Central Bank of Ireland publishes Markets Update No 5 of 2024

On 3 May 2024, the Central Bank of Ireland (the Central Bank) published Issue No 5 2024 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 the following two items:

Central Bank macroprudential measures for Irish-authorised GBP-denominated LDI funds

On 29 April 2024, the Central Bank announced it was introducing macroprudential measures for Irish-authorised GBP-denominated Liability Driven Investment (LDI) funds, as an 'other restriction' under Article 25 of AIFMD. 

Building on proposals set out in CP 157 (November 2023), the measures require that Irish authorised GBP-denominated LDI funds maintain sufficient resilience to a minimum of 300 bps increase in UK yields.

• For funds in existence on 29 April 2024, the Central Bank is allowing a three-month implementation period.

• GBP-denominated LDI funds authorised after the 29 April 2024 are expected to adhere to the yield buffer limit from inception.

• The measure is not limited in duration.

The measure is being codified in coordination with the CSSF, with whom the Central Bank of Ireland have undertaken an aligned consultation process. It is supported by advice to the Central Bank from ESMA. Equivalent advice was issued at the same time to the CSSF.

ESMA's advice follows notification from the Central Bank and the CCSF and concludes that the measures proposed meet the conditions for taking action under the AIFMD, are justified and should contribute to improving the resilience EU GBP LDI.

Central Bank Notice of intention on the application of ESMA Guidelines on MMF Regulation stress test scenarios

On 2 May 2024, the Central Bank published a Notice of intention in respect of ESMA's "Guidelines on stress test scenarios under the MMF Regulation", published on 6 March 2024

The Notice states that the Central Bank expects firms to comply in full with the ESMA Guidelines from 6 May 2024. 

The Central Bank will also consult, 'in due course', on a provision in its UCITS Regulations and AIF Rulebook requiring all MMF managers to adhere to the Guidelines.