On 28 May 2025, the Central Bank of Ireland (“Central Bank”) published the latest edition of its Investment Firm and Intermediary Newsletter (“Newsletter”). The Newsletter covers topics of interest, significant work and regulatory issues that retail intermediary firms, MiFID firms and crowdfunding service providers (“CSPs”) need to be aware of.

Some key highlights from this edition include:

Intermediary Insights

• Review of retail intermediaries operating on the basis of a fair or limited analysis of the market

As set out in the November 2024 Investment Firm and Intermediary Newsletter, the Central Bank carried out a thematic review (”Review”) on whether retail Intermediaries  provide services to consumers on the basis of a “fair” or “limited” analysis of the market, as per the definition of these terms in Chapter 12 of the consumer protection code (“CPC”). For more information, see FIG Top 5 at 5 dated 12 December 2024.

That Review has now concluded and the Newsletter outlines that the findings of the Review are mainly positive, with most firms demonstrating good standards of compliance as regards effectively informing their consumers of the fair or limited nature of their service, and providing accurate disclosures. One area highlighted as requiring improvement was around the use of the term “independent”. Individual feedback has been issued to all in-scope firms with the Central Bank expecting to publish sectoral communication, detailing the findings of the Review, later this year. 

• Retail intermediary annual return (“RIAR”)

In view of the fact that many firms are due to submit RIARs in the coming weeks, the Newsletter provides guidance to assist in their timely submission as regards common issues encountered when using the Central Portal.

• Online authorisation application form for retail intermediaries

The Newsletter provides an update on the Central Bank’s new online application form, launched in September 2024, for firms seeking authorisation with the “A Form”. For more information, see FIG Top 5 at 5 dated 26 September 2024.  Further, the Newsletter sets out that the Central Bank is currently considering how it could reduce the number of steps and streamline the process and will make such improvements over the Summer. After this, it is expected that the original word ‘A Form’ application will be removed from the website and only online forms will be accepted going forward.

• Motor insurance – driver number

The Newsletter reminds firms that any person taking out a new motor insurance policy or renewing an existing policy, from 31 March 2025, is legally required to provide their driver number and the driver number of anyone named on the policy.

MiFID Insights

• Supervisory review and evaluation process capital assessment under IFR / IFD

  The Newsletter provides an update on a webinar held by the Central Bank in January 2025 for all IFR / IFD Class 2 investment firms in respect of the capital assessment process under the IFR / IFD supervisory review and evaluation process (“SREP”).  Some of the matters addressed include:

  • the European Banking Authority (“EBA”) and the European Securities and Markets Authority (“ESMA”) guidelines on the SREP process aimed at supporting firms and supervisors in carrying out and reviewing ICAAPs / ICARAPs; 
  • the EBA technical standard on the setting of additional capital requirements - pillar 2R; and 
  • a consideration of the pillar 2 requirement and the pillar 2 guidance.
• Common supervisory action on the MiFID II sustainability requirements

  The Central Bank has completed the thematic review of investment firms’ application of the MiFID II Marketing Communications disclosure requirements by firms providing investment services to retail clients. This thematic review was considered in more detail in FIG Top 5 at 5 dated 17 October 2024.

  The Central Bank expects to publish an industry communication, providing feedback to industry on its findings and expectations, after ESMA has published a report outlining an aggregate view of the findings of the common supervisory action later this year.

• ESMA call for evidence

The Newsletter highlights ESMA’s call for evidence on the retail investor experience. For more information, please see the update below, entitled, “ESMA launches call for evidence on understanding retail participation in capital markets”.    

Crowdfunding Insights

• ESMA market report - crowdfunding in the EU 2024

The Newsletter provides a summary of ESMA’s first market report on the EU crowdfunding market, noting the aim of the report as being to describe how the European crowdfunding sector has developed and also to promote a comprehensive understanding of this alternative form of financing and investment.

• Thematic review of CSP marketing material and other key investor information

The Newsletter details that the Central Bank is currently carrying out a thematic review of CSPs’ marketing material and other key investor information, noting that this thematic review aligns with the Central Bank’s protection of consumer and investor interests safeguarding outcome. The Newsletter highlights that the review will be particularly focused on social media marketing and advertising by CSPs to investors and the presentation to investors of the risks to capital posed by such investment.

