UK Prime Minister Theresa May called a snap general election, claiming that she needed a united country behind her for forthcoming Brexit negotiations; the UK will go to the polls on 8th June. Meanwhile first round voting in France’s election produced a run-off between Marine Le Pen and Emmanuel Macron, with Macron taking the most votes. The European Union acknowledged that it would recognise Northern Ireland’s right to membership if Ireland reunified post-Brexit. EU leaders confirmed their Brexit negotiation strategy, which firmly states that there will be no future trade talks until exit terms are agreed. President Trump completed 100 days in office to generally poor reviews on his delivery to date; a federal government shut-down was narrowly avoided when the opposing parties agreed to the federal budget for the next six months. Here are the main stories in finance and regulation from the last two weeks.


The Charities Regulator published its review of the use of charitable causes in tax-efficient finance deals. The regulator identified charities which were used in the creation of Section 110 securitisation structures, and questioned whether they could be said to meet the definition of a charity, which is an entity established solely for charitable purposes. Such charities are often used to hold shares of a Section 110 company, and potentially benefit from any excess funds left in the structure once all creditors have been paid. However, the regulator concluded that “the holding of shares in itself should not be the motivation and reason for a charity’s existence.”

The Department of Finance published a report on ‘Ireland and its Banks – an Update’, looking at the recovery of Ireland’s banks, the wider economy and the recovery of €29 billion which the State invested in saving its banks during the financial crisis. It also references policy issues on social housing, coping with Brexit and changes to the global tax environment. The Department also published a consultation paper on the ‘Regulation of Crowdfunding’, seeking views on whether a regulatory regime should be applied for the protection of investors. Responses are requested for 2nd June 2017.

The Central Bank reached a Settlement Agreement with Allied Irish Banks, p.l.c. in respect of anti-money laundering and terrorist financing controls. The bank was fined €2,275,000 and reprimanded for 6 breaches of the Criminal Justice Act 2010, including the failure to report suspicious transactions and to conduct due diligence on 573,000 pre-1995 customers. The settlement followed a review by the Central Bank which began in 2013. AIB’s Trade Finance Department was found to be particularly non-compliant with regulations.

The Central Bank published its outcome of the thematic review on ‘Outsourcing in credit unions’. The report emphasises that whilst outsourcing is a valuable tool, responsibility for the outsourced activity lies with the credit union board, who are responsible for the robustness of the selection of the service provider, reporting, oversight and performance review. Issues highlighted include inconsistent or non-existent board oversight of outsourcing, informal appointments of service providers and a lack of proper service level agreements. Director of Credit Institutions Supervision at the Central Bank Ed Sibley also spoke to the Irish League of Credit Unions on the critical importance of a business model, and regulatory engagement and requirements.


The European Commission published an update of delayed implementation of EU regulations by member states. In financial services, the Commission referred Cyprus, Spain, Portugal and Croatia to the European Court of Justice for failing to fully implement rules on mortgage credit. Meanwhile, the Commission also referred Ireland to the European Court of Justice over its failure to transpose the Accounting Directive into national law. Belgium was requested to apply EU rules for whistleblowers and Cyprus, Spain, Croatia, Luxembourg, the Netherlands and Portugal were urged to implement EU rules on payment accounts.

The Joint Committee of the European Supervisory Authorities set out the main risks facing the financial system. The risks identified include low profitability of financial institutions, which are currently experiencing high levels of non-performing loans, litigation costs and overcapacity. Also identified was interconnectedness within the financial sector in relation to asset pricing and direct financial exposure posed a further systemic risk. Finally cyber and technology risks were exacerbated by rapid change in the sector which had to be managed by ageing IT systems, exacerbated by the costs of upgrading.

   United Kingdom

The Financial Conduct Authority published its Mission and Business Plan, together with a fees consultation. The Mission sets out how the regulator intends to enact the role given to it by Parliament to serve the public interest. It plans to publish further documents detailing how it will apply this aim to its principal activities. The Business Plan identifies planning for Brexit and also focuses on the ending of the Payment Protection Insurance workstream, protecting vulnerable consumers, tackling the high cost of credit and long term savings and retirement incomes.

The Prudential Regulation Authority launched a new UK Money Markets Code, a voluntary document setting out the standards and best practice for participants in the deposit, repo and securities lending markets. It outlines high level principles including ethics, governance and risk management, information sharing and confidentiality and communications, execution and settlement.


The Financial Stability Board published a peer review of Brazil, covering trade reporting and its use in risk monitoring and the regulation and supervision of investment funds. The review identifies ‘pioneering’ work which was completed by the country on areas including reporting to trade repositories, mandatory identification of final beneficiaries and direct access by the Central Bank of Brazil and the Securities and Exchange Commission to transaction-level data. The report noted that the breadth and depth of available data enabled the Central Bank to undertake extensive systemic risk monitoring using a broad range of analytics tools.

Topics covered by Better Regulation include
  • BRRD
  • Banking Structural Reform
  • Basel
  • Benchmarks Regulation
  • Brexit
  • Capital Markets Union
  • Capital Requirements Legislation
  • Central Securities Depositories Regulation
  • Credit Rating Agencies Regulation
  • Deposit Guarantee Schemes Directive
  • Dodd-Frank
  • EMIR
  • GDPR
  • Solvency II
  • Insurance Distribution Directive
  • Interchange Fees Regulation
  • Market Abuse/Insider Dealing
  • Markets in Financial Instruments Legislation
  • Money Laundering Directives
  • Money Market Funds Regulation
  • Mortgage Credit Directive
  • Payment Services Directive
  • PRIIPs Regulation
  • Prospectus Directive
  • Ring-fencing
  • Securities Financing Transactions Regulation
  • Securitisation Regulation
  • Senior Insurance Managers Regime
  • Senior Managers Regime
  • Undertakings for Collective Investment in Transferable Securities Directive