The banking industry in Ireland is governed by both national laws and EU legislation, which is either directly effective or transposed into Irish law through local measures.

The regulation of banking activities in Ireland is primarily governed by the Single Supervisory Mechanism Regulation ((EU) 1024/2013) (the “SSMR”) and the Central Bank Acts 1942-2018 (the “Central Bank Acts”). The Central Bank Act 1942 established the CBI as the primary regulator for banking activities in Ireland. The Central Bank Reform Act 2010 modified the regulatory framework in Ireland including the CBI’s supervisory culture and approach.

The CBI’s enforcement powers were further enhanced through the Central Bank (Supervision and Enforcement) Act 2013 (the “2013 Act”). The CBI has broad enforcement powers to deter reckless behaviour and to promote cultures consistent with those expected in the post financial crash financial system. The 2013 Act contains penalties which may be imposed on individuals and regulated firms. Relevant individuals are subject to fines of up to EUR1 million and regulated firms subject to fines of up to EUR10 million or 10% of the previous year’s turnover, whichever is greater.

The Central Bank Act 1971 mandates that any entity conducting “banking business” in Ireland must obtain a banking licence. This Act also outlines specific requirements and conditions that banks must follow to operate in Ireland.

Under the Central Bank Acts, the CBI is authorised to issue regulations and codes of practice that banks must adhere to. The CBI has developed various regulations and guidelines addressing various areas relevant to the oversight of banks and the protection of consumers including corporate governance; mortgage arrears; consumer protection; minimum competency requirements; fitness and probity standards; individual accountability; and lending to SMEs.

The CBI is supervised in its regulation of banks in Ireland by the European Central Bank (the “ECB”) under the SSMR. These regulations and codes ensure that Irish banks operate within a framework that promotes transparency, accountability and fairness in their dealings with customers and in managing their internal operations. Through its broad regulatory powers, the CBI plays a crucial role in maintaining the stability and integrity of the Irish banking system.

In addition to the Central Bank Acts the following key pieces of legislation are also applicable to Irish banks.

• The European Union (Capital Requirements) Regulations 2014.
• The European Union (Capital Requirements) (No 2) Regulations 2014 (the “Irish Capital Regulations”).
• The EU Directive 2013/36 (“CRD IV”) as amended by Directive (EU) 2019/878 (collectively with CRD IV, “CRD V”).
• The Capital Requirements Regulation (575/2013/EU) (“CRR”) as amended by Regulation 2019/876.

Banks are also required to comply with various pieces of secondary legislation and codes issued under the Central Bank Acts including the CBI’s Corporate Governance Requirements for Credit Institutions 2015 (the “CGR”) and the Consumer Protection Code 2012 (as amended) (the “CPC”). CRD V was transposed into Irish law pursuant to regulations signed on 22 December 2020.

The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010-2021 comprise the primary legislation governing anti-money laundering in Ireland and implement the EU Money Laundering Directives. The CBI is the competent authority for monitoring compliance with this legislation by banks and other financial service providers.

Any institution wishing to engage in banking activities in Ireland must be appropriately authorised.

In Ireland, any entity seeking to operate as a bank must obtain authorisation from the CBI. Section 7(1) of the Central Bank Act 1971 makes it illegal to engage in banking business without an authorisation. Banking business is defined as any business that consists of or includes:

• receiving money on the person’s own account from members of the public either on deposit or as repayable funds; and
• the granting of credits on own account (subject to certain exceptions).

Deposit taking, in broad terms, means receiving money from the public either on deposit or as repayable funds.

A person may apply for a banking licence under Section 9 of the Central Bank Act 1971. Since the introduction of the SSMR, the ECB is the competent authority for the granting of banking licences. Applications for authorisation may also be made under Section 9A of the Central Bank Act 1971 for an Irish branch of a bank that is authorised in a third country (ie, a non-EEA country).

It is prohibited for persons to hold themselves out or represent themselves as a banker, or to carry on banking business, unless appropriately authorised.

The process of obtaining authorisation to operate as a bank within Ireland involves multiple stages, wherein the applicant will frequently interact with the CBI. If the CBI considers that the conditions for authorisation are met by an applicant, it will submit the application to the ECB with a recommendation that it be approved. The final authority to grant or refuse the application rests with the ECB.

Once a person is authorised to carry on banking business the authorisation covers a range of typical banking activities including deposit taking; lending; e-money; payment services; and investment activities regulated by the Markets in Financial Instruments Directive (2014/65/EU) (“MiFID II”).

The key requirements of the application and authorisation process are as follows.

Authorisation Requirement

To qualify for authorisation, credit institutions will be required to meet certain requirements and standards in respect of the following.

• Capital adequacy: minimum capital requirements, which are aligned with the Basel III framework under CRR.
• Corporate governance: a board of directors and senior management with appropriate experience and fitness to manage a bank.
• Internal controls and risk management: adequate systems to manage risks, including operational, credit and market risks.

The process for applying for authorisation is as follows.

Pre-application phase

This phase includes the applicant credit institution engaging with the CBI through a pre-application meeting. This is a means by which the CBI can understand the nature of the applicant credit institutions’ business and enables the credit institution to gain clarity of the regulatory expectations by the CBI and within the EU. The preliminary phase is called the “Exploratory Phase” and involves the submission of a high-level proposal for application which will include one or more calls or meetings with the CBI to identify any preliminary issues.

Submission of application

The process involves a comprehensive application for authorisation using the ECB’s information management system portal. This application must meet all aspects required by the ECB including:

• general presentation of the applicant and its history, including background and justification for requesting the licence;
• programme of operations, including intended activities, business model and the associated risk profile;
• structural organisation of the applicant, including IT organisation and outsourcing requirements;
• financial information, including forecast balance sheet and profit and loss account projections and adequacy of internal capital and liquidity;
• suitability of shareholders; and
• suitability of the management board and key function holders and of the supervisory board.

Where the applicant is a large credit institution, the ECB will play a significant role in determining whether the application form is approved or rejected. Under the SSMR, the ECB has exclusive competence in respect of certain aspects of the prudential regulation of Irish banks, including the granting and withdrawal of banking licences and the assessment of notifications of the acquisition and disposal of qualifying holdings in banks (except in the case of a bank resolution).

Assessment and feedback

The CBI will assess the application and conduct a detailed review of the application. This process typically involves multiple rounds of extensive comments and queries from the CBI and the ECB. The CBI, in conjunction with the ECB, will assess areas of the application including but not limited to financial soundness; programme operations; suitability of shareholders; and suitability of the management board and key function holders and the supervisory board.

Decision

Once the application assessment is complete, the CBI in conjunction with the ECB will make a decision of approval or rejection of an application The ECB indicates that it usually takes between six and 12 months for a decision to be taken on an application. Where a licence is granted, it may be subject to specific conditions.

