EU Cross-Border

An EU Member State investment firm may provide investment services and ancillary services within the State if they are permitted under the firm’s authorisation in the home State. A Member State investment firm intending to provide investment services or investment services, together with ancillary services for the first time or change the range of services must communicate to its competent authority the following information:

• the firm’s intention to operate in the State;
• its programme of operations, in particular the investment services and ancillary services it intends to provide.
• whether it intends to use tied agents and if that is its intent , the identity of the tied agents.

The Central Bank may make public the identity of the tied agents where it receives the information from the other Member State’s competent authority.

A Member State investment firm may commence to provide the services, after the Bank has received certain information from the competent authority.  It may not provide in the State services until one month after the Bank has been informed of the intention to operate in the State by the competent authority of the Member State.

An investment firm intending to provide investment services or ancillary services in another State for the same time or change the range of services,  shall communicate accordingly to the Central Bank.  The Central Bank is to communicate the information to the other Member State.

The investment firm may commence to provide the services communicated to the Central Bank after the competent authority of the state in which services are to be provided confirms to the firm that it has the requisite information.

An EU Member State investment firm may provide investment services and ancillary services within the State through the establishment of a branch, if the services are permitted under the firm’s authorisation in its home State.

It must communicate to its competent authority

• details of the intention to establish a branch;
• the proposed programme of operations including organisational details,
• details of investment services
• proposed use of tied agents,
• details of persons who are to be managers of the branch.

The Member State competent authority is to communicate the information to the Central Bank.  It may commence to provide services above in relation to notified classes of service on the date Central Bank confirms to the firm the receipt of information from the home State or two months after the date on which the competent authority of the firm state communicated the information to the Central Bank whichever is earlier.  In both of the above cases, there is obligations to give notice of changes in the requisite information.

The conduct of business rules in the domestic regulations apply in respect of an investment firm that has established a branch in the State.  The Central Bank has the same powers, duties and responsibilities as it has in respect of a branch that has in relation to domestic investment firms.  In particular, it may examine branch arrangements and request changes as are necessary to enforce the Regulations.

There is an equivalent provision for an Irish investment firm seeking to establish a branch in another State.  It communicates the requisite information to the domestic regulator of the Central Bank which provides the equivalent information to the foreign regulator.

Unless the Central Bank has reason to doubt the adequacy of the administrative structure or the financial situation of an institution / investment firm that communicates as above, the Bank shall within three months, communicate to the competent authority of the host State, the information, details of the accredited compensation scheme and inform the investment firm in that regard.

Changes to the information communicated must also be notified.  If the Bank decides not to communicate the information, it shall give reasons to the investment firm within three months of receipt of the information.

Where an investment firm has established a branch in another State, the Central Bank can exercise its responsibilities and after informing the competent authority of the host State, may carry out onsite inspections in that branch.

Investment firms authorised in other states which are to execute client’s orders or deal on their own account have a right of membership of and access to regulate markets established in Ireland by means of setting up branches, becoming remote members or having remote access to regulated markets without being established in the State where the trading procedures and systems of the regulated market in question do not require a physical presence for conclusion of transactions in the market.  No additional regulatory or administrative requirement shall be imposed on investment firms exercising those rights.

Investment firms authorised in other States have right of access to the central counterparty, clearing and settlement systems in the State for the purposes of finalising and arranging finalisation of transactions in financial instruments.  The right of access is subject to the same non-discriminatory, transparent and objective criteria as applies to local participants.  It must not be restricted access to the clearing and settlement of transactions undertaken on a regulated market or an MTF in the State.

The market operator of a regulated market shall offer to all members and participants in the regulated market, the right to designate the system for the settlement of transactions in instruments undertaken in that market, subject to the links and arrangements between the designated settlement system and any other system or facility which are necessary to ensure the efficient and economic settlement of the transaction and agreement by the Central Bank that technical conditions for settlement of transactions concluded on a regulated market through a settlement system other than that designated by the regulated market are sufficient to allow the smooth and orderly function of financial markets.

There are obligations of the Central Bank to co-operate with the competent authority of other Member States where necessary for the purpose of carrying out the duties of other competent authorities under the Regulation or making use of the powers of those competent authorities whether set out in these regulations or on national law.

The Central Bank is to render assistance to competent authorities of the other EU states, by exchanging information and cooperating in any investigation or in supervisory activity. The Bank is to ensure it has the necessary administrative and organisational measures in place to facilitate cooperation and assistance under the MiFID Regulation.

There are reciprocal duties on competent authorities in relation to misconduct by regulated entities in other states.  If the Central Bank has good reason to suspect that acts have been carried out by entities not subject its supervision in the territory of another state, it is to notify the other state.

Where the Central Bank receives information from the competent authority of another state, it is to take appropriate action and inform the notifying competent authority of the outcome and to the extent possible of any significant interim developments.

A competent authority of one state may request the cooperation of the Central Bank in a supervisory activity, for on-the-spot verification or an investigation.  If the activity, verification or investigation relates to an investment firms that are remote members of a regulated market authorised by the Central Bank, it may choose to address the members directly and if the Bank chooses, it shall inform the competent authority of the home state accordingly.

The Bank shall supply competent authorities of other States with information on the identities of entities carrying out the duties of the Bank under these Regulations or may indicate that this information supplied must not be disclosed without the express agreement of the Central Bank.

The Bank is to cooperate in the exchange of information with other competent authorities.  There are provisions for control of confidential information.  There are very limited grounds on which the Central Bank may refuse to co-operate.  They are grounds related to judicial proceedings having been concluded or initiated in respect of the matter or grounds relative to sovereignty, security, or public policy of the State.

For statistical purposes the Central Bank may require investment firms with established branches in the State to report periodically on its activity.  It may require investment firms that have established branches to provide all information necessary for the monitoring by the Bank of compliance with standards set by the regulation.   The requirements are not to be more stringent than those imposed on authorised investment firms for monitoring compliance with the same standards.

Where the Central Bank is of the opinion that an investment firm that acts within the State under freedom to provide services or has established branches in breach of its obligations, it shall refer its findings in support of that opinion to the competent authority of the investment firm’s home State.

If, following referral the firm persists in acting in a manner which is in the opinion of the Bank, prejudicial to the interests of Irish investors or orderly functioning of Irish markets, the Bank, after informing the competent authority may take all the appropriate measures that are needed in order to protect investors and the proper functioning of the markets.  This may include preventing the investment firm from initiating any further transactions.  The Bank is to inform the European Commission without delay of any measures under the Regulation.

Where the Central Bank is of the opinion that an investment firm that has a branch, which is in breach of the obligations, it may require the investment firm to discontinue the breach as soon as possible.  It may take appropriate measures which must be communicated to the home State competent authorities.

Similar provisions apply in respect of a market operator and MTF established in another State and operating in the State  which is in breach of the obligations under the Regulations.

There is provision for exchange of information with third countries where there are appropriate protections in place.  The Central Bank may enter cooperation agreements providing for the exchange of information with

• third party authorities,
• bodies responsible for the supervision of credit institutions,
• financial organisations, insurance undertakings and financial markets.

It may exchange information with bodies

• responsible for liquidation and bankruptcy of investment firms in other States,
• carrying out audits, overseeing the bodies in relation to liquidation and those carrying out statutory audits.