Out-Law News | 12 Dec 2019 | 10:19 am | 2 min. read
Michael Hodson, the CBI's director of asset management and investment banking, told a recent industry event that the CP86 review was "progressing well". Every firm within the scope of the review completed a questionnaire sent out by the regulator, and on-site visits are now due to begin, he said.
"[These visits] will allow us to dig deeper and obtain a greater understanding of the information we have gleaned from the questionnaire," he said.
Pending formal guidance being issued by the Central Bank in relation to the outcome of its thematic review of CP86, it is interesting to note the comments from Mr Hodson in relation to the varying levels of resources dedicated to key tasks by firms and reliance by firms on group policies and procedures.
According to the questionnaire, all firms have put in place an organisational effectiveness role although the amount of time spent on this role by similar types of firms varies widely, Hodson said. The questionnaire also showed considerable variation in the resources firms allocated to certain key tasks, which could not always be explained by nature, scale and complexity, he said.
However, Hodson stressed that the regulator had "not reached any conclusions on the information we have gathered so far", making its firm-specific on-site work critical to the success of the review.
"We envisage this body of work concluding sometime in the second half of next year, whether it results in a change to the rules, further guidance and/or ongoing engagement with individual firms, it is too early to say at this stage," he said.
Investment funds expert Marilyn Cooney of Pinsent Masons, the law firm behind Out-Law, said: "Pending formal guidance being issued by the Central Bank in relation to the outcome of its thematic review of CP86, it is interesting to note the comments from Mr Hodson in relation to the varying levels of resources dedicated to key tasks by firms and reliance by firms on group policies and procedures".
Among the CBI's regulatory priorities for next year will be EU-level work on UCITS liquidity management and the entry into force of the Investment Firms Regulation and Investment Firms Directive (IFR), the EU's new bespoke prudential regime for investment firms. It will also continue its review of the Irish client asset regime, which may include extending its client asset requirements to credit institutions.
The CBI will also continue its programme of ongoing supervision of existing firms' corporate governance, cybersecurity risk management, UCITS performance fees, closet indexing, wholesale market conduct risks and outsourcing risks, Hodson said.
"Myself and my colleagues have spoken consistently over the last two years on the importance of [an] Irish regulated entity being able to demonstrate that it is fully in control of all aspects of the business it is responsible for, irrespective of the level of outsourcing or its relationship with group companies," he said.
"EU institutions and citizens rightly expect the Irish entity to take this responsibility seriously and to have in place all the necessary resources, both human and technical, within the EU to deliver on this. For those firms authorised since June 2018 they have got and understood this message and all have staff based in Ireland. It is important that all firms understand these expectations," he said.
15 Oct 2019
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