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S.I. No. 302/2022 - European Union (

vestment Firms) (Amendment) Regulations 2022 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory

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strumentsIonstraimí Reachtúla 2022 S.I. No. 302/2022 - European Union (

vestment Firms) (Amendment) Regulations 2022 S.I. No. 302/2022 - European Union (

vestment Firms) (Amendment) Regulations 2022 AmendmentsLeasuithe Download PDF Íoslódáil PDF Notice of the making of this Statutory

strument was published

“Iris Oifigiúil” of 1st July, 2022. I, PASCHAL DONOHOE, Minister for Finance,

exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving further effect to Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 20191 , hereby make the following regulations: PART 1 PRELIMINARY AND GENERAL Citation 1. These Regulations may be cited as the European Union (

vestment Firms) (Amendment) Regulations 2022.

terpretation 2.

these Regulations, “Act of 1971” means the Central Bank Act 1971 (No. 24 of 1971). PART 2 AMENDMENT OF ACT OF 1971 Amendment of section 2 of Act of 1971 3. Section 2 of the Act of 1971 is amended by the

sertion of the following definitions: “ ‘Markets

Financial

struments Directive’ means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 20142 , as amended by— (

1. a)Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 20143 , (
2. b)Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 20164 , (
3. c)Directive (EU) 2016/1034 of the European Parliament and of the Council of 23 June 20165 , (
4. d)Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 20196 , (
5. e)Regulation (EU) 2019/2115 of the European Parliament and of the Council of 27 November 20197 , (
6. f)Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 20199 , (
7. g)Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 20209 , and (
8. h)Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 202110 ; ‘Regulations of 2017’ means the European Union (Markets

Financial

struments) Regulations 2017 ( S.I. No. 375 of 2017 );”. Authorisation and supervision of Class 1 firms 4. The Act of 1971 is amended by the

sertion of the following Part after Part II: “Part IIA Authorisation and Supervision of Class 1 Firms

terpretations/Definitions (Class 1 firms) 31A.

this Part— ‘ancillary services’ has the same meaning as it has

the Markets

Financial

struments Directive; ‘associated company’,

relation to the holder of a Class 1 authorisation, means a company

respect of which— (

1. a)not less than 20 per cent of the nominal value of the company’s equity share capital is held by the company, or (
2. b)not less than 20 per cent of shares carrying voting rights (other than voting rights that arise only

particular circumstances) are so held; ‘Class 1 authorisation’ means an authorisation granted under the SSM Regulation on the application therefor under section 31C; ‘Class 1 business’ means business consisting of carrying out an activity referred to

paragraph 3 or 6 of Part 1 of Schedule 1 to the Regulations of 2017; ‘Class 1 firm’ means an undertaking (other than a commodity and emission allowance dealer, a collective

vestment undertaking or an

surance undertaking) which satisfies point (b)(i), (ii) or (iii) of the definition of ‘credit

stitution’

Article 4

vestment undertaking’ has the same meaning as it has

the Capital Requirements Regulation; ‘client’ means a person to whom a Class 1 firm, whose Class 1 authorisation has been withdrawn, provided all or any of the following prior to such withdrawal: (a)

vestment services and activities; (

1. b)ancillary services; (
2. c)Class 1 business; ‘commodity and emission allowance dealer’ has the same meaning as it has

the Capital Requirements Regulation; ‘credit

stitution’ has the same meaning as it has

the Capital Requirements Regulation; ‘

vestment services and activities’ has the same meaning as it has

the Markets

Financial

struments Directive; ‘

surance undertaking’ has the same meaning as it has

the Capital Requirements Regulation; ‘related body’,

relation to the holder of a Class 1 authorisation, means— (

1. a)a subsidiary company of that holder, (
2. b)if that holder is itself a subsidiary— (
3. i)its holding company, or (
4. ii)any other subsidiary of its holding company, (
5. c)an associated company of that holder, or (
6. d)a partnership

which that holder has an

terest, and whose business is or, at any relevant time, was

the Bank’s opinion materially relevant to an

spection being carried out, or proposed to be carried out, under Part 3 of the Central Bank (Supervision and Enforcement) Act 2013 . Requirement for a Class 1 authorisation (Class 1 firms) 31B.

the State, unless it is the holder of a Class 1 authorisation or a licence.

such form and contain such particulars as the Bank may from time to time determine.

sections 31D to 31G have been complied with, take a draft decision to propose to the ECB to grant to the applicant an authorisation to carry on Class 1 business, or (b) where it is not so satisfied, reject the application.

respect of any losses

curred through the

solvency or default of a person to whom a Class 1 authorisation is granted. Programme of operations and structural organisation (Class 1 firms) 31D.

