KEY THEMES IN FINANCE AND CAPITAL MARKETS
IRISH PROPOSED LEGISLATION
Air Navigation and Transport (International Aviation Agreements) (Amendment) Bill
This bill has not been published but it is intended to make legal provision for the Beijing Convention 2010 and the Montreal Protocol 2014 in Ireland.
Latest stage: Heads of bill in preparation.
Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2023
This bill has not been published but it is intended to make legal provision to enhance and strengthen enforcement and regulatory provisions in the Companies Act 2014. It will also permanently provide for the option of virtual meetings along with new provisions relating to receivership. For more information see our Corporate section.
Latest stage: Heads of bill in preparation.
Co-operatives Societies Bill 2022
See Corporate section for further detail.
Matheson Insight: Co-Operative Societies Bill 2022 From a Financing Perspective
Miscellaneous Provisions (Transparency and Registration of Limited Partnerships and Business Names) Bill 2023
See Corporate section for further detail.
Personal Insolvency (Amendment) (No.2) Bill
See Insolvency section for further detail.
DEPARTMENT OF FINANCE CONSULTATIONS
Consultation on the transposition of the Credit Servicers’ and Credit Purchasers’ Directive
On 24 January 2023, the Minister for Finance published a public consultation on the transposition of Directive (EU) 2021/2167 ("Credit Servicing Directive") on credit servicers and credit purchasers. The Credit Servicing Directive entered into force in December 2021 and member states are required to transpose the directive by 29 December 2023.
The purpose of the directive is to promote a secondary market for non-performing loans. The directive:
- lays down a common framework for the sale and management of bank originated non-performing loans which are transferred or sold after 29 December 2023;
- provides for a new EU wide authorisation and regulatory framework for credit servicers to be overseen by national competent authorities;
- permits authorised entities to passport credit servicing activities across the EU; and
- amends the Consumer Credit Directive 2008 and the Mortgage Credit Directive 2014.
The directive contains a number of discretions which can be exercised by member states. The purpose of the consultation was to seek the views of the public on these discretions so as to inform the Minister for Finance’s decisions in transposing the directive.
Latest stage: The consultation is now closed and the Department of Finance has published its decisions following this consultation.
Matheson Insight: EU Credit Servicing Directive – An Update
EU DRAFT LEGISLATION
Proposal for a Regulation on the Law Applicable to the Third-Party Effects of Assignments of Claims
Procedure reference: 2018/0044 (COD)
Date published: 12 March 2018
This regulation proposes to set down uniform rules on the ownership of claims and securities in cross-border transactions. It seeks to designate which national law will designate the ownership of a claim after it has been assigned on a cross-border basis. It forms part of the legislative package to establish the Capital Markets Union with the aim that legal certainty will promote cross-border investment, access to cheaper credit and market integration.
Latest stage: First reading in European Parliament and Council.
Procedure reference: 2022/0411 (COD)
Date published: 7 December 2022
This proposal forms part of an overall series of proposed measures published by the European Commission on 7 December 2022 to further develop the EU's Capital Markets Union. It also forms part of the Listing Act package, a set of measures to make public markets more attractive for EU companies and facilitate access to capital for small and medium-sized companies (SMEs).
The Listing Act Proposal extends beyond enabling SMEs to access the capital markets. For example, the proposed amendments to the EU Prospectus Regulation (which form a part of the Listing Act Proposal) further standardise the format and sequence of the prospectus and summary, most notably in relation to the order of disclosure of information, and provide for a streamlining of the approach to risk factors in a prospectus.
Latest stage: The European Council is urging to finalise the Listing Act Proposal before the end of the current legislative cycle on June 2024. On 24 October 2023, the European Parliament's ECON Committee voted in favour of the proposal which is an important step on the road to the possible approval of the Listing Act Proposal.
EU Green Bond Standard
Procedure reference: 2021/0191 (COD)
Date published: 6 July 2021
As one of the EU’s green finance initiatives, the European Commission proposed a voluntary EU green bond standard ("EuGBS") under a proposed regulation on European green bonds in July 2021.