Policy Updates

• DORA  
  • the Newsletter sets out that, so far, the Central Bank has received approximately 20 DORA ICT-related major incidents and that analysis of these and of future reported ICT incidents will transform the Central Bank’s knowledge, preparedness and responsiveness; and
  • the Newsletter notes that firms have been submitting their registers of information (“RoIs”) since April this year and further states that the Central Bank will analyse the submitted RoIs with a focus on ICT providers to Irish regulated financial entities, which will aid the Central Bank’s understanding of critical or important services delivered by Irish financial entities that depend on ICT third-parties.  The Newsletter emphasises that it is essential for firms to ensure effective oversight of all their outsourcing arrangements on an ongoing basis.

• EU Accessibility Act (“EAA”)

Some of the matters highlighted are as follows:

• the EAA is effective from 28 June 2025, introducing accessibility requirements for in-scope products and services;
• the Central Bank has responsibility for ‘consumer banking services’ within the meaning of the EAA;
• the scope of the EAA will include both MiFID investment firms and certain retail intermediary firms; and
• firms should be assessing the EAA to determine the impact (if any) for their business and to plan for any operational changes required.

Central Bank Insights

Some the matters considered under this heading include:

• the Central Bank’s new supervisory framework – for more information, see FIG Top 5 at 5 dated 6 March 2025;
• the CPC review – for more information, see FIG Top 5 at 5 dated 27 March 2025. The Newsletter highlights that the Central Bank expects MiFID firms to consider and apply the Guidance on Securing Customers’ Interests in the context of fulfilling their obligation to “act honestly, fairly and professionally in accordance with the best interests of [their] clients” in accordance with Regulation 31 of the MiFID Regulations. Additionally, MiFID firms are expected to consider the guidance, direction and learning for firms set out in the Guidance on Protecting Consumers in Vulnerable Circumstances.
• the Central Bank’s regulatory and supervisory outlook report (“Report”) – for more information, see FIG Top 5 at 5 dated 6 March 2025. The Newsletter particularly emphasises those parts of the directly applicable to MiFID investment firms and retail intermediaries;
• the Fitness and Probity (“F&P”) Review – for more information, see FIG Top 5 at 5 dated 17 April 2025. The Newsletter highlights a planned industry event for Friday 30 May 2025 as regards the F&P gatekeeping process, recent enhancements to the F&P regime with a specific focus on the revised PCF assessment process.
• the Financial Services and Pensions Ombudsman (“FSPO”) 2024 overview of complaints report – for more information, see FIG Top 5 at 5 dated 3 April 2025.

The Newsletter advises firms to consider the FSPO report, together with the Central Bank’s 2025 Regulatory and Supervisory Report, to identify where there might be weaknesses in their complaints handling process or any areas for improvement, in the context of their obligations under the 2012 CPC.

1. Central Bank updates DORA communications and publications webpage

On 23 May 2025, the Central Bank of Ireland (“Central Bank”) updated its dedicated DORA communications and publications webpage (“Update”).

This Update follows on from the previous update of 28 April 2025, concerning the correction of validation issues identified by the European Banking Authority (“EBA”) regarding DORA register of information (“RoI”) submissions. For more information, see FIG Top 5 at 5 dated 8 May 2025.

The Central Bank notes that there has been an increasing number of successfully submitted files over the course of last week and encourages firms to continue efforts to address the validation issues in advance of the 30 May 2025 deadline.

To assists firms in these efforts, the Central Bank has updated its “system how to guide” (“Guide”), highlighting links to a new guidance document which, it states, will assist in addressing common errors identified by the EBA in the data validations. 

2. Finance (Provision of Access to Cash Infrastructure) Bill 2024 is signed into law 

On 21 May 2025, the Finance (Provision of Access to Cash Infrastructure) Bill 2024 (“Bill”) was signed into law by the President of Ireland.

This follows on from the Bill’s passage through all stages of the Oireachtas on 13 May 2025. For more information, see FIG Top 5 at 5 dated 22 May 2025 .

Next Steps

The Finance (Provision of Access to Cash Infrastructure) Act 2025 is subject to ministerial order(s) as regards its coming into operation.

1. Director Gerry Cross of the Central Bank delivers speech addressing MiCA, Innovation, the SIU and Tokenisation

On 27 May 2025, Director of Capital Markets and Funds at the Central Bank of Ireland (“Central Bank”), Gerry Cross, delivered a speech (“Speech”) at the Blockchain Ireland Summit 2025.

The theme of the Speech centred around the role of regulation and supervision in the safe and enduring adoption of innovation into the financial system.

