UPCOMING LEGISLATION
Dáil Éireann will resume on 18 September 2024. Key upcoming legislation to watch out for includes:
- Companies Act (Corporate Governance, Enforcement and Regulatory Provisions) Bill This Bill was published by the Department of Enterprise, Trade and Employment on 24 July 2024 together with an Explanatory Memorandum, and is expected to progress swiftly. Read our Corporate Group's insights here: Draft Legislation to Amend the Companies Act 2014 Published. A widely welcomed part of the Bill would place the so-called 'interim fix' for the execution of documents by a company under seal, previously available between August 2020 and December 2022 (during the COVID-19 pandemic), on a permanent footing from later this year once the Bill completes its passage through the Houses of the Oireachtas. For more information, read our insights here: Execution of Documents under Seal: Update.
- Financial Services and Pensions Ombudsman (Amendment) Bill– NB for Loan Sales In February 2024, there was discussion in the Finance Committee of the Houses of the Oireachtas, and in the Irish media, of an issue which may trigger an amendment to the Financial Services and Pensions Ombudsman Act 2017. In respect of mortgage loans, the jurisdiction of the Financial Services and Pensions Ombudsman (FSPO) is limited to dealing with complaints from consumers in respect of the conduct of regulated firms. The FSPO has signalled his understanding that his remit doesn't extend to dealing with complaints regarding how a regulated credit servicing firm dealt with a customer's standard financial statement (SFS) under the Central Bank's Code of Conduct on Mortgage Arrears (CCMA) between 2015 and 2019. His position is that the assessment of the SFS is a key decision where responsibility rests with the legal owner of the relevant loan (who did not need to be regulated between 2015 and 2019, prior to the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 coming into force). In the relevant case, the consumer made a complaint in respect of the conduct of the credit servicing firm that was dealing with their credit agreement; the FSPO's position was that the conduct complained of in respect of the assessment of the SFS related to a matter that was instead the responsibility of the legal owner of the credit agreement. The FSPO noted that he could not make a finding in respect of the conduct of that legal owner because, at the time of the conduct complained of, the legal owner was not a regulated firm. We understand that the Attorney General's Office is analysing the issue and considering whether a legislative amendment is needed. If such an amendment is needed, it is likely that it will be made to the Financial Services and Pensions Ombudsman (Amendment) Bill when it reaches Committee Stage in Dáil Éireann.
- Finance (Provision of Access to Cash Infrastructure) Bill This Bill was published by the Department of Finance on 31 July 2024 following publication of the General Scheme earlier this year. The Bill is a key deliverable arising from recommendations made in the November 2022 Retail Banking Review Report, with questions on cash access and cash acceptance also forming part of the Department of Finance's National Payments Strategy: Public Consultation in December 2023 (read our insights on that consultation here: National Payments Strategy: Department of Finance consults on its plans). For more information on the Access to Cash Bill, read our insights here: Access to Cash Bill published.
- Limited Partnership Reform The Department of Enterprise, Trade and Employment published the General Scheme of the Registration of Limited Partnerships and Business Names Bill 2024 in late July 2024, setting out proposals to reform the Limited Partnerships Act 1907. It had consulted on possible reforms in January 2019. Details of the proposals are being reviewed by stakeholders at the moment, and the main themes are summarised in our recent insights: Limited Partnerships: Proposals for reform published. Notable aspects of the proposal would include a requirement for a limited partnership (LP) to maintain an ongoing connection with Ireland via an Irish registered office or principal place of business (PPOB). Applicants for registration as an LP would need to demonstrate that the LP will carry on an economic activity in Ireland and that at least one general partner will be EEA-resident or have an EEA PPOB for the life of the LP. The General Scheme also proposes that each LP file an Annual Confirmation Statement by 1 July each year confirming its registered details (this would not replace the requirement to file notices of changes as they occur, or the requirement for qualifying LPs to file annual financial accounts). It is important to note that the proposal is currently a general scheme, which must undergo pre-legislative scrutiny (PLS) and may be amended before it is formally published as a Bill. PLS is likely to take place once the Dáil reconvenes. The Bill would then need go through all stages in the Houses of the Oireachtas (most likely in 2025). Then, when it is signed into law, the Registrar would have 30 months to, among other matters, notify existing LPs of the steps required to re-register or remove themselves from the register. An LP would then have 12 months to re-register once it receives a notice, or the Registrar could remove it from the register.