Banking licences are issued without a time limitation subject to the entitlement of the CBI to withdraw the licence.

Section 18(2) of the Companies Act 2014 prohibits private companies limited by shares from carrying on the activity of a credit institution. A new Irish bank will need to incorporate as a designated activity company or a public limited company.

Activities and Services for a Licenced Bank

Once an Irish bank obtains authorisation, it will be allowed to engage in a range of activities, including:

• deposit taking;
• granting loans and other forms of credit;
• payment services;
• issuance of money;
• trade finance; and
• where authorised under MiFID II, investment services.

Banks are not permitted to provide services outside the scope of their licence without seeking authorisation from the CBI and the ECB in the first instance.

Passporting

One of the most beneficial aspects of obtaining an Irish authorisation as a credit institution is the ability to operate across the EU under the EU’s passporting regime. Subject to the provision of a notification to the CBI and compliance with applicable Irish conduct of business rules, banks from other EU member states are permitted to operate in Ireland, with or without establishing a branch in Ireland, under the EU’s passporting rules.

In Ireland, the key provisions governing the control over a bank is Chapter 2 of Part 3 of the Irish Capital Regulations and European Communities (Assessment of Acquisitions in the Financial Sector) Regulations 2009.

An application must be submitted to the CBI for the acquisition of a qualifying holding in an Irish bank. The ECB is the competent authority for the approval of proposed acquisitions of, or increases in, direct or indirect qualifying holdings in respect of banks authorised in Ireland. The application must be made prior to the completion of the acquisition of the shares in excess of the applicable thresholds.

Any entity proposing to acquire an Irish bank must notify the CBI of a proposed acquisition or disposal. The notification is made using an acquiring transaction notification form (the “ATNF”). The CBI uses the information provided in the ATNF to determine whether there are prudential grounds on which it should object to the transaction and if it ought to impose any conditions on an approval of the acquisition.

A qualifying holding is defined as:

• a direct or indirect holding in an undertaking that represents 10% or more of the capital or of the voting rights, or which makes it possible to exercise a significant influence over the management of that undertaking; or
• any proposal that seeks to increase a direct or indirect shareholding in an entity to 20%, 33% or 50% or where the bank would become the proposed acquirer’s subsidiary.

In either of these instances, the acquiring party is considered to have a qualifying holding. The acquisition is subject to regulatory approval before the acquisition can proceed. If the regulatory clearance is not sought where the acquirer is getting control of the bank, the transaction will be prohibited.

The CBI also requires that fitness and proper standards be met by the proposed acquirer or controller.

A notification regarding the proposed acquisition of a qualifying holding must be submitted to the CBI via the ECB’s information management system portal. The CBI and ECB will then work in conjunction to approve acquisitions or increases in qualifying holdings within Irish banks.

The CBI will consider the following when considering a ATNF.

• The identity of the acquirer and any information regarding the legal entity or individual acquiring control.
• Details of the acquisition including the proposed shareholdings and voting rights.
• Business plan: the CBI will conduct a comprehensive review of historical and projected compliance with quantitative prudential requirements, and the business plan of the proposed acquirer.
• Financial soundness: the CBI will assess the source(s) of funding and the manner in which the funds are to be paid. This aspect of the assessment is performed in line with the ECB Handbook on Qualifying Holding Procedures, and the Joint Guidelines for the prudential assessment of acquisitions in the financial sector (JC/GL/2016/01).

The CBI has up to 90 business days from the receipt of a complete application to assess the acquiring transaction notification. Additional information can be sought by the CBI throughout this time period.

There are currently no specific restrictions on private ownership nor geographical restrictions on foreign ownership of Irish banks. The Screening of Third Country Transactions Act 2023 gives effect to the EU Screening Regulation (Regulation (EC) 2019/452), which introduced a screening regime for certain foreign investment transactions that may present risks to the security or public order of Ireland.

It is generally understood that the CBI prefers that banks are not owned or controlled by single private individuals or that bank ownership of banks is not “stacked” under insurance undertakings. Prior ownership experience of banks or other financial institutions will be an advantage in applying for the approval of an acquisition of a qualifying holding.

Once an acquirer has been assessed and has successfully gained control over the bank, they will be subject to ongoing oversight by the CBI and will be obliged to provide periodic financial reports to the CBI alongside updates on the corporate governance and risk management within the bank.

All banks authorised in Ireland are subject to minimum corporate governance standards as set out in the CGR. Additional requirements set out in the CGR apply to banks designated as “high impact” by the CBI. The CGR seeks to ensure that credit institutions authorised by the CBI have established sound internal governance structures in order to ensure effective oversight of their activities, relative to their scale and level of sophistication.

Specific matters regulated in the CGR include:

• the required composition of the board of directors, including a requirement for a majority of independent non-executive directors (subject to certain exceptions for banks which are subsidiaries of groups) and a minimum of five directors, or seven directors for banks designated as “high impact” pursuant to the CBI’s probability risk and impact system;
• a prohibition on a person who has been an executive director or member of the senior management of the bank during the previous five years from becoming chairman;
• a requirement to appoint a suitably qualified and experienced chief risk officer;
• a requirement to establish audit and risk committees of the board and, in certain cases, remuneration and/or nomination committees;
• a requirement for a formal annual review of board and individual director performance and, in the case of banks designated as “high impact”, an external evaluation every three years;
• a requirement for boards of banks designated as “high impact” to put in place formal skills matrices to ensure an appropriate skills mix on the board; and
• a requirement for all banks to submit an annual compliance statement to the CBI specifying whether they have complied with the requirements of the CGR.

Banks deemed significant institutions for the purposes of CRR are required to comply with certain requirements of those regulations relating to limitations on the number of directorships and sub-committees of the board instead of the requirements in the CGR dealing with the same matters. The European Banking Authority (the “EBA”) published its final guidelines on internal governance on 2 July 2021 (EBA/GL/2021/05) (the “EBA Guidelines”). The EBA Guidelines prescribe the corporate government arrangements that banks are required to implement in accordance with Article 74(1) of the Fourth Capital Requirements Directive (2013/36/EU) (“CRD”).

Within the sphere of corporate governance, the CBI has emphasised that diversity and inclusion are key tenets of robust and resilient corporate structures. This has been evident in publications and reports of the CBI, including a 2018 report which highlighted that banks need to make progress to ensure that they are adequately diverse and inclusive.

The CBI also publishes an annual report concerning the demographics of applications received from firms for CBI approval for certain senior roles in financial firms. The 2023 report conveyed that 32% of individuals put forward for senior roles were female, compared to 16% in 2012.

