to name just a few). focus in Europe, but it is also high on
we investigated the potential impact of the investors’ agenda.
So far in 2020 we have seen further expected measures on the asset
developments and consultations in the management industry (inclusive of As we move through 2020 and as the
areas of renewed sustainable finance published regulation drafts and reports regulations and underlying RTS (regulatory
strategy, taxonomy, benchmarks available as of 13 March 2020). In addition technical standards) are finalised, there is no
regulations, disclosure regulations and to the overview of the action plan in terms of doubt that there will be challenges facing the
non-financial reporting - and this is not even the main measures and timelines, we also industry. Challenges will not only be in relation
an all-encompassing listing! Given the focused on the potential impact for asset to the interpretation of the standards, but also
impact of the global COVID-19 pandemic, it managers - from the consideration of asset in relation to the timeline for implementation,
is unlikely that these developments will slow managers’ own strategic positioning; the availability of data and the disclosure
as one of the areas of focus of the product offering; governance structure; updates needed within pre-contractual
European Green Deal is on the health and business models and operations to the documents, shareholder communications,
wellbeing of citizens from environmental impact that these will have on their annual reports and websites.
related risks and impacts. distribution channels.
For more information please reach
out to Lesley Bell here.
Ireland AWM regulatory update 11Upcoming deadlines
June 2020 ● Regulation 2019/834 ('EMIR 2.1') was published
on 28 March 2019. EMIR 2.1 amends Regulation
648/2012 on Over-The-Counter ('OTC')
derivatives, central counter-parties and trade
repositories ('EMIR'), and makes a number of
changes including the EMIR reporting obligation.
Undertakings for the Collective Investment in
Transferable Securities ('UCITS') Management
Companies and Alternative Investment Fund
Managers ('AIFM's), are now legally liable and
responsible for reporting details of OTC derivative
contracts on behalf of that UCITS Management
Company or AIF.
Financial counter-parties are also similarly
accountable for reporting trades with a non-
financial counter-parties that fall below certain
EMIR clearing thresholds. These new changes
come into force on 18 June 2020.
● Common Reporting Standard (“CRS”): Certain
information held by financial institutions must be
exchanged regarding their non-resident customers.
Under the returns of Certain Financial Information
by Reporting Financial Institutions Regulations
2015, financial institutions are required to report
CRS information by 30 June 2020 to the Revenue
Commissioners.
Ireland AWM regulatory update 12PwC Asset & Wealth Management credentials
Financial Statements Audit Regulatory Advisory Services
As a firm we are proud of the depth and breadth of insights and access to
Trust is an important factor in gaining and Regulatory change has imposed significant
networks we can bring to our clients. In Ireland and internationally, we have
sustaining the confidence of your additional requirements and costs on all
an unrivalled client base that allows us to identify and share developing trends
stakeholders. fund managers. Our suite of services
and issues.
includes:
Using our experience and proven track
record we can provide the smooth and ● Advice on regulatory obligations
A dedicated Asset & Wealth Management team with unrivalled experience.
efficient audit needed to give comfort to you
It is our people, our experience and our passion to contribute to your success and your stakeholders. ● Assurance on regulatory reporting
that makes us the right team for you. Our Asset & Wealth Management group systems and controls
is the largest in Ireland with nearly 400 investment professionals and staff.
● Assistance with Central Bank of Ireland
Tax Advice regulatory authorisations
Building on our track record of delivering alternative thinking. We use
our knowledge to both shape and drive regulation and help our clients, not just We have a dedicated group of tax ● Regulatory remediation support
in implementing new standards and requirements, but to prepare for future professionals, focused on international and
local tax issues facing fund managers. We
requirements and to ensure that products are properly designed.
have a wealth of resources and expertise to
Operations Effectiveness
assist you in addressing the various tax
challenges such as: Asset management companies face people,
process and cost challenges similar to
● Corporate tax advice
many other financial services companies.
● Financial transactions taxes Our suite of services to help firms to
overcome these challenges includes:
● Transfer pricing
● Process intelligence
● International tax consulting services
● Drafting or updating process maps and
● Global tax compliance services procedures manuals
● VAT services ● Pre/Post acquisition/disposal services
● Client Assets/Investor Money advice
● Outsourcing/off shoring advice and
reviews
Ireland AWM regulatory update 13PwC Asset & Wealth Management credentials
Digital, Data, Technology and Governance Internal Audit Services Independent Valuation Services
Cyber Services
Boards of Directors often need support to Directors and senior management of fund We have the know-how, experience and
Asset management entities are faced with adapt to the fast pace of change within the management companies need to network to select and use the right valuation
digital, technological, information security industry. In addition, they will often seek an understand the organisation’s objectives, approach and judgements.
and data issues similar to many other additional layer of comfort over the risk management priorities, regulatory
financial services companies, while they companies they are over-seeing. Our suite environment and critical stakeholders’ We can help you assess, design and
also seek to simplify business models and of services includes: needs to maximise the value and implement best in class valuation operating
improve efficiency. PwC can assist by effectiveness of the internal audit function. models and governance structures.
improving existing technology and helping ● Corporate governance reviews We can help by:
We can assist in the establishment of a
with new solutions, while keeping your
● Assistance with Compliance or Risk ● Developing and assessing whether your Valuation Committee, advising as to its
systems secure. Our suite of services
Management Frameworks internal audit and risk management composition, mandate and accountabilities,
includes:
methodologies are delivering as specifying a reporting and monitoring plan.
● Reviewing approaches to Organisation
● Digital strategy and system selection effectively as possible to stakeholders.
Effectiveness
support
● Solving your resourcing problems
● Tailored director training Strategy and Distribution Advice
● System implementation including full outsourcing or
complementing your team with specialist At its core Strategy is about helping clients
● Cyber security services skills or geographical coverage. to make choices - which market they want
● Project management of IT/Digital projects ● Developing training solutions unique to to play in, what products/services they need
your business using our extensive to win with and what capabilities they
market and industry knowledge. should leverage.
The strategy team undertake corporate
plans, feasibility studies, commercial due
diligence and market research.
Ireland AWM regulatory update 14Our team
Ken Owens Lesley Bell Geraldine Brehony
Partner Director Senior Manager
Asset & Wealth Management Advisory Asset & Wealth Management Advisory Asset & Wealth Management Advisory
T: +353 1 792 8542 T: +353 1 792 8133 T: +353 1 792 8037
ken.owens@pwc.com lesley.bell@pwc.com geraldine.brehony@pwc.com
Louise Treacy Michelle Forkan Tara Doogan
Senior Manager Manager Manager
Asset & Wealth Management Advisory Asset & Wealth Management Advisory Asset & Wealth Management Advisory
T: +353 1 792 8086 T: +353 1 792 8811 T: +353 1 792 6682
louise.m.treacy@pwc.com michelle.forkan@pwc.com tara.doogan@pwc.com
Kenneth O’Donnell Philip Cullen
Manager Associate
Asset & Wealth Management Advisory Asset & Wealth Management Advisory
T: +353 1 792 6224 T: +353 1 792 5866
kennethodonnell@pwc.com cullen.philip@pwc.com
Ireland AWM regulatory update 15At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with over 276,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.ie. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2020 PwC. All rights reserved.
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