Regulation 61

subsection

Regulation 61 of the European Union (Capital Requirements) Regulations 2014 proposed to be implemented by the applicant would, if implemented, enable sound and effective risk management by the applicant.

itial Capital (Class 1 firms) 31E.

itial capital, of at least €5,000,000.

itial capital shall comprise only one or more of the items referred to

Article 26(1)(a) to (e) of the Capital Requirements Regulation.

itial capital of which is less than €5,000,000, subject to the applicant having an

itial capital of at least €1,000,000. Effective direction of business and place of head office (Class 1 firms) 31F. The Bank shall not take a draft decision to propose to the ECB to grant a Class 1 authorisation unless the applicant satisfies the Bank that— (a) it is a body corporate, (b) its registered office and its head office are both located

the State, (

1. c)at least 2 persons effectively direct its business, and (
2. d)the members of its management body meet the requirements of Regulation 79 of the European Union (Capital Requirements) Regulations 2014. Shareholders and members (Class 1 firms) 31G.

cludes the names of— (

1. a)the applicant’s shareholders or members that have qualifying holdings and of the amounts of those holdings, or (
2. b)where there are no qualifying holdings, the 20 largest shareholders or members.

determining whether the criteria for a qualifying holding are fulfilled, the voting rights referred to

Articles 9 and 10 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 200411

relation to

formation about issuers whose securities are admitted to trading on a regulated market and the conditions regarding aggregation thereof set out

Article 12

to account.

stitutions hold as a result of providing the underwriting of financial

struments or placing of financial

struments on a firm commitment basis

cluded under point 6 of Section A of Annex I to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 201412 shall not be taken

to account, provided that those rights are not exercised or otherwise used to

tervene

the management of the issuer and are disposed of within one year of acquisition.

to account the need to ensure the sound and prudent management of a Class 1 firm, it is not satisfied, having regard to the criteria specified

section 31H

volved

the enforcement of those laws, regulations or administrative provisions, prevent the effective exercise of its supervisory functions.

formation they require to monitor compliance with the conditions referred to

subsections

section 31G

Regulation 79 of the European Union (Capital Requirements) Regulations 2014, of any member of the management body who will direct the business of the shareholders or members of the applicant; (c) the financial soundness of the applicant,

particular

relation to the type of business pursued and envisaged by the credit

stitution; (d) whether the applicant will be able to comply and continue to comply with the prudential requirements of the European Union (Capital Requirements) Regulations 2014 and the Capital Requirements Regulation, and where applicable, other European Union law,

particular Directive 2002/87/EC of the European Parliament and of the Council of 16 December 200213 and Directive 2009/110/EC of the European Parliament and of the Council of 16 September 200914 ,

cluding, where applicable, whether the group of which it is a part has a structure that makes it possible to exercise effective supervision, effectively exchange

formation among the competent authorities of relevant Member States and determine the allocation of responsibilities among the competent authorities of relevant Member States; (e) whether there are reasonable grounds to suspect that,

connection with the proposed authorisation, money laundering or terrorist financing within the meaning of Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of 26 October 200515 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing is being or has been committed or attempted, or that the proposed authorisation could

crease the risk thereof.

carrying out its assessment of the suitability of the shareholders or members, the Bank shall consult with the competent authorities of other relevant Member States if one or more of the shareholders or members is— (a) a credit

stitution,

surance undertaking, reinsurance undertaking,

vestment firm, or a management company within the meaning of Article 2

this subsection referred to as a ‘UCITS management company’) authorised

another Member State, (b) the parent undertaking of a credit

stitution,

surance undertaking, reinsurance undertaking,

vestment firm or UCITS management company authorised

another Member State, or (c) a natural or legal person controlling a credit

stitution,

surance undertaking, reinsurance undertaking,

vestment firm or UCITS management company authorised

another Member State.