The CBI has put a fitness and probity regime in place. It applies to individuals performing prescribed roles in regulated firms, including banks. These roles are referred to in the legislation as controlled functions (“CF”) or pre-approval controlled functions (“PCF”). The fitness and probity regime is set out in Part 3 of the Central Bank Reform Act 2010 (as amended).

The purpose of the fitness and probity regime is to ensure that persons performing these important roles are sufficiently capable and of good character. Banks are therefore required to ensure that those persons:

• are competent and capable;
• act honestly, ethically and with integrity; and
• are financially sound.

Before appointing an individual to a PCF, CBI approval must be obtained (or, in the case of significant institutions, the ECB). A person wishing to hold a position on the management board of a bank or wishing to become a key function holder in a bank must complete an individual questionnaire, including details of the applicant’s relevant qualifications and current and historic employment details, and submit it to the CBI.

The CBI is also empowered to conduct investigations of holders of CFs and PCFs and may impose suspension or prohibition orders depending on the result of such investigations. PCFs in banks include the board directors; the chief operating officer; the heads of control functions; and the heads of finance, retail sales, treasury, asset and liability management, credit; the head of market risk; the head of material business line; and the chief information officer.

The assessment of the fitness and probity of the management board of banks applying for authorisation, and of members of the management board and key function holders of banks designated as significant institutions pursuant to the SSMR, is the responsibility of the ECB.

As part of fitness and probity assessments, regard must be had to the revised Guidelines on the Assessment of the Suitability of Members of the Management Body and Key Function Holders, jointly issued by the EBA and the European Securities and Markets Authority.

On 9 March 2023, the Central Bank (Individual Accountability Framework) Act 2023 (the “IAF Act”), which underpins the Individual Accountability Framework (“IAF”), was signed into law. The IAF Act amends the Central Bank Reform Act 2010, the 2013 Act and the Central Bank Act 1942. The IAF comprises of four elements that impact the regulation applicable to holders of CFs and PCFs. They are as follows.

• The senior executive accountability regime (the “SEAR”).
• The incorporation of new conduct standards for all firms and their management.
• Enhancements to the fitness and probity regime.
• Updates to the CBI’s administrative sanctions procedure (the “ASP”).

The primary purpose of the IAF Act is to improve the accountability of the Irish regulated firms, including banks.

SEAR

The purpose of the SEAR is to improve governance, performance, and accountability in firms. It does this by placing obligations on firms and senior individuals within them to set out clearly where responsibility and decision-making lies and by identifying what those responsibilities entail. The SEAR will apply to all individuals performing a PCF role at “in-scope firms”, including credit institutions (excluding credit unions). The SEAR applied from 1 July 2024, except to (independent) non-executive directors who will be covered from 1 July 2025.

The IAF introduced, by way of amendment to the Central Bank Reform Act 2010, a new duty of responsibility applicable to any PCF, at an “in-scope firm”, who has “inherent” or “prescribed” responsibility for any aspect of the affairs of the firm. This requires individuals to take “any steps that it is reasonable in the circumstances for the person to take” to avoid a contravention by their firm of its obligations under financial services legislation.

In its Consultation Paper 153, the CBI confirmed that avoiding a contravention includes avoiding the continuation of a contravention. When considering whether a relevant individual has discharged their duty of responsibility and taken the necessary reasonable steps, the IAF Act requires the CBI to consider all “relevant circumstances”, including the function being performed, the person’s level of knowledge and experience, the level of knowledge and experience that a person performing the role should have and the existence and application of appropriate and effective systems.

The SEAR also requires each “in-scope firm” to have a comprehensive and up to date management responsibilities map that describes its management and governance arrangements. Furthermore, each “in-scope firm” must prepare a statement of responsibilities clearly setting out the role and areas of responsibilities of the relevant PCF role holder, including all inherent, prescribed and other responsibilities, so that there can be no ambiguity as to the scope of their duties.

This will also enhance the CBI’s ability to hold individuals accountable for regulatory breaches in areas for which the PCF role holder is responsible.

Conduct Standards

The IAF Act introduced conduct standards applicable to individuals performing CFs in all firms These conduct standards applied from 29 December 2023 and their purpose is to impose an obligation on each person performing a CF to act appropriately and to ensure that any individual who has engaged in misconduct is held accountable for that misconduct. The IAF imposes common conduct standards that apply to all CFs (including PCFs), requiring these individuals to:

• act with honesty, integrity, due, skill, care and diligence;
• co-operate in good faith and without delay with regulators;
• act in the best interests of customers and treat them fairly and professionally; and
• operate in compliance with standards of market conduct and trading venue rules.

The IAF also introduces a small number of additional conduct standards that will be imposed on senior executives. These additional conduct standards require in-scope individuals to take reasonable steps and to consider all relevant circumstances in the discharge of their duties.

The IAF Act also provides for the CBI to set out business standards to be met by firms for the purpose of ensuring that firms act:

• in the best interests of customers and the integrity of the market;
• honestly, fairly and professionally; and
• with due skill, care and diligence.

Changes to Fitness and Probity Regime

The IAF also introduces updates to the CBI’s fitness and probity regime. Under the IAF, firms must issue a “certificate of compliance” confirming that they are satisfied on reasonable grounds that the CF holder complies with the fitness and probity standards and that the person has agreed, in writing, to comply with these standards. From 1 January 2025, and annually thereafter, firms will be required to submit confirmation of compliance with the certification requirements to the CBI.

Furthermore, the CBI can investigate an individual if the individual was in a CF position within six years of the date of the start of the investigation. Previously, the CBI could only investigate individuals if the individual was in a CF position when the CBI started the investigation.

Amendments to the ASP

The IAF empowers the CBI to take enforcement action under the ASP directly against individuals for breaches of their obligations, rather than only for their participation in breaches committed by a firm. This amendment is referred to as the “participation link’” and facilitates the direct pursuit of individuals for contraventions of the conduct standards or responsibilities under the SEAR. This update has been affected by way of an amendment to the Central Bank Act 1942.

A further significant update to the ASP is that the High Court is now required to confirm sanctions imposed by the CBI under the undisputed fact settlement process and the investigation report settlement process. The amended legislation provides that the High Court will confirm the CBI decision unless it is satisfied that the CBI “made an error of law” in its decision or that a sanction “is manifestly disproportionate”. The High Court’s oversight of the settlement process is only required in circumstances where the firm or individual acknowledges the commission of a contravention.

Banks in Ireland are required to comply with the remuneration requirements set out in the Irish legislation implementing CRD V, the remuneration disclosure requirements set out in CRR and the relevant EBA Guidelines. These requirements are designed to apply to banks in a manner that is commensurate with the nature and size of each bank’s operations.