Latest stage: Following extended negotiations between the EU institutions, the EU Green Bond Standard Regulation was adopted by the European Parliament on 5 October 2023 and by the European Council on 23 October 2023. We expect it to be published in the Official Journal shortly and to therefore enter into force early in 2025. This is a significant development, including for Irish issuers of green bonds. See our commentary section.
Procedure reference: 2022/0403 (COD)
Date published: 7 December 2022
This proposal forms part of an overall series of proposed measures published by the European Commission on 7 December 2022 to further develop the EU's Capital Markets Union. While the title of the regulation suggests a focus on central clearing, the proposal extends beyond clearing and makes a number of other amendments to the European Market Infrastructure Regulation (EU) 648/2012 ("EMIR") as part of a broader review of EMIR known colloquially as “EMIR 3.0”.
Proposed amendments to EMIR include (i) requiring firms subject to the clearing obligation to clear at least a certain proportion of the services identified as of substantial systemic importance through active accounts at EU central counterparties ("CCPs") and to report on such clearing and (ii) the removal of the equivalence decision condition in order to benefit from the intragroup clearing and margin exemptions and its replacement with a list of third countries for which an exemption should not be granted. Other proposed changes include amendments to the way CCPs are authorised and monitored on an ongoing basis and the recognition of third country CCPs.
Latest stage: Under review by the European Parliament and the European Council.
Matheson Insight: EMIR 3.0 – Overview of European Commission’s proposed amendments to EMIR
EU DIRECTIVES AWAITING IMPLEMENTATION
Directive (EU) 2021/2167 of the European Parliament and of the Council of 24 November 2021 on credit servicers and credit purchasers and amending Directives 2008/48/EC and 2014/17/EU (the "Credit Servicing Directive")
See above under Department of Finance Consultations.
See further commentary on the Credit Servicing Directive here.
Data published: 16 May 2023
The implementation of the Aviation Emissions' Directive is another important step in the adoption of the European Commission's "Fit for 55" legislative package to deliver the European Green Deal (the EU's long-term growth strategy to make Europe climate-neutral by 2050). The objective is to revise the EU Emissions Trading System ("EU ETS") in respect of aviation emissions in a cost-effective and coherent way in line with the European Union's increased climate target, while taking into account the need for a just transition and the need for all sectors to contribute to the EU climate efforts. The main legal amendments are:
- to consolidate the total quantity of aviation allowances at current levels, and apply the linear reduction factor in accordance with Article 9 of the ETS Directive;
- to increase auctioning of aviation allowances;
- to continue intra-European application of the EU ETS while applying CORSIA (Carbon Offset and Reduction Scheme for International Aviation) as appropriate to extra-European flights; and
- to ensure that airlines are treated equally on the same routes with regard to their obligations with economic impacts.
Transposition date: 31 December 2023
EUROPEAN BANKING AUTHORITY CONSULTATIONS
Consultation on draft guidelines on the STS criteria for on-balance-sheet securitisation under Article 26a(2) of Regulation (EU) 2017/2402 of the European Parliament and the Council (EBA/CP/2023/09)
At the end of April 2023, the European Banking Authority ("EBA") launched a public consultation on its draft guidelines on the criteria for on-balance-sheet securitisations ("STS Criteria"). On-balance-sheet securitisations are now eligible for preferential risk-weighted treatment under the Capital Requirements Regulation. The draft guidelines provide a harmonised interpretation and clarify aspects with a potential level of ambiguity, ensuring a harmonised understanding of the STS Criteria along with a harmonised implementation in terms of capital requirements. The EBA were also conscious of ensuring consistency with existing guidelines for traditional securitisations.
The consultation closed on 7 July 2023. The EBA is now considering the feedback received from industry associations and market participants during the consultation period, with a view to publishing final draft Guidelines towards the end of 2023 or early 2024.
Matheson Insight:
LINKS TO OTHER RELEVANT DEVELOPMENTS
Corporate
- Screening of Third Country Transactions Act 2023
- Companies (Corporate Governance, Enforcement and Regulatory Provisions) BilL
Tax
Please see this section for the following relevant proposal.
- Proposal for a Directive laying down rules to prevent the misuse of shell entities for tax purposes.
Financial Institutions Group
Please see this section for the following relevant proposals: