On 10 March 2021, Banking and Payments Federation Ireland (BPFI) BPFI and our affiliate FIBI (Federation of International Banks in Ireland) responded to the Central Bank of Ireland’s consultation on enhancements to the Central Bank’s Client Asset Requirements. Our response focuses on the following elements of the consultation:
- The proposed transitional period –
- The levy
- PCF45 – New PCF requirement for credit institutions
- Client Asset Management Plan (the “CAMP”) Requirements
- Internal reconciliations and Shortfall/Excesses
We believe that a 24-month implementation period would be appropriate given the first-time application of the CAR to this large segment of the market and not 12 months as suggested in the consultation paper. In view of the significant requirements and technical changes that may be needed, we believe that the transition period should be 24 months for all new requirements for credit institutions and that it should be proportionate (e.g., based on client asset values/assets under custody). Credit institutions are subject to existing levies and this is an important consideration in terms of any approach to the application and allocation of an additional levy to credit institutions.
We suggest that the PCF-45 should be an optional control function based on the nature, scale and complexity of the organisation. Alternatively, the CBI could explore the inclusion of the Head of Client Asset Oversight (“HCAO”) responsibilities as a CF function. Proportionality should be considered with respect to the requirement to develop and/or maintain a Client Asset Management Plan (CAMP) and a Client Asset Applicability Matrix within the CAMP. Certain institutions may have very limited client asset offerings and there may not be benefits to implementing a detailed client asset matrix for the full product offering.
Consideration should be given to the timeline between publication of final rules and the implementation date, to ensure firms have sufficient time to develop/procure automated solutions to meet reconciliation requirements and/or additional regulatory reporting obligations. A 24-month implementation period would be appropriate given the first-time adoption due to the significant number of changes and appropriate guidance should be published in a timely manner alongside the requirements.
For further information on BPFIs position please see the final response here.
If you have any questions, you can contact Gavin Purtill, Head of Capital Markets by email at firstname.lastname@example.org