On 2 July 2021, the EBA issued guidelines on sound remuneration policies under Directive 2013/36/EU that took effect from 31 December 2021 (the “EBA Remuneration Guidelines”). A bank’s remuneration policy must promote sound and effective risk management and must not encourage risk-taking that exceeds the bank’s level of tolerated risk.

The policy must apply to all staff whose professional activities have a material impact on the risk profile of the bank, including senior management, risk-takers, staff engaged in CFs and any employees whose total remuneration takes them into the same pay bracket as senior management and risk-takers. A bank’s policy must be gender neutral and ensure that all staff are paid equally for equal work of equal value. The bank’s policy must also be consistent with its environmental, social and governance (ESG) objectives.

Staff in CFs are required to be remunerated in accordance with the achievement of objectives linked to their functions that are independent of the performance of the business areas they control. Variable elements of remuneration must be based on assessment of performance over a multiyear period, with payments spread over a period that takes account of the business cycle. The variable component of remuneration for each individual (ie, the bonus) is generally not permitted to exceed 100% of the fixed component and must be subject to claw back arrangements.

When granting retention bonuses, a bank must now document the justification for each individual bonus and also define the applicable performance conditions that were considered in advance of the granting of any such bonus. A bonus can be increased to 200% of a bank employee’s fixed remuneration where shareholder approval has been granted for such an increase.

With respect to proportionality, the European Union (Capital Requirements) (Amendment) Regulations 2020 introduced exemptions from the variable remuneration requirements relating to the components and deferral of variable remuneration where staff:

• work in a small and non-complex institution (as defined in CRR) with assets on average equal to or less than EUR5 billion during the four-year period preceding the current financial year; and
• to employees with an annual variable remuneration of EUR50,000 or less and does not represent more than one-third of the employee’s total annual remuneration.

The Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010-2021 (the “CJA”) ensure that the Irish AML and CFT regime is in line with the requirements of Directive (EC) 2005/60 (the “Third EU Anti-Money Laundering Directive”), Directive (EU) 2015/849 (the “Fourth EU Anti-Money Laundering Directive”) and Directive (EU) 2018/843 (the “Fifth EU Anti-Money Laundering Directive”). The CJA impose the following obligations on banks.

• They have to outline the customer due diligence requirements they are required to apply, and the instances when they must be applied.
• They have to set out the requirement to complete both a business level risk assessment and customer level risk assessment.
• They have to provide AML and CFT training to staff.
• They have to accurately identify the “beneficial owner” behind a customer where the customer is not a natural person and conduct a risk assessment in respect of the beneficial owners.
• They have to set out requirements for internal policies and procedures to combat money laundering and terrorist financing.

Furthermore, as required by Article 30(1) of the Fourth EU Anti-Money Laundering Directive, a central register of beneficial ownership of corporate entities has been established and is maintained by the Irish Companies Registration Office.

The CBI published updated AML and CFT Guidelines for the financial sector on 23 June 2021. These Guidelines outline the expectations of the CBI regarding banks’ compliance with their AML obligations, and include a detailed analysis around risk management, customer due diligence requirements, reporting obligations and integral governance and training.

The revised Guidelines account for the Fifth EU Anti-Money Laundering Directive and set out further expectations for banks in respect of customer protection via de-risking, beneficial ownership identification and verification as well as transaction monitoring.

The CBI is the competent authority in Ireland for ensuring compliance by banks with the CJA and is authorised to take reasonably necessary measures to ensure that banks in Ireland are complying with the applicable AML and CFT legislation. As part of this, the CBI is empowered to issue sanctions (including fines) to banks for breaches of the CJA. The sanctions imposed on Russian investments following the ongoing Russia/Ukraine war has also been an additional focus for the CBI, with Irish banks required to comply with the increasing financial sanctions imposed by the UN and the EU on Russian investments.

The European Union (Deposit Guarantee Schemes) Regulations 2015 (the “DGS Regulations”) transposed the Deposit Guarantee Schemes Directive (2014/49/EU) into Irish law and regulates Ireland’s Deposit Guarantee Scheme (the “DGS”). The DGS is overseen, supervised and administered by the CBI as the relevant designated authority. The DGS was implemented following the liquidation of Anglo Irish Bank (now Irish Bank Resolution Corporation Limited (in Special Liquidation) (“IBRC”)) in February 2013 to protect deposits of eligible IBRC depositors.

The DGS provides protection for eligible depositors of a bank if that entity is unable to repay its deposits. All Irish banks that accept deposits are required to become members of the DGS. The protection is limited to EUR100,000 per person, per institution.

The DGS Regulations also contain provisions whereby an eligible depositor may be covered in respect of deposits up to EUR1 million for six months after the amount has been deposited or when the deposit becomes legally transferable. The DGS Regulations refer to these protected deposits in excess of the usual EUR100,000 as “temporary high balances”. Examples of these deposits are set out at Regulation 11 of the DGS Regulations as follows:

• monies deposited in preparation for the purchase of a private residential property;
• monies which represent the proceeds of sale or an equity release in respect of a private residential property;
• sums received by an eligible depositor in respect of certain compensation, insurance, divorce and retirement payments; and
• monies paid to the eligible depositor on death or a legacy or distribution from the estate of a deceased person.

Protection relates deposits to the balances in various types of accounts comprising current accounts, deposit accounts and share accounts in banks and building societies. The eligible deposits also include demand notices and the deposit element of tracker bonds.

Deposits in joint accounts are divided equally between the account holders. However deposits to which two or more people are entitled in respect of partnership, association or other similar grouping accounts without legal personality are treated as one deposit.

The DGS covers deposits in the names of individuals, sole traders, partnerships, clubs, associations, schools, charities, companies, small self-administered pensions, trust funds and other monies held by professional service providers on behalf of their clients. A depositor is not required to be an Irish citizen and/or resident in Ireland in order to be eligible for DGS compensation. The DGS offers protection in respect of eligible deposits with Irish banks at all branches in the EEA.

However, deposits by banks, credit unions, building societies, investment firms (including MiFID II investment firms), public authorities, pension schemes, “financial institutions” as defined under CRR and other regulated entities are not covered by the DGS. Securities issued by a bank are not subject to the DGS.

Part 6 of the DGS Regulations consider the financing of the DGS and sets out that the scheme is financed by the participating banks in the state by way of a deposit guarantee contributory fund (the “Fund”). The CBI is required to ensure that it has adequate systems in place to determine the potential liabilities of the Fund and it must ensure, as the national competent authority, that the Fund is used in accordance with the DGS Regulations. Section 19(2) of the DGS Regulations requires the CBI to ensure that the Fund holds at least 0.8% of the amount of eligible deposits of all banks authorised in the state as of 3 July 2024.