- Residential Tenancies (Amendment) (No. 3) Bill 2024 – NB for transactions involving BTL properties This Bill was published on 24 July 2024, following publication of a General Scheme (then known as the Residential Tenancies (Right to Purchase) Bill) for PLS in October 2023. It is expected to progress when the Dáil reconvenes. The Bill will be relevant where tenancies of more than 6 months are to be terminated on a sale of a residential property, and not where a residential property will be sold with tenants in situ. Given the implications of this proposal for residential landlords and buy-to-let (BTL) properties, it is expected to be heavily scrutinised as it moves through the legislative process and will be a relevant consideration for our finance clients in residential mortgage transactions with a BTL element. The Bill proposes that, subject to some exceptions, where a notice of termination is given to a tenant based on the landlord's intention to sell the dwelling in which the tenant resides, the landlord would be required to serve a notice inviting the tenant to make a bid on the dwelling within 90 days. The landlord would not be permitted to sell the property during that 90-day period, other than to the tenant or to an approved housing body or the Housing Agency (if either was purchasing the property with a view to letting the tenant remain in the property). If the landlord put the property on the open market after that 90-day period, the landlord would also be required to invite the tenant to make a further bid if the highest offer received by the landlord from a third party was less than or equal to the tenant's highest offer. The tenant would have 10 days to match or exceed that highest bid, and the landlord would be obliged to accept the tenant's bid if it matched or exceeded that highest bid.
CAPITAL REQUIREMENTS REGULATION – NATIONAL DISCRETIONS
On 20 August 2024, the Minister for Finance announced the publication of a consultation on two national discretions under the Capital Requirements Regulation III (CRR III). The consultation closes on 17 September 2024. Most of CRR III will be directly effective from 1 January 2025 (save for the provisions which amend the calculation of own funds requirements for the market risk regime which have been pushed out by one year to January 2026).
The two national discretions which are the subject of the consultation are Article 92(3) (which gives Member State discretion for institutions in relation to the calculation of the total risk exposure amount when calculating the own funds requirements), and Article 465(5) (which gives Member State discretion in relation to the transitional arrangements for the output floor; specifically, Article 465(5) allows for lower risk weights to be applied to exposures secured by mortgages on residential property).
CREDIT UNIONS
The Department of Finance's consultation on the Credit Institutions Resolution Fund under the Central Bank and Credit Institutions (Resolution) Act 2011 (which now only applies to credit unions) and its consultation on the Credit Institutions Stabilisation Fund (again, only relevant to credit unions) both close on 27 September 2024. The former focuses on what the target size for the resolution fund should be once it meets its current target size in 2025. The latter focuses on why the stabilisation fund has not, to date, been used by the credit union sector.
FINANCIAL SERVICES AND PENSIONS OMBUDSMAN
In addition to the upcoming FSPO-related legislation referred to above, the FSPO's office has also begun the process of developing its next Strategic Plan, focusing on the period from 2025 to 2027. It launched a public consultation at the end of August 2024 (Strategic Plan 2025-2027 Public Consultation) seeking views on that plan. The consultation will close on 20 September 2024.
MARKETS IN CRYPTO-ASSETS REGULATION
We expect the Central Bank to publish details shortly of its authorisation and notification processes for MiCA authorisations, following its MiCA-specific industry event in July 2024.
SCREENING OF THIRD COUNTRY TRANSACTIONS
The Department of Enterprise, Trade and Employment now plans to commence the Screening of Third Country Transactions Act 2023 "during the latter part of Q4 of 2024" (moved out slightly from the planned September 2024 commencement date). Updated guidance is also expected shortly. For more information on the scope of the Act, aspects of which will need to be considered by finance clients when enforcement action is taken in respect of certain types of financing arrangements, read our Competition Group's briefing here: An Overview of the Upcoming Foreign Investment Screening Regime in Ireland.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.