Central Bank of Ireland publishes Markets Update No 4 of 2023

On 24 March 2023, the Central Bank of Ireland (the Central Bank) published Issue No 4 2023 of its regular Markets Update, in which it sets out alerts of interest to Irish regulated firms and other market participants.

For our summaries of the previous issues, please see the right-hand column of this page.

The new Update contains a number of items, including the following:

Central Bank publications

Central Bank notice of intention in relation to ESMA Guidelines on stress test scenarios under the Money Market Fund (MMF) Regulation

ESMA's Guidelines on stress test scenarios under the MMF Regulation (the Guidelines) were published on 27 January 2023 and came into effect two months later (ie 27 March 2023).

On 24 March 2023, the Central Bank published a notice of intention, confirming both that the Central Bank expects full compliance with the Guidelines from 27 March 2023 and that it will, in due course, consult on incorporating in its UCITS Regulations and AIF Rulebook a provision that all managers of MMFs adhere to the Guidelines.

Updated Central Bank guidance in relation to PRIIPs KIDs

On 24 March 2023, the Central Bank updated its guidance on the filing and submission requirements for PRIIPs KIDs for UCITS, clarifying the process for filing PRIIPs KIDs for:

(a) UCITS which were authorised before 1 January 2023.

For the time being, UCITS authorised prior to 1 January 2023 which must now produce a PRIIPs KID do not need to file the KID with the Central Bank.

The Central Bank will issue further guidance confirming filing requirements in due course.

The submission for new sub-funds should be made through ORION on authorisation day with the other authorisation documents.

(b) UCITS which seek authorisation after 1 January 2023

Where a new UCITS umbrella or sub fund is applying for authorisation after 1 January 2023 and must produce a PRIIPs KID, the KID should be submitted to the Central Bank.

The submission for new umbrellas should be made by email on authorisation day with the other authorisation documents to: fundsauthorisation@centralbank.ie.

Central Bank publishes 38th edition of its UCITS Q&As

On 24 March 2023, the Central Bank published the 38th editionof its UCITS Q&A, making amendments in relation to filing requirements under the PRIIPs Regulation.

The update amends two Q&As (ID 1107 and 1109) and deletes one (ID 1108).

Q&As ID 1107 and 1109 set out the same information as the Central Bank's PRIIPs KID guidance referred to immediately above, though ID 1107 also notes that, where a UCITS is applying for authorisation of a new UCITS umbrella or sub-fund after 1 January 2023, the PRIIPs KID must be accompanied by a written declaration setting out that

• the KID complies with the PRIIPs Regulation; and
• the information in the KID does not conflict with the content of the prospectus.

In addition, two new Q&As (ID 1110 and 1111) are included. These relate to filing requirements for  PRIIPs KIDs where the UCITS intends to market to

• professional investors only (ID 1110); and
• retail investors in Ireland (ID 1111).

Central Bank's Dear CEO Letter on ESMA's Common Supervisory Action on Costs and Fees

On 24 March 2023, the Central Bank published a Dear DEO letter (the Letter), in which it set out the findings from ESMA's Common Supervisory Action (CSA) conducted during the course of 2021 into compliance by UCITS Managers with the provisions on costs and fees in the UCITS framework.

The Letter also contained the Central Bank's findings and expectations in relation to six key areas where firms were found wanting.

Our summary of the Letter can be found here.

Changes to the Fitness & Probity application process - March 2023

The Central Bank has announced that it is enhancing its Portal to facilitate the submission of applications to become a holder of a Pre-Approval Controlled function, with Individual Questionnaires being submitted via the Central Bank Portal rather than via the Online Reporting System (ONR).

The changes are due to go live on Monday 24 April 2023.

An overview of the changes to the system can be found here and further details on the new system will be communicated shortly.

The Central Bank advises those who are not already Portal users to register now. Guidance on how to do so can be found here.

ESMA publications

ESMA publishes annual transparency calculations for equity and equity-like instruments

On 1 March 2023, EMSA published the results of its annual transparency calculations for equity and equity-like instruments. These will apply from 1 April 2023 to 31 March 2024.

The annual transparency calculations are based on the data provided to Financial Instruments Transparency System (FITRS) by trading venues in relation to the calendar year 2022.

The full list of assessed equity and equity-like instruments are available through ESMA's FITRS in the XML files (here) and through the Register web interface (see here).

ECB and the ESAs call for enhanced climate-related disclosure for structured finance products

On 13 March 2023, the European Supervisory Authorities (ESAs) and European Central Bank (ECB) published a Joint Statement on climate-related disclosure for structured finance products.

The Statement:

• notes that there is currently a lack of climate-related data on the assets underlying structured finance products, which poses an obstacle for the classification of products and services under the EU Taxonomy Regulation and SFDR; and
• encourages the development of disclosure standards for securitised assets through harmonised climate-related data requirements.