Each bank is required to contribute to the DGS in an amount calculated by reference to the number of covered deposits that the bank holds relative to the aggregate covered deposits held by all banks in the state.

Between 2008 and 2010, the Irish state took significant ownership interests in Allied Irish Bank (AIB), Bank of Ireland and Permanent TSB. IBRC was nationalised and is now being wound up and the state has fully divested its shareholding in Bank of Ireland. The state’s current interests per its most recent government publication are as follows: AIB (56%) and Permanent TSB (57%).

Irish Capital Requirements

Under the Irish Capital Regulations, a bank must have initial capital of at least EUR5 million and must be in a position to meet ongoing capital requirements.

Regulatory Capital

The capital requirements applicable to Irish banks while currently primarily derived from CRD IV and CRR, are also informed by international standards promulgated by the Basel Committee on Banking Supervision as well as pronouncements and decisions made by the Basel Committee on Banking Supervision, the Financial Stability Board and the OECD. All of these provisions inform the approach the CBI takes to setting capital adequacy and liquidity requirements.

Irish banks are obliged to maintain financial resources equal to or greater than a percentage of their risk weighted assets (“RWA”).

The own funds of an institution must at all times be in excess of the initial capital amount (currently EUR5 million) required at the time of its authorisation. Own funds’ requirements need to be determined in line with the credit risk, market risk, operational risk and settlement risk.

Irish banks are subject to the following capital requirements.

• The Pillar One requirement mandates a regulatory minimum amount of capital banks must hold. This is a total capital ratio of 8% of the RWA. A minimum of 4.5% of RWA must be CET 1 and at least 6% of RWA should be met with Tier 1 capital. This Pillar One requirement applies to all banks uniformly.
• The Pillar Two requirement is an additional capital requirement that applies on a case-by-case basis, subject to the supervisory review and evaluation process and the relevant bank’s individual business model and risk profile.
• The combined buffer requirement: the CBI also applies the individual buffers provided for in CRD IV being:
1. the capital conservation buffer which is fixed at 2.5% of a bank’s total RWA;
2. the global/other systemically important institution (“GSII/OSII”) buffer. The six banks regulated by the CBI are subject to the OSII buffer ranging from 0.5% to 1.5%;
3. the counter-cyclical capital buffer (“CCyB”) which is currently at 1.5% in Ireland. The CCyB could be increased above 1.5% were the CBI to deem that cyclical risks were becoming elevated; and
4. the systemic risk buffer (the “SRB”) which is designed to mitigate long-term, non-cyclical risk which may have serious adverse consequences for the economy. The CBI does not intend to introduce a SRB as the applicable risks are now captured through the CBI’s strategy for the CCyB.

The types of capital that qualify for capital adequacy purposes are common equity Tier 1 comprising ordinary share capital and reserves, additional Tier 1 being perpetual co-ordinated debt instruments which contain certain specified features, including restrictions on redemption and automatic triggers for write-down of the debt or conversion of the debt into equity and Tier 2 being subordinated debt with an original maturity of at least five years.

In addition to the requirements of CRD V/CRR, the Bank Recovery and Resolution Directive (as amended) (the “BRRD”), as implemented in Ireland, also requires banks to meet the minimum requirement for own funds and eligible liabilities (“MREL”) to enable banks to absorb losses and restore their capital position in a resolution scenario. MREL requirements are institution specific. If a resolution tool under the BRRD is to be implemented (ie, the bank will not be liquidated), the default MREL requirement is calculated as approximately two times the sum of Pillar One, Pillar Two and the combined buffer requirement. This may be adjusted upwards or downwards in accordance with the provisions of the BRRD.

Regulation (EU) 2022/2036 came into force on 14 November 2022 and made certain amendments to CRR and the BRRD to improve the resolvability of EU banking institutions (the “Daisey Chain Regulation”). The Daisey Chain Regulation specifically provides resolution authorities with the power to set internal MREL on a consolidated basis. In these cases, intermediate subsidiaries will not be obliged to deduct their individual holdings of internal MREL. This is done to avoid in particular double-counting of MREL elements at the level of intermediate entities, ensuring that EU banking groups keep sufficient loss absorption capacity in line with their disclosed MREL.

Specific MREL treatment has been introduced for entities in a banking group that are to be wound up in accordance with insolvency laws (and therefore will not be subject to resolution action such as a conversion or write-down of MREL instruments) (known as “Liquidation Entities”). Liquidation Entities will not be required to comply with an MREL requirement unless the resolution authority decides otherwise.

EU member states were required to transpose the changes to the BRRD by 13 November 2024 and apply those changes from 14 November 2024. The changes to the Single Resolution Mechanism (SRM) Regulation (806/2014) (the “SRM Regulation”) will be directly effective while the changes giving resolution authorities the power to set internal MREL on a consolidated basis applied from 13 May 2024, and the changes in respect of Liquidation Entities applied from 14 November 2024.

Liquidity

The liquidity cover ratio (the “LCR”) introduced by the Basel Committee on Banking Supervision requires banks to maintain sufficient unencumbered high-quality liquid assets (“HQLA”) against net cash outflows over a 30-day period. The purpose of the ratio is to ensure that a bank has sufficient capital to meet any short-term liquidity disruptions that may affect a particular market. HQLA are only assets that can be converted easily and quickly into cash, such as cash, treasury bonds or corporate debt.

There are three categories of HQLA. They are as follows.

• Level 1 assets which are not subject to a discount while calculating the LCR.
• Level 2A assets which are subject to a discount of 15%.
• Level 2B assets which are subject to a discount of 50%.

No more than 40% of HQLA can comprise of Level 2 assets with Level 2B assets comprising no more than 15% of all total stock of HQLA.

Irish banks are also subject to a longer term stable funding requirement introduced as a ratio of an institution’s available stable funding to its required stable funding over a one-year period (the “NSFR”). The NSFR obliges banks to hold sufficient stable funding to meet its funding needs over a 12-month period, both in normal and stressed conditions. Basel III requires the NSFR to be no lower than 100% on an ongoing basis.

The domestic legislation in respect of the insolvency, recovery and resolution of Irish banks largely developed as a result of the impact of the 2008 financial crisis. Under Part 7 of the Central Bank and Credit Institutions (Resolution) Act 2011 (the “2011 Act”), the CBI can apply to the High Court for an order to liquidate a bank in any of the following circumstances:

• if the CBI believes that the liquidation would be in the public interest;
• the bank is unable to meet its obligations to its creditors;
• the bank has failed to comply with a direction of the CBI;
• the bank’s licence or authorisation has been revoked; or
• the CBI considers that it is in the interest of deposit holders that it be wound up.

