Central Bank misses investment firms target amid ‘Brexodus’ deluge

The Central Bank has said it fell short of its own target in the processing of applications for certain investment firms in the second half of last year as it dealt an increase in complex submissions related to Brexit.

The bank’s latest regulatory services standards performance report, published on Thursday, showed it achieved an 88 per cent performance level in the processing of eight applications for investment firms under the so-called markets in financial instruments directive (MiFID) in the last six months of 2018. That was just shy of its 90 per cent target.

MiFID firms include asset and wealth managers, broker dealers and investment product manufacturers.

“Increased application volumes in the context of Brexit, together with the complexity of some applications challenged the [Central Bank’s] asset-management authorisation, advisory and client asset division’s ability to review initial submissions within 40 business days,” the report said, adding that achieved this in 63 per cent of cases during the period, against a 90 per cent objective.

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Targets

The division also has targets for responding to comments and final submissions from firms seeking authorisation.

Still, the Central Bank met its authorisation service standards in all the other 38 categories outlined in the report. This includes one section dealing with 14 applications for management companies for investment funds known as undertakings for collective investment in transferable securities, and another covering 10 filings for self-managed investment companies. Not all applications relate to Brexit.

Central Bank deputy governor Ed Sibley told a meeting of the organisation's board last November that it has had to "reprioritise" its normal supervisory work as the regulator draws on resources to deal with a spike in authorisations relating to Brexit. IDA Ireland had also said that asset managers account for more than half of the 100-plus Brexit-related applications that the Central Bank has received.

Mr Sibley said on Thursday that the bank had seen an increase in the number of applications in almost every sector.

“Currently over half of the Brexit applications received have been fully processed and we expect that an additional significant number will be processed in full over the coming weeks,” he said. “Firms who submit applications that demonstrate compliance with the requirements, and fully engage with the authorisation process are now being authorised.”

The authorisation service standards report covers new authorisations but not the assessments of material changes to existing business in Ireland, which would exclude large expansion plans by UK banking group Barclays and Bank of America Merrill Lynch in Dublin to deal with the fallout from Brexit.

No new banking authorisation filings were being dealt with by the Central Bank during the six months under review.