BREXIT SIGNPOST. A Guide for Banking and Payments Institutions.

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Felicity Patterson
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1 BREXIT SIGNPOST A Guide for Banking and Payments Institutions

INTRODUCTION As the representative bodies for the domestic and international banks respectively in Ireland, Banking & Payments Federation Ireland (BPFI) and the affiliated Federation of International

2 INTRODUCTION As the representative bodies for the domestic and international banks respectively in Ireland, Banking & Payments Federation Ireland (BPFI) and the affiliated Federation of International Banks in Ireland (FIBI), wish to ensure that the opportunities and challenges presented by Brexit are appropriately addressed. The purpose of this document is to provide a simple one stop shop signpost for banking and payments institutions wishing either to establish new operations in Ireland or to expand existing operations. Time to market is a key metric in commercial decision making for any financial institution and ready access to the right information is a key factor in the process. This document shows how the two key agencies IDA Ireland and the Central Bank of Ireland can be of assistance. ABOUT BPFI Banking & Payments Federation Ireland (BPFI) is the voice of banking and payments in Ireland. Representing over 70 domestic and international member institutions, we mobilise the sector s collective resources and insights to deliver value and benefit to members, enabling them to build competitive sustainable businesses which support customers, the economy and society. Delivering a range of services through our specialist team, BPFI also offers an Associate network through which we offer many of the benefits of membership to the leading professional service firms that provide related advisory and consultancy services. ABOUT FIBI The Federation of International Banks in Ireland (FIBI) is the principal voice of the international banking and financial services sector in Ireland. An affiliate of Banking & Payments Federation Ireland (BPFI), the Federation members include many of the largest financial service providers in the world. Based in Dublin s IFSC and further beyond in all parts of the country, FIBI s members have developed over time to become some of the most significant contributors to the Irish economy. 2

3 HOW IDA IRELAND CAN ASSIST As the Government agency with a mandate to secure foreign direct investment into Ireland, IDA Ireland can assist in providing access to a range of key resources: Competitive Government incentive programmes A strong pool of international management capability A highly flexible, productive and adaptable workforce Cost-competitive talent across a wide range of functions and roles Access to the EU labour market and to a fast-track visa/ work permit process WHAT IRELAND HAS TO OFFER A bank authorised to provide services in another European Economic Area (EEA) state may operate in Ireland, either on a branch or cross-border basis subject to notification requirements. A third country bank wishing to provide services in Ireland alone can do so on a branch basis. Should that bank wish to passport those services to other EEA states, it can do so either by establishing an Irish-authorised bank or by acquiring an existing Irish-authorised bank. 3

4 Passporting applies in respect of the nine current European Single Market financial services directives which cover the following areas: Capital Requirements, Solvency II, Markets in Financial Instruments (MiFID), Alternative Investment Fund Managers (AIFMD), Undertaking Collective Investment Schemes (UCITS) and Payment Services. Ireland is a developed international financial services centre comprising: 400+ firms employing over 40,000 people; 17 of the top 20 global banks; a growing international payments cluster; and a leading financial technology location. Ireland s success to date is due to its good track record in its: - availability of a quality and flexible labour pool - ease and cost of doing business - its English speaking and common law jurisdiction - competitive corporation tax rate Ireland has increasing commercial office availability: million square feet (325,000 sq. meters) of prime office space currently under construction in Dublin for delivery over the next two years - An additional 900,000 square feet (84,000 sq. meters) of refurbished office space to be delivered over the next two years - 521,000 square feet (48,400 sq. meters) of office space due to come online over the next 12 months Ireland has a flexible work permit and visa system in place for non-eu skilled workers: - over 6,000 employment permits were issued in 2015 more than double the level in work permit applications for non-eu nationals are generally speaking processed within 10 working days - more than 550,000 non-irish people living in Ireland account for 12% of the population among the highest levels in the EU Contact: Katie Thurston Manager, Banking & Payments International Financial Services IDA Ireland katie.thurston@ida.ie 4

5 CENTRAL BANK OF IRELAND S AUTHORISATION PROCESS For banks seeking authorisation to locate banking operations in Ireland, or for banks already authorised here and seeking to expand their activities, the Central Bank of Ireland (CBI) will follow a thorough and robust assessment process. The CBI is committed to making this clear and transparent and to keeping it in accordance with the principles, processes and procedures of the Single Supervisory Mechanism (SSM). For smaller banks or less significant institutions (LSIs) - in Ireland these are typically less than 30bn in balance sheet size - the CBI will largely take the lead and will be the primary point of contact for banks seeking authorisation. However, engagement with ECB counterparts in the SSM will be maintained throughout the process. The CBI banking policy and authorisation team will lead the work and engage with the applicant bank through the authorisation process until a final decision by the Supervisory Board of the SSM is taken. Ongoing supervision thereafter will be led by CBI staff, with the SSM undertaking an oversight role. For larger banks that are likely to be classified as significant institutions (SI s) - in Ireland typically with a balance sheet size of greater than 30bn - the ECB staff within the SSM are likely to be more directly involved in the engagement with the bank during the application process, while also working with the CBI. Where a bank is making an application to establish a significant banking operation in Ireland, or to materially increase the existing banking operations of an existing licensed entity, this bank will be required to undergo a Comprehensive Assessment before transfer of direct supervisory responsibilities to the SSM. The Comprehensive Assessment will have two components: an Asset Quality Review and a Stress Test. The results of the Comprehensive Assessment will be published and, on passing the Assessment, the applicant bank will come under the direct supervision of the SSM. A joint supervisory team (JST) will be created, led by an ECB employee, but largely staffed by CBI personnel. The Comprehensive Assessment will require significant resources from both the bank and the regulator. It will typically take six months to complete. 5

6 Depending on the nature of an application, the CBI anticipates that the authorisation process as a whole could take a year to complete from preparation of the complete application, the engagement process that follows, to the final decision. The CBI publishes its Regulatory Service Standards Performance Report every six months. This report sets out the standards to which the CBI is committed in terms of dealing with authorisation applications in the different sectors and its performance against those standards. Click here for further information on steps in the CBI authorisation process as well as its most recent Regulatory Service Standards Performance Report. See also the following links for Brexit-related speeches by senior Central Bank personnel: Responding to the post-brexit environment, Director of Policy & Risk, Gerry Cross. Click here. Speech by Ed Sibley, Director of Credit Institutions Supervision, at Banking and Payments Federation of Ireland. Click here. Banking & Payments Federation Ireland, Nassau House, Nassau Street, Dublin 2, D02Y240, Ireland info@bpfi.ie Dublin Brussels Frankfurt 6

BANKING AND PAYMENTS FEDERATION IRELAND SUBMISSION ON NEW METHODOLOGY TO CALCULATE FUNDING LEVIES CP108

BANKING AND PAYMENTS FEDERATION IRELAND SUBMISSION ON NEW METHODOLOGY TO CALCULATE FUNDING LEVIES CP108 APRIL 2017 Introduction: Banking and Payments Federation Ireland (BPFI) welcomes the opportunity