No person can apply to have a bank wound up without giving the CBI prior notice and receiving approval from the CBI. Only a liquidator approved by the CBI can wind up a bank. As soon as practicable after the court makes a winding-up order, the CBI will appoint a liquidation committee to oversee the winding-up process. Subject to the 2011 Act, the normal provisions of Irish company law apply to liquidations of banks.

Where a bank has a reasonable prospect of survival, the Companies Act 2014 (as amended) allows the CBI to petition to appoint an examiner to an Irish bank. Examinership is a process that enables arrangements to be made with creditors of a company in difficulty to facilitate its survival.

The EU has also developed a legislative framework in respect of the insolvency, recovery and resolution of EU banks. The CBI would most likely utilise the toolkit provided under the European Union (Bank Recovery and Resolution) Regulations 2015-2020 (the “BRRD Regulations”) where an Irish bank is in financial difficulty. The BRRD Regulations provide a framework for resolving failing banks and enables authorities to intervene early to prevent the failure of an institution. The BRRD Regulations:

• provides that banks are required to prepare recovery plans that identify options that can be executed in the event of a significant financial deterioration of the institution, thereby reducing the likelihood of failure;
• grants a set of early intervention powers to supervisors, including the requirement for institutions to execute recovery options, the removal of management and changing the structure of the institution; and
• provides for resolution planning activity to be undertaken by the CBI or the European Central Bank’s Single Resolution Board (the “SRB”) in advance of failure to ensure that this process is managed effectively.

Under the BRRD Regulations, the CBI is the national resolution authority for Ireland. For banks designated as significant under the Single Supervisory Mechanism, the SRM Regulation divides the recovery and resolution tasks for those banks between the SRB and the CBI as the Irish national resolution authority. The SRB will exercise some of the powers that would otherwise be exercisable by the CBI under the BRRD Regulations if a significant Irish bank fails or begins to fail.

It is a condition of using a resolution tool that there is no reasonable prospect that any alternative private sector measures or supervisory action would prevent the failure of the institution within a reasonable timeframe, having regard to timing and other relevant circumstances.

A High Court order, on the application of the CBI, is required to apply any of the resolution tools to a bank or otherwise where the CBI wishes to have a liquidator appointed to an institution. This will be necessary irrespective of whether an institution is directly overseen by the CBI or the SRB. The CBI must engage with the Minister for Finance in certain situations, including making the proposed resolution order.

When resolution tools are put in place or resolution powers exercised, the bank’s shareholders will bear first losses. Creditors generally bear losses after the shareholders in accordance with the priority of their respective claims under normal insolvency proceedings. Creditors of the same class are to be treated equally and the “no creditor worse off” principle means that no creditor should incur losses greater than it would have incurred had the bank been wound up under normal insolvency proceedings. Covered deposits are also protected.

Once a resolution order is made, four resolution tools are available. They are:

• bail-in;
• sale of business;
• bridge institutions; and
• asset separation.

To implement a resolution tool, the CBI is required to obtain a resolution order. A resolution order can cover a number of different transactions to give effect to the relevant resolution tool, including:

• the transfer of shares;
• the transfer of assets and liabilities;
• the reduction of principal under a capital instrument;
• the cancellation of debt instruments (other than secured liabilities);
• the close-out or termination of financial contracts; and
• the removal and replacement of management by a special manager.

The BRRD Regulations and the SRM Regulation aim to implement the “Key Attributes of Effective Resolution Regimes for Financial Institutions”.

The CBI issued an approach paper called “Central Bank of Ireland’s Approach to Resolution for Banks and Investment Firms (Second Edition) October 2021” (the “Approach Paper”), which outlines the Central Bank’s resolution mandates, powers and available discretions and its approach to resolution under various pieces of legislation including the SRM Regulation, CRR and the BRRD Regulations. The Approach Paper applies to credit institutions within the scope of the BRRD Regulations that are less significant institutions (“LSIs”) and are not part of a “cross-border group” as defined in the SRM Regulation and certain other prescribed entities, within the SRM, where the CBI has principal responsibility as resolution authority for resolution decisions.

The Approach Paper, notes that while there are several ways in which bank failures can be addressed the most likely approach for the majority of failing institutions is through a CBI-involved winding-up (liquidation) procedure involving a petition by the CBI to the Irish High Court to wind up the relevant institution.

Deposits

The DGS provides protection for eligible depositors of a bank authorised by the CBI if that entity is unable to repay its deposits. As outlined in 6.1 Deposit Guarantee Scheme (DGS), the protection is limited to EUR100,000 of an eligible deposit per person in a bail-in scenario. The BRRD Regulations also amend the Companies Act 2014 to afford a preference to certain depositors over unsecured creditors in the scenario where a BRRD institution is liquidated.

In recent years, ESG matters have become more prominent in the Irish banking and financial sectors. As a member of the EU, Ireland has an obligation to abide by EU-wide regulations and policies which focus on ESG issues. There has been a movement in the EU towards transparency and responsibility by all banks and credit firms in the financial services industry.

EU Sustainable Finance Disclosure Regulation

The primary source of ESG-related banking regulations in Ireland stems from the EU Sustainable Finance Disclosure Regulation (the “SFDR”) which came into effect in 2021. The SFDR aims to increase transparency in the investments sector in relation to sustainability. It sets out a new set of disclosure requirements applicable to financial market participants, including banks in Ireland.

The SFDR requires Irish banks to provide detailed disclosures about the sustainability characteristics of their products, which in turn will assist investors in making more informed choices as to their investments. Under the SFDR, Irish banks must disclose how they incorporate sustainability risks into their investment decisions.

The EU Taxonomy Regulation

The EU Taxonomy Regulation entered into force in June 2020 and established a classification or taxonomy system which provides businesses with a common language to identify whether or not a given economic activity should be considered “environmentally sustainable”. Irish banks must align with the EU Taxonomy Regulation when determining the sustainability of loans, products or investments.

The EU Taxonomy Regulation requires Irish banks to take greater accountability through regularly reporting on how their lending and investment activities align with sustainable objectives.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (the “CSRD”) entered into force in January 2024 and replaced the Non-Financial Reporting Directive. The CSRD has enhanced the scope and detail of ESG disclosures which are required from companies, including Irish banks.

The CSRD requires entities to employ a robust internal framework for sustainability reporting, capable of adapting to changing requirements and withstanding rigorous external scrutiny. The CSRD also requires Irish banks to include sustainability reporting disclosures across ESG topics within their annual management report covering both financial impacts and impacts on people and the environment. The European Union (Corporate Sustainability Reporting) Regulations 2024 which came into force in Ireland on 6 July 2024 transposed the CSRD into Irish law.