other Member States with any

formation that is essential or relevant for the assessment of the shareholders or members.

formation upon request and all essential

formation on its own

itiative.

dicate any views or reservations expressed by the competent authorities responsible for the shareholder or member concerned.

this section, ‘reinsurance undertaking’ has the meaning assigned to it

point

stitutions permanently affiliated to central body (Class 1 firms) 31I.

sections 31D, 31E and 31F(

1. c)and (
2. d)with regard to a credit

stitution referred to

Article 10

of the Capital Requirements Regulation

accordance with the conditions set out therein.

paragraph

stitutions. Refusal of authorisation (Class 1 firms) 31J.

complete, within 6 months of receipt of the complete

formation required for the decision.

any event, take a draft decision to propose to the ECB to grant a Class 1 authorisation or reject the application within 12 months of the receipt of the application.

complete, within 6 months of receipt of the complete

formation required,

accordance with subsection

section 31H

formation provided by the applicant is

complete.

terms of the economic needs of the market. Prior consultation of competent authorities (Class 1 firms) 31K.

stitution authorised

that other Member State, (b) a subsidiary of the parent undertaking of a credit

stitution authorised

that other Member State, or (c) controlled by the same natural or legal persons as those who control a credit

stitution authorised

that other Member State.

surance undertakings or

vestment firms

the Member State concerned where the credit

stitution is— (a) a subsidiary of an

surance undertaking or

vestment firm authorised

the European Union, (b) a subsidiary of the parent undertaking of an

surance undertaking or

vestment firm authorised

the European Union, or (c) controlled by the same natural or legal persons as those who control an

surance undertaking or

vestment firm authorised

the European Union.

particular— (a) consult,

accordance with subsections

volved

the management of another entity of the same group, and (b) exchange with the competent authorities of other Member States any

formation regarding the suitability of shareholders and the reputation and experience of members of the management body which is of relevance for the granting of an authorisation and for the ongoing assessment of compliance with operating conditions. Conditions of authorisation (Class 1 firms) 31L.

relation to a Class 1 authorisation from time to time if

the opinion of the Bank the amendment, revocation, addition or imposition is calculated to promote the orderly and proper regulation of credit

stitutions.

writing the person who holds the Class 1 authorisation or to whom the Class 1 authorisation is

tended to be granted that it proposes to amend or add to the conditions of the Class 1 authorisation, and of its reasons for so proposing and that the person may, within twenty-one days after the date of the giving of the notification, make representations

writing to the Bank

relation to the proposed amendment or addition, as the case may be, and shall specify

the notification, the amendment or addition, as the case may be, (

1. b)the person may make such representations to the Bank within the time aforesaid, and (
2. c)the Bank shall, before deciding to propose to the ECB to amend or add to the conditions of the Class 1 authorisation, as the case may be, consider any representations duly made to it under this subsection

relation to the proposed amendment or addition, as the case may be, and where, after so considering, the Bank decides to propose an amendment or addition, as the case may be, that differs from that specified

the notification concerned, it shall not be necessary to give a new notification under this subsection if the difference results

the condition concerned being no more onerous than would be the case had the Bank decided to propose to the ECB to amend or add to the conditions of the Class 1 authorisation, as the case may be,

accordance with the notification concerned. Revocation of authorisation (Class 1 firms) 31M.

the State, which is being duly wound up or otherwise dissolved, (

1. iv)has obtained the authorisation through false statements or any other irregular means, (
2. v)becomes unable to meet its obligations to its creditors or suspends payments lawfully due by it or no longer possesses sufficient own funds (being own funds to which the Capital Requirements Directive relates) or can no longer be relied upon to fulfil their obligations towards their creditors, and

particular no longer provides security for the assets entrusted to them, (vi) is convicted on

dictment of an offence under any provision of this Act or an offence

volving fraud, dishonesty or breach of trust, (vii) no longer fulfils the conditions under which the Class 1 authorisation was granted, (viii) no longer meets the prudential requirements— (I) set out

Parts Three (other than Articles 92a and 92b), Four or Six of the Capital Requirements Regulation, or (II) imposed under Regulation 92

particular, no longer provides security for the assets entrusted to it by its depositors, (ix) commits one of the breaches referred to

