Welcome to this week’s Technical Roundup.
In developments this week, the Institute’s Financial Reporting Technical Committee has responded to two International Accounting Standards Board (IASB) consultations in the past week. These consultations relate to the IASB’s third edition of the IFRS for SMEs standard and a temporary exception to IAS 12 relating to the potential effects of the OECD’s Pillar Two model rules on the accounting for income taxes.
Read more on these and other developments that may be of interest to members below.
Insolvency
The Corporate & Insolvency Bar Association is hosting its inaugural annual conference on Friday, 31 March. There will be a drinks reception and dinner taking place after the conference. The conference schedule and booking details are available here.
Financial Reporting
The Institute’s Financial Reporting Technical Committee has responded to two International Accounting Standards Board (IASB) consultations in the past week. These consultations relate to the IASB’s third edition of the IFRS for SMEs standard and a temporary exception to IAS 12 relating to the potential effects of the OECD’s Pillar Two model rules on the accounting for income taxes.
The European Financial Reporting Advisory Group (EFRAG) has also issued its response to the above IAS 12 consultation, as have the UK Endorsement Board (UKEB).
The UKEB have issued a call for comments on its draft endorsement of two narrow-scope amendments to IAS 1 (Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants). Comments are welcomed by the UKEB until 8 June 2023.
IAASA has published a summary of the outcomes of its examinations of financial reports completed in 2022.
Sustainability
The European Financial Reporting Advisory Group has issued a set of Basis for conclusions to compliment the first set of draft European Sustainability Reporting Standards.
The Minister for the Environment, Climate and Communications has recently launched a set of statutory guidelines to assist local authorities in preparing local authority climate action plans. Click here to read more details of the guidelines, Technical Annex A - Developing and Implementing the Local Authority Climate Action Plan, Technical Annex B - Climate Change Risk Assessment, Technical Annex C - Climate Mitigation Assessment: Baseline Energy Inventory and Technical Annex D - Decarbonising Zones.
Anti-Money laundering/Sanctions
The European Parliament recently published a briefing paper “EU sanctions on Russia: Overview, impact, challenges”. In it the briefing deals with a number of areas including EU sanctions on Russia: State of play, Sanction effectiveness: Alignment and enforcement, Economic impact of sanctions and the position of the EU Parliament. It lists the types of sanctions imposed and gives an overview of sanctions. It references the economic impact of sanctions. There is also reference to EU enforcement including the EU proposal for a directive on criminal offences/penalties for violation of EU restrictive measures. It also notes that the tenth package of sanctions introduced a new reporting obligation to ensure the effectiveness of the asset freeze prohibitions.
Readers may know that in March 2022, the FATF agreed on tougher global beneficial ownership standards in its revised Recommendation 24. It requires countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies. The FATF has now updated the guidance that will help countries implement the revised Recommendation 24. It writes that the guidance will help countries identify, design and implement appropriate measures in line with the revised Recommendation 24 to ensure that beneficial ownership information is held by a public authority or body functioning as a beneficial ownership registry, or an alternative mechanism that enables efficient access to the information and will also help countries assess and mitigate the money laundering and terrorist financing risks associated with foreign companies to which their countries are exposed. Click here to read a useful summary page on the guidance and to find a link to the guidance.
The Russian Elites, Proxies, and Oligarchs (REPO) Task force was set up shortly following the Russian invasion of Ukraine. It includes various countries and the European Commission. It recently issued a REPO Global Advisory identifying certain typologies of Russian sanctions evasion tactics and issuing recommendations to mitigate the risk of exposure to continued evasion. Typologies identified in the advisory include the use of family members and close associates to ensure continued access and control; the use of complex ownership structures to avoid identification and the use of enablers to avoid involvement and leverage expertise. Read more details in the Advisory on some of these headings and REPO recommendations including following FATF recommendations, complying with AML/CFT laws and regulations and reporting requirements and ensuring that risk assessments are kept up to date.
The UK National Crime Agency (NCA) recently issued its latest update of Guidance on submitting better quality suspicious activity reports (SARs).