ECB Climate Stress Tests

Irish banks, under the supervision of the CBI will be subject to climate stress testing, as part of the broader European banking supervision framework. In light of the promotion and implementation of stringent ESG standards, the ECB has incorporated climate change considerations into its supervisory practices. The stress testing evaluates both physical risks relating to climate change-related disasters, and transition risks which may arise due to a low-carbon economy.

The results of the tests will be used to ensure that Irish banks are maintaining sufficient capital in order to manage any risk.

Sustainability Promotion by the CBI and Green Finance Initiatives

The CBI has played an increasingly active role in ensuring that ESG factors take importance in the strategies employed by Irish banks. The CBI has had to acknowledge the importance of ESG factors in more recent years and its accountability in ensuring Irish banks are aligning with sustainability objectives.

In 2021, the CBI published a “Dear CEO” letter which provided specific guidance to banks and financial institutions in Ireland in respect of climate-related and environmental risks. The CBI outlined its aim to focus its supervisory expectations in five key areas: governance; risk management; scenario analysis; strategy and business analysis risk; and disclosures. The guidance also largely reflected the ECB’s supervisory expectations and the increasing responsibilities that Irish banks now have to adhere to environmental and social standards.

The CBI, alongside the Irish government, supports broader sustainability initiatives aimed at fostering a more sustainable economy. The CBI also announced the establishment of its Climate Risk and Sustainable Finance Forum, which seeks to bring stakeholders together to share knowledge and understanding of the implications of climate change for the Irish financial system.

The CBI continues to actively collaborate with the EBA on its Sustainable Finance Action Plan and working towards enhancing ESG risk disclosures and incorporating ESG risks in the supervisory and evaluation process.

Irish Domestic Legislation

Ireland has taken several domestic steps to enhance its regulatory approach to ESG in the banking sector. The Climate Action and Low Carbon Development (Amendment) Act 2021 sets ambitious targets for Ireland’s transition to a low-carbon economy. It provides for targets, yearly budgets and a commitment to achieve a net-zero carbon emissions for 2050.

This legislation has implications for Irish banks, as there will be an increasing expectation to finance projects that support this transition.

Given the development of digital banking, the Digital Operational Resilience Act (“DORA”) comprising Regulation (EU) 2022/2554 on digital operational resilience for the financial sector and Directive (EU) 2022/2556 as regards digital operational resilience for the financial sector was published in the Official Journal of the EU on 27 December 2022. DORA is designed to strengthen the IT security of financial entities including Irish banks to ensure that Irish banks will be resilient against operational disruptions.

DORA introduced rules applicable to a wide range of regulated financial entities (including banks) regarding information and communication technology (ICT) risk management, ICT-related incident management, classification and reporting, digital operational resilience testing, and managing of ICT third-party risk (including an oversight framework for critical ICT third-party service providers).

Digital operational resilience means the ability of a financial entity to build, assure and review its operational integrity and reliability by ensuring, either directly or indirectly through the use of services provided by ICT third-party service providers, the full range of ICT-related capabilities needed to address the security of the network and information systems which a financial entity uses, and which support the continued provision of financial services and their quality, including throughout disruptions.

DORA entered into force on 16 January 2023 and will apply as of 17 January 2025. The application of DORA will be supplemented by technical standards which were issued in two batches that provide regulatory guidance in respect of certain key areas under DORA.

DORA applies to a board range of contracts which relate to the use of ICT services being digital and data services provided through ICT systems to one or more internal or external users on an ongoing basis including hardware as a service and hardware services which include the provision of technical support via software or firmware updates by the hardware provider, excluding traditional analogue telephone services.

Certain key elements of DORA are as follows.

• Financial entities must have an internal governance and control framework that ensures the effective and prudent management of ICT risks, to achieve a high level of digital operational resilience. The entity’s management body bears the ultimate responsibility for managing its ICT risk, in particular defining, approving, overseeing and being responsible for the implementation of all arrangements related to the entity’s ICT risk management framework.
• Financial entities must maintain and update an information register regarding all contractual arrangements on the use of ICT services provided by ICT third-party service providers. DORA also sets out requirements for contractual arrangements with third-party service providers, and additional requirements for third-party services supporting “critical or important functions”.
• Financial entities are required to report major ICT-related incidents to their competent supervisory authority and are encouraged to report significant cyber threats. The key obligations in respect of any incident reporting are:
1. ICT-related incident management processing;
2. classification of ICT-related incidents and cyber threats;
3. reporting of major ICT-related incidents; and
4. voluntary notification of significant cyber threats.
• Financial entities are required to ensure that contracts for ICT services include a description of all the services and whether subcontracting of an ICT service supporting a critical or important function is permitted and on what conditions.
• Financial entities must establish, maintain, and review a sound and comprehensive digital operational resilience testing programme as an integral part of the ICT risk management framework. DORA sets out prescriptive requirements in respect of:
1. testing of ICT tools and systems;
2. advanced testing of ICT tools, systems and processes based on threat-led penetration testing (“TLPT”); and
3. testers for carrying out TLPT.
• Financial entities may exchange cyber threat information and intelligence amongst themselves, provided such information and intelligence sharing:
1. aims to enhance the digital operational resilience of financial entities;
2. takes place within trusted communities of financial entities; and
3. protects the potentially sensitive nature of the information and complies with GDPR requirements.

Compliance of Irish banks with DORA will be supervised by the CBI. Under DORA the CBI will have all supervisory, investigatory, and sanctioning powers necessary to fulfil their supervisory duties, including the power:

• to access, receive or take copy of any document or data in any form;
• to carry out on-site inspections and investigations, including summoning individuals for explanations or interviews; and
• to require corrective and remedial measures for breaches of DORA.

Member states must also establish penalties and remedial measures for breaches of DORA, to include at least the following.

• Orders requiring the banks to cease any conduct or activity which contravenes DORA and to prevent any repetition of that conduct.
• Introducing measures, including fines, to ensure that firms comply with DORA.
• Requiring, subject to national law, data traffic records held by a telecommunications operator where there is a reasonable suspicion of a breach of DORA.
• Issuing public notices, including public statements indicating the identity of the institution and the nature of the breach.
• The ability to impose the relevant sanctions on senior management or any other individual who is responsible for the breach of DORA by a firm. These enforcement powers are in addition to any action the CBI may take against senior members of a regulated entity under any other rules or legislation that may apply to the relevant entity.

There are multiple impending developments that will affect Irish banks. The following are a handful of some of the more significant regulatory developments that will impact Irish banks.

National Cyber Security Bill 2024

The Irish government published the General Scheme for the National Cyber Security Bill on 30 August 2024. Once finalised and enacted, the Bill will:

• transpose the Network and Information Security Directive EU 2022/2555 (the “NIS2 Directive”) into Irish law;
• establish the general framework for Ireland’s national cybersecurity strategy; and
• establish Ireland’s National Cyber Security Centre on a statutory basis and set out its mandate and role.