Regulation 55 of the European Union (Capital Requirements) Regulations 2014, or (x) uses its licence exclusively to engage

the activities referred to

point

that Article, (

1. c)submit a proposal to the ECB to withdraw a Class 1 authorisation if the business of, or the corporate structure of, the holder of the authorisation has been so organised or the holder of the authorisation has come under the control of any other undertaking not supervised by the Bank, such that the holder is no longer capable of being supervised to the satisfaction of the Bank, or (
2. d)submit a proposal to the ECB to withdraw a Class 1 authorisation if, since the grant of the authorisation, the circumstances relevant to the grant have changed and are such that, if an application for the authorisation were made

the changed circumstances, it would be refused.

circumstances to which paragraph (a) of subsection

writing of the reasons for the withdrawal and that the holder may, within twenty-one days after the date of the giving of the notification, make representations

writing to the Bank

relation to the proposed withdrawal, (b) the holder may make such representations

writing to the Bank within the time aforesaid, and (c) the Bank shall consider any representations duly made to it under this subsection

relation to the proposed withdrawal.

full and without undue delay his liabilities

respect of those clients, and (b)

the case where— (i) that person has notified the Bank

accordance with paragraph (

1. a)of this subsection and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, (
2. ii)that person has not so notified the Bank and the Bank is of the opinion that he has failed to so notify as soon as possible after the authorisation is withdrawn by the ECB, or (iii) the Bank is of the opinion that that person has not taken all reasonable steps to so notify every client concerned, then the Bank may give a direction

writing to that person for such period, not exceeding six months, as may be specified therein, prohibiting him from— (I) dealing with or disposing of any of his assets or specified assets

any manner, (II) engaging

any transaction or class of transaction or specified transaction, or (III) making payments, without the prior authorisation of the Bank, and the Bank may require that person to prepare and submit to it for its approval within two months of the direction, a scheme for the orderly discharge

full of his liabilities to the clients concerned.

addition to his duties and obligations

respect of the winding up, be subject to the duties and obligations to which the company would be subject were it a company to which subsection

the circumstances, remove

writing the duty and obligation imposed on the liquidator concerned to comply with paragraph (b) (as construed by this subsection) of subsection

writing on that liquidator such further or other duty and obligation which corresponds to that set out

the said paragraph (b).

another Member State, or (b) carries on Class 1 business through a branch established

another such state, the Bank shall, before deciding to submit a proposal to the ECB to withdraw a Class 1 authorisation, consult with the authority

that state that exercises

that state functions corresponding to those of the Bank under this Part, provided however that if immediate action by the Bank is called for it shall not be necessary for the Bank to consult as aforesaid but

such a case the Bank shall notify the authority concerned of the withdrawal of the Class 1 authorisation.

this section— (

1. a)an undertaking shall be treated as a fellow subsidiary of another undertaking if both are subsidiaries of the same undertaking but neither is a subsidiary of the other undertaking, (
2. b)‘subsidiary undertaking’— (i)

relation to an undertaking

corporated

, or formed under the law of the State has the same meaning as it has

Part 6

38 of 2014), and (ii)

relation to an undertaking

corporated

, or formed under the law of another, Member State, means any undertaking which is a subsidiary undertaking within the meaning of any rule or law

force

that State for the purposes of giving effect to Directive 2013/34/EU of the European Parliament and of the Council of 26 June 201317 , (c) ‘control’ has the same meaning as it has

the European Union (Capital Requirements) Regulations 2014, and (d) ‘associated undertaking’ has the same meaning it has

paragraph 22 of Schedule 4 or Schedule 4A of the Companies Act 2014 , as applicable. Publication of names of holders of authorisations and notices of revocation of authorisations (Class 1 firms) 31N.

such manner as it thinks fit, the names of the holders of Class 1 authorisations.

such manner as it thinks fit.

formed of the names of the holders of Class 1 authorisation: (

1. a)the Registrar of the Supreme Court; (
2. b)the officer for the time being managing the Central Office of the High Court; (
3. c)every County Registrar; (
4. d)every District Court Clerk; (
5. e)the European Banking Committee; (
6. f)the European Banking Authority; (
7. g)the European Markets and Securities Authority; (
8. h)the Minister. Holders of Class 1 authorisations to keep certain records 31O.