Central Bank of Ireland
Following enactment of the Central Bank (Individual Accountability Framework) Act 2023 on 9 March, the Central Bank of Ireland (CBI) has recently launched a three-month consultation on key aspects of the implementation of the Individual Accountability Framework (IAF), including the publication of draft regulations and guidance. Click here to find more information in CBI’s press release. The draft regulations and guidance seek to provide clarity in terms of CBI expectations for the implementation of three aspects of the framework: the Senior Executive Accountability Regime (SEAR), the Conduct Standards and certain aspects of the enhancements to the Fitness & Probity regime. The full consultation paper, draft regulations and draft guidance are available on the CBI’s website. For convenience the links are set out below:
Consultation Paper 153 Enhanced governance, performance and accountability in financial services Regulation and Guidance under the Central Bank (Individual Accountability Framework) Act 2023.
Draft Regulations
Draft Guidance on the Individual Accountability Framework.
In relation to changes to CBI enforcement processes, the enhancements to CBI Fitness and Probity investigation, suspension and prohibition processes will be the subject of separate regulations and guidance which will be published once the underlying legal provisions have been brought into effect. As part of CBI’s phased plan, it will launch a second consultation in respect of changes to its Administrative Sanctions procedure later this year. The Central Bank has included information on proposed implementation periods. It says that to ensure a focus by firms on high quality implementation of the framework, the following implementation period timelines are proposed:
Conduct Standards including accountability of senior individuals for running their parts of the business effectively to apply from 31 December 2023;
Fitness & Probity Regime - Certification and inclusion of Holding Companies to apply from 31 December 2023;
Regulations prescribing responsibilities of different roles and requirements on firms to clearly set out allocation of those responsibilities and decision making to apply to in-scope firms from 1 July 2024.
The consultation will remain open for 3 months from 13 March 2023 to 13 June 2023. Responses should be addressed to IAFconsultation@centralbank.ie. and the following subject heading should be included in the email. “Consultation Paper on the Individual Accountability Framework”.
In other CBI news, its Consumer Protection Outlook Report 2023 was published recently. It outlines five key drivers of consumer risk for consumers of financial services in Ireland in this changing and challenging economic environment. Click here to read about them and for a helpful infographic on the subject.
CBI has also advertised that it will publish Guidance for (Re)Insurance Undertakings on Climate Change Risk on its website on Thu 16th March and we will provide that link when available.
The Pensions Authority and other pension matters
The Pensions Authority this week published updated guidance for determining assumptions used in pension benefit statements, as required under regulation 34(4) of the European Union (Occupational Pension Schemes) Regulations 2021. The update maintains consistency with recently revised guidance from the Society of Actuaries in Ireland in relation to pension projections. The latest version of the guidance is available on the pension benefit statement projection assumptions page of the Authority’s website.
Also this week the Pensions Authority issued a summary of its regulatory activity for 2022 which you can read here.
Readers should take note of an important issue about which the Law Society of Ireland has recently alerted the Pensions Authority and legal practitioners. It relates to the serious effect of new EU pension legislation on death-in-service benefits for former spouses. Please click here for a link to the Law Society’s website which provides the background. In summary the arising issue means that no payment will be made to the beneficiary of a Contingent Benefit Pension Adjustment Order on the death in service of a member of a scheme which has moved to a Master Trust. The Law Society has met with the Irish Pensions Authority and believes that the issue is of such severity that emergency legislation is required. It has also issued a bulletin to practitioners and made available a letter it wrote to the Pensions Authority both of which readers can access by following the above link to its website. Anyone who may potentially be affected by this issue should contact their pension and /or other professional adviser for further advice.
Other Areas of Interest
The Irish Dept. of Finance recently launched the 1st Action Plan from the updated Ireland for Finance strategy. The strategy sets out the key measures that the public and private stakeholders will take this year to support the further development of the international financial services sector in Ireland. Click here for a press release from the minister of state for financial services credit unions and insurance and here for the Update to Ireland for Finance The strategy for the development of Ireland’s international financial services sector, extended to 2026 Action Plan 2023.
The Department of Enterprise, Trade and Employment the national competent authority in Ireland with responsibility for enforcing national and EU controls on the export of sensitive items will host an online event for business and industry representatives about export control compliance inspections on 24 March 2023. These controls form part of a global framework designed to prevent the proliferation of weapons of mass destruction, to preserve regional stability and to protect human rights. Click here to find out more on DETE’s website including examples of sensitive items subject to export control and how to register for the event.
The DETE have issued their March Enterprise Newsletter which outlines current applications open re Disruptive Technologies Innovation Fund and Enterprise Ireland’s €63 million in funding programmes.
For further technical information and updates please visit the Technical Hub on the Institute website.
LOADING...