The NIS2 Directive is the EU-wide legislation on cybersecurity. It promotes and harmonises measures to boost the overall level of cybersecurity in the EU. The deadline for EU member states to transpose the NIS2 Directive into national law was 17 October 2024.

The NIS2 Directive forms part of a package of measures to improve the resilience and incident response capabilities of public and private entities, competent authorities and the EU as a whole in the field of cybersecurity and critical infrastructure protection. These entities include banks. Entities regulated under the NIS2 Directive are categorised as “Essential” or “Important” depending on factors such as size, industry sector and criticality.

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 closed on 17 September 2024. Most of CRR III will be directly effective from 1 January 2025 (other than the provisions which amend the calculation of own funds requirements for the market risk regime which are due to have direct effect from January 2026).

The two national discretions which are the subject of the consultation are Article 92(3) (which gives member states 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 states 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).

Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (the “Companies Act”)was enacted on 12 November 2024. The Companies Act is designed to enhance and strengthen governance, enforcement and regulatory provisions in the Companies Act 2014.

The Companies Act focuses on four main company law areas: corporate governance; company law enforcement and supervision; administration; and insolvency.

Once enacted, the Companies Act allows for advancements in corporate governance. Two designated activity companies will be able to merge under the Companies Act 2014’s merger by absorption provisions. Currently, at least one of the companies must be a limited company. The Corporate Enforcement Authority (the “CEA”) will be given new information gathering powers including changes to the powers available to the CEA for seeking additional information from auditors following an indictable offence report.

The Companies Act also:

• facilitates the execution of documents under seal to be done in counterparts;
• facilitates the holding of AGMs in two or more venues whether inside or outside of the state using any technology that provides members with a reasonable opportunity to participate and generally facilitates the holding of electronic general meetings; and
• clarifies certain reporting obligations on auditors in respect of company law offences.

In respect of company administration, a person will be required to apply to the registrar to act as an electronic filing agent. Where a company is availing of the summary approval procedure, a copy of the declarations will also need to be delivered to the registrar. Additional obligations will be imposed on receivers to provide information to the registrar and the time limits for provision of this information and returns will be shortened in several instances.

Irish Corporate Governance Code

Euronext Dublin has published an Irish Corporate Governance Code. The Code is designed to allow for greater flexibility to adapt and evolve as the corporate, legal, and economic climate changes, ensuring that governance standards remain relevant and effective for the Irish market.

The Code will apply to Irish companies listed on the regulated market of Euronext Dublin for accounting years commencing on or after 1 January 2025. However, given the large number of dual-listed companies with a UK and an Irish listing and to reduce the reporting burden for these companies they will have the choice to adopt the Irish Code or the UK Code under the proposed changes to the Euronext Dublin listing rules.

Markets in Crypto-Assets

Markets in Crypto-Assets (“MiCA”) was published in the Official Journal of the European Union in June 2023. It became applicable to issuers of asset referenced tokens and electronic money tokens in June 2024 and will become applicable to providers of crypto-asset services on 30 December 2024.

MiCA brings crypto-assets under a pan-EU regulatory framework that seeks to ensure increased transparency, investor protection and financial stability. It prescribes uniform requirements for the offering and admitting to trading of crypto-assets and for crypto-asset service providers (“CASPs”). These rules include transparency and disclosure requirements, authorisation and supervision requirements, requirements for the protection of holders of crypto-assets and the clients of CASPs, and measures to prevent market abuse such as insider dealing or market manipulation.

MiCA establishes a more comprehensive financial services regulatory framework than the current virtual asset service provider regime. While there are therefore similarities between virtual asset services and crypto-asset services, where an entity is providing crypto-asset services from 30 December 2024, they will require authorisation as a CASP.

Finance Act 2024

The Finance Act 2024 contains changes to the Irish legislation implementing the EU Directive ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in Europe. The Finance Act 2024 incorporates elements of the third set of OECD Administrative Guidance published on 18 December 2023.

The Irish legislation incorporating this anti-avoidance for certain hybrid arbitrage arrangements will apply to fiscal years beginning or after 31 December 2024 to hybrid arbitrage arrangements entered into after 15 December 2022.

The Finance Act 2024 also includes revisions to Irish transfer pricing rules for the purpose of simplifying certain elements of these rules.

The Finance Act 2024 clarifies the application of the 6% rate of stamp duty to residential property. The increased rate of stamp duty on bulk purchases of residential units has also been included in the Finance Act 2024.

These new rules will affect instruments executed on or after 2 October 2024, subject to a transition period of three months for instruments executed before 1 January 2025 where the instrument contains a prescribed statement, certifying that the instrument was executed solely in pursuance of a binding contract entered into before 2 October 2024.

The European Accessibility Act (Directive (EU) 2019/882)

The European Accessibility Act (Directive (EU) 2019/882) (the “EAA”) has been implemented into Irish law through the European Union (Accessibility Requirements of Products and Services) Regulations 2023 (the “EAA Regulations”) and will apply from 28 June 2025.

The EAA harmonises accessibility requirements across the EU to ensure that certain products and services are accessible to all, particularly those with disabilities. It sets out comprehensive requirements for a wide range of products and services including ATMs; smartphones; banking services; e-books; e-commerce services; and telecommunications. It emphasises the need for accessible design, ensuring that people with disabilities can fully participate in the digital economy and everyday life without barriers.

The EAA Regulations provide that a service provider may, up until 28 June 2030, continue to provide their services using products which were lawfully used by them to provide similar services before that date. Service contracts agreed before 28 June 2025 may continue without alteration until they expire but no longer than five years from that date.

The Irish Regulations set out that Ireland will be implementing an exemption for self-service terminals such as ATMs and payment terminals which are used lawfully by service providers for the provision of services before 28 June 2025. These terminals may continue to be used in the provision of similar services until the end of their economically useful life but no longer than 20 years after their entry into use.

The Finance (Provision of Access to Cash Infrastructure) Bill 2024

The Finance (Provision of Access to Cash Infrastructure) Bill 2024 (the “Access to Cash Bill”) was published by the Department of Finance on 31 July 2024.

It was published following recommendations made as part of the November 2022 Retail Banking Review Report published by the Department for Finance. The key elements of the Access to Cash Bill include the following.

• Cash infrastructure is to be maintained at (approximately) December 2022 levels.
• The Minister for Finance will be able to set regional criteria for access to ATMs to ensure access to cash.
• The Minister for Finance will be authorised to make regulations banning or capping access fees for withdrawals from Irish ATMs by individuals and SMEs with EU bank accounts.