writing of the address of the office or offices where those records are kept.

subsection

writing to that holder.

a non-legible form so long as they are capable of being reproduced

a legible form. Holders of Class 1 authorisations and others to provide Bank with required

formation and returns 31P.

formation and returns concerning the relevant business carried on by the holder as the Bank specifies from time to time.

formation or return (not being

formation or a return specified under subsection

writing concerning the relevant business carried on by the holder.

formation or a return for the purposes of this section only if it considers it necessary to have that

formation or return for the proper performance of the functions imposed, or the proper exercise of the powers conferred, on it by law.

formation or a return that the person knows to be false or misleading

a material respect.

so far as the

formation and returns sought by the Bank are,

its opinion, materially relevant to the proper appraisal of the business of the holder of the Class 1 authorisation concerned.

this section— ‘

formation and returns’ and ‘

formation or return’

clude audited accounts and audited group accounts, and any other documents that are equivalent or correspond to audited accounts or audited group accounts; ‘relevant business’ means the business to which the Class 1 authorisation concerned relates. Publication of business statements by holders of Class 1 authorisations 31Q. A holder of a Class 1 authorisation shall publish statements

respect of the business to which the authorisation relates

such form and manner and at such times as may be specified by the Bank from time to time for the purpose of the performance of its statutory functions.”. PART 3 CONSEQUENTIAL AMENDMENTS Amendment of European Union (Capital Requirements) Regulations 2014 5. The European Union (Capital Requirements) Regulations 2014 are amended— (a)

Regulation 9I

Regulation 24

stitution concerned under— (i) section 21 of the Act of 1971, as modified

accordance with paragraph

sertion of the following paragraphs after paragraph

that section to ‘holder of a licence’ or ‘holder’ shall be read as a reference to a credit

stitution, and (b) a reference

that section to ‘banking business’ or ‘banking’ shall be read— (i)

the case of a non-Class 1 firm, as a reference to the taking of deposits or granting of credit by the non-Class 1 firm, and (ii)

the case of a Class 1 firm, as a reference to business consisting of carrying out an activity referred to

paragraph 3 or 6 of Part 1 of Schedule 1 to the European Union (Markets

Financial

struments) Regulations 2017.

paragraph

vestment undertaking or an

surance undertaking) which satisfies point (b)(i), (ii) or (iii) of the definition of ‘credit

stitution’

Article 4

stitution’

Article 4(1) of the Capital Requirements Regulation.”.

GIVEN under my Official Seal, 27 June, 2022. PASCHAL DONOHOE, Minister for Finance. EXPLANATORY NOTE (This note is not part of the

strument and does not purport to be a legal

terpretation) These Regulations amend the Central Bank Act 1971 (No. 24 of 1971) to provide for the prohibition of certain

vestment services and activities (‘Class 1 business’)

the State by certain

vestment firms (Class 1 firms) operating without the requisite permission (‘Class 1 authorisation’ or banking licence), the application process for a Class 1 authorisation and the associated conditions of authorisation and sets out the process and grounds for the withdrawal of a Class 1 authorisation. 1 OJ No. L. 314, 5.12.2019, p.

1. 2 OJ No. L. 173, 12.6.2014, p.
2. 3 OJ No. L. 257, 28.8.2014, p.
3. 4 OJ No. L. 26, 2.2.2016, p.
4. 5 OJ No. L. 175, 30.6.2016, p.
5. 6 OJ No. L. 314, 5.12.2019, p.
6. 7 OJ No. L. 320, 11.12.2019, p.
7. 8 OJ No. L. 334, 27.12.2019, p.
8. 9 OJ No. L. 347, 20.10.2020, p.
9. 10 OJ No. L. 68, 26.2.2021, p.
10. 11 OJ No. L. 390, 31.12.2004, p.
11. 12 OJ No. L. 173, 12.6.2014, p.
12. 13 OJ No. L. 35, 11.2.2003, p.
13. 14 OJ No. L. 267, 10.10.2009, p.
14. 15 OJ No. L. 309, 25.11.2005, p.
15. 16 OJ No. L. 302, 17.11.2009, p.
16. 17 OJ No. L. 182, 29.6.2013, p.
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