Registration of Schedule 2 Firms
The Act which transposes AMLD4 into Irish law obliges certain unregulated entities to register with the Central Bank of Ireland for anti-money laundering purposes.
Background
In Ireland, the law on anti-money laundering (AML) and the countering of terrorist financing (CTF) is set out in the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended by Part 2 of the Criminal Justice Act 2013 and, more recently, the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 (the 2018 Act).
The purpose of the 2018 Act is to transpose the provisions of the AMLD4 into Irish law (although the provisions of Article 30 of the AMLD4 on beneficial ownership of corporate entities have been transposed by a separate statutory instrument). The 2018 Act entered into force on 26 November 2018.
Registration of Unregulated Firms
Among the requirements of the 2018 Act is one which obliges unregulated firms to register with the Central Bank of Ireland for AML purposes. The Central Bank refers to these firms as Schedule 2 Firms.
In short, any firm which carries out one or more of the Schedule 2 Activities (which are derived from the EU’s list of banking services and which are set out in full at the end of this article) will be required to register via the form below:
| Link to form | Schedule 2 Registration Form |
| Email address | Schedule2@centralbank.ie |
Once registered, a firm has an ongoing obligation to inform the Central Bank of any changes to the information submitted.
Exemptions
Firstly, the obligation to register as a Schedule 2 Firm does not apply to any entity that is already authorised or licensed by the Central Bank. In addition, there are two exemptions which apply to firms which would otherwise be in scope of the requirement to register as a Schedule 2 Firm:
- Where the firm carries out only activity 6 (trading for own account or for account of customers) and the firm’s customers are members of the same group as the firm.
- Where the firm’s annual turnover and its Schedule 2 activities are below a certain threshold.
The Registration Form
The form is divided into four sections, and ends with a declaration to be made on behalf of the relevant firm:
| Section 1. Contact Details | The basic details of the firm, and of its legal advisors if they will be corresponding with the Central Bank on the firm’s behalf. |
| Section 2. Applicant Details | The details of the Schedule 2 activities carried out by the firm, including the (approximate) number and type of customers involved. |
| Section 3. Group Undertakings | Details of the firm’s parent and/or subsidiary holdings. |
| Section 4. Reporting to the Central Bank |
Section 4 is only to be completed by special purpose entities (SPEs), which, for the purpose of the registration form, are legal entities with: “little or no physical presence and narrow, specific and/or ring-fenced objectives, such as the segregation of risks, assets and/or liabilities, or as a cash conduit.” SPEs are required to answer the following questions:
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Comment
We understand that the majority of SPEs and other unregulated financial institutions are registering with the Central Bank as Schedule 2 Firms. It remains to be seen how the requirement for an SPE to register will interact with the recent amendments to the Irish credit servicing regime.
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Schedule 2 Activities |
| 1. Lending including, amongst other things, consumer credit, credit agreements relating to immovable property, factoring, with or without recourse, financing of commercial transactions (including forfeiting). |
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2. Financial leasing. |
| 3. Payment services as defined in Article 4(3) of Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 (the PSD2). |
| 4. Issuing and administering other means of payment (e.g. travellers' cheques and bankers' drafts) insofar as such activity is not covered by point 3. |
| 5. Guarantees and commitments. |
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6. Trading for own account or for account of customers in any of the following:
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| 7. Participation in securities issues and the provision of services relating to such issues. |
| 8. Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings. |
| 9. Money broking. |
| 10. Portfolio management and advice. |
| 11. Safekeeping and administration of securities. |
| 12. Safe custody services. |
| 13. Issuing electronic money. |
