Welcome to this week’s Technical Roundup.
In developments this week, the Financial Reporting Council has responded to the International Sustainability Standards Board’s request for feedback to inform future development of the IFRS Sustainability Disclosure Taxonomy for Digital Reporting and the European Securities and Markets Authority has this week published its latest edition of its Spotlight on Markets Newsletter.
Read more on these and other developments that may be of interest to members below.
Financial Reporting
The International Accounting Standards Board has published its proposals to update the IFRS for SMEs Accounting Standard. The updates are intended to reflect changes that have been made in full IFRS Accounting Standards while keeping the overall standard suitable for the small and medium entities that apply it. Comments are welcomed by 7 March 2023.
EFRAG, the European Financial Reporting Advisory Group has published its August 2022 monthly update.
The Global Preparers Forum (GPF) is seeking new members to join the GPF from 1 November 2022. Successful candidates are expected to participate for a term of at least two years, with a maximum term of five years.
Sustainability
The Climate Change Unit of the Central Bank has issued its latest Financial Stability Note and is titled “Climate Risks in the Financial System: An Overview of Channels, Impact, and Heterogeneity". Please click here for the press release which gives summary details of the note.
The International Organization of Securities Commissions (“IOSCO”) recently published its final report on retail investor education in the context of sustainable finance markets and products. The purpose of the report is to enhance investor education and protection and support the sound development of the sustainable finance market. It also includes educational activities that regulators should consider, and it includes some key messages that securities regulators should consider for their financial education programs, to help retail investors understand how a “smart investor” would behave when faced with sustainable finance products.
Auditing
IAASA has published a third video in a series designed to provide information on the Quality Management Standards in Ireland. This video provides an overview of the eight components of a system of quality management as set out in International Standard on Quality Management 1.
Previous videos recently published in the series are available on the IAASA YouTube channel, and there will be further videos available over the coming weeks, which will provide greater detail on ISQM 2 and ISA 220.
Anti-Money Laundering and Sanctions
IFAC, the International Federation of Accountants has issued its action plan to enhance the accountancy profession’s contribution to, and support of, a robust anti-corruption ecosystem.
The Anti-money Laundering and Counter Terrorism Financing, Example Red Flag Training Material, issued in May 2022 is a publication by a Joint Practice Group with GNECB and the Garda Financial Intelligence Unit, and the Irish accountancy bodies including Chartered Accountants Ireland. A second update has been made to this document in September 2022. The changes are mainly to provide an explanation of the use of the word “fungible “in case study 7, to ensure correct reference to “FIU Ireland” and “suspicious transaction reports” throughout the document and to reference a threshold for suspicion being reached (rather than breached). You can access the red flags updated document here and details are also included on our “red flags -know the signs” page on our AML hub which you can access here.
FATF’s recent webinar on Beneficial Ownership Transparency of Legal Persons which discussed new FATF obligations on beneficial ownership transparency, national experiences, challenges, and lessons and the role of private sector is now available to watch or listen to.
In its recent second report, the EBA has called for more proactive engagement between supervisors in anti-money laundering and counter-terrorist financing colleges to ensure ongoing collaboration and proactive information exchange. Colleges are permanent structures that serve to enhance cooperation between different supervisors involved in the supervision of cross-border institutions. In 2021, a total of 227 AML/CFT colleges were established and the EBA is a member of each college. In the report the EBA sets out its observations of good practices with an aim to help competent authorities to enhance their effectiveness in future, reminds the supervisors of the importance of consistent and timely exchange of information in colleges and emphasises the need for colleges to be organised in a more risk-sensitive manner.
On the same subject, the EBA has recently issued the latest EBA AML/CFT newsletter (Issue 8) which may contain some news items of interest to readers.
The UK FIU issued a recent reminder that Suspicious Activity Reports (SARs) are a vital source of intelligence that help detect and prevent money laundering, terrorist finance and all other types of crime and you can watch their latest video here to learn about the usefulness of SARs.
Chartered Accountants Ireland is currently regularly updating its webpage on sanctions. You can now read an update on the recent High Court judgment in the case of Pola Logistics Limited as plaintiff and GTLK Europe DAC, GTLK Malta Four Limited and Central Bank of Ireland (CBI) as defendants. The judgment is available free of charge from the Irish courts service website. The case which considered a number of matters provides some interesting insights into the role of CBI in the sanctions regime. Also on the webpage are details of a recent UK High court case (which readers can access free from the BAILII website). This case saw minority shareholders of London-listed gold producer Petropavlovsk failing to persuade an English judge to adjourn its sale to a Russian metals’ producer, days after he allowed the transaction to go ahead in the wake of UK and EU sanctions. See in particular the Appendix to the judgment which considers the application of the relevant sanctions’ legislation, the relevant UK sanctions legislation and the relevant EU sanctions regime.
Other areas of interest
The Financial Reporting Council (FRC) has published the list of signatories to the UK Stewardship Code (the Code) following its Spring 2022 assessment.
Following an extensive review process which considered organisations’ investment styles, sizes and types, 43 new signatories were added, taking the total number of signatories to 236, with assets under management (AUM) of £40.7tn, up from £33.3tn.
The Equality and Human Rights Commission, Britain’s national equality body (EHRC) has made tackling discrimination in Artificial Intelligence a major strand of its strategic plan for 2022-2025. EHRC has recently published new guidance to help organisations avoid breaches of equality law, including the public sector equality duty (PSED). The guidance gives practical examples of how AI systems may be causing discriminatory outcomes. Please also click the link here to read the EHRC news item on their strategic plan.
The Decision Support Service (DSS) has published a short video message on behalf of the Director of the DSS, Áine Flynn, to potential future service users, which outlines the current position on the progress of amending legislation to the Assisted Decision-Making (Capacity) Act 2015.
The Department of Enterprise, Trade and Employment has issued its September Enterprise newsletter recently. In it you can read about various items of interest including a proposal for a new law which will help to modernise the Employment Permits system in Ireland. Also read about the Screening of Third Country Transactions Bill which was published in August 2022. This legislation was drafted in response to the potential threat posed to security and public order from some third country investments and when enacted will establish a screening mechanism for third country investments into Ireland for the first time. It is also drafted to give further effect to an EU regulation on the matter. We will bring you more information on this draft legislation as relevant to members as it passes through the Dail.
For further technical information and updates please visit the Technical Hub on the Institute website.
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