The Director focused on the following matters:

Central Bank engagement with firms in the implementation of MiCA

Director Cross outlined the Central Bank’s commitment to realising the benefits of the EU regulatory framework for crypto-assets while ensuring risks are well managed, noting that the Central Bank’s authorisation process for crypto-asset service providers (“CASPs”) aims to ensure effective implementation of the MiCA regime in Ireland while also being aware of business demands and the 12 month transition period.

The Director gave an update as regards the implementation of MiCA, stating that the first wave of authorisation key facts documents and formal applications from applicant CASPs have been received by the Central bank and are being progressed. Director Cross highlighted that the Central Bank’s authorisation process is informed, developed and refined by its supervisory experience and also by benchmarking with peer EU national competent authorities (“NCAs”). For more information on the CASP authorisation process, see FIG Top 5 at 5 dated 13 March 2025.

The Director took the opportunity to reiterate the expectations of the Central Bank, stating that the following will be of key interest to the Central Bank when it comes to regulating the sector:

• firms’ business models and their approach to governance and accountability;
• consumer protection – noting the publication of the revised Consumer Protection Code, for more information, see FIG Top 5 at 5 dated 27 March 2025. The Director also pointed to the fact that risks to consumers are inherently in the crypto sector. Importantly, Director Cross stated that firms seeking authorisation should understand that, where it sees higher inherent investor protection risks in the products offered to customers and investors, it will have higher expectations of firm’s ability to manage these risks;
• risk identification and mitigation; and
•  AML / CFT.

The Director gave a summary of the recent Central Bank MiCA industry engagement in March 2025 and other activity, emphasising that such industry engagement allows the Central Bank to explain its approach to implementation, and its areas of focus, all with a view to achieving a well-functioning and robust crypto sector that secures customers’ interests.

Director Cross also considered the European context, highlighting the collaboration with the European Supervisory Authorities (“ESAs”) and other NCAs to ensure the effective and harmonised application of MiCA together with convergent authorisation and supervisory practices across the EU. The Director explained that such work has resulted in real time sharing of authorisation experiences and approaches in NCAs, including the fostering of convergence as to whether proposed business models are fully compliant with the MiCA framework.

The Director also referenced the stated intention of the European Banking Authority (“EBA”) to clarify the interplay between PSD2 and MiCA, stating that that work is expected to conclude in the short term and further stating that if any additional steps are required for applicant CASPs on foot of that expected clarification, the Central Bank will engage directly with relevant firms.

Innovation Sandbox and the Innovation Hub

Director Cross discussed the Central Bank’s Innovation Sandbox, citing it as a good example of the role of the Central Bank in encouraging collaboration across the ecosystem in a way that promotes better outcomes for consumers and the financial system. As regards the Central Bank’s innovation hub, the Director noted that it helps innovators developing financial services using new technologies to navigate the regulatory landscape. He stated that the Central Bank’s innovation hub report 2024 is due to be published very soon and provided some statistics from 2024, including that in 2024 almost a quarter of enquiries came from firms using blockchain technology.

European Commission’s recently published Strategy on the Savings And Investment Union (”SIU”)

Director Cross considered the SIU from the perspective of funding innovation. He referred to the Draghi Report and its statement of the need to accelerate innovation and to close the innovation gap with global counterparts especially in advanced technologies. The Director welcomed the SIU strategy as it takes “a holistic approach to improving investment and financing, emphasising the need for dynamic local ecosystems, and for measures at both EU and national levels.”

The Director stated that, as regards the role of regulation, the necessary ecosystem cannot be regulated into existence and that it is important that firms and investors continue to invest in technology and to innovate.

Director Cross then moved to discuss the capital markets participation of EU citizens as another aspect of the SIU. He highlighted that investing necessarily involves risk and that in that regard, the aim must be for investors to be well informed, to understand potential risks as well as potential benefits and to be treated fairly.

Market Infrastructure and Tokenisation

Finally, Director Cross discussed the interaction between financial market infrastructure and new technologies such as distributed ledger technology (“DLT”) and tokenisation. Some of the matters highlighted include:

• the European Commission’s (“Commission”)  stated aim, in its SIU strategy, of leveraging such technologies as regards enhancing the interoperability, interconnection and efficiency of EU trading and post-trading infrastructures;
• the testing of three interoperability-type solutions for using DLT to settle wholesale financial transactions in central bank money by the Eurosystem in 2024; and
• the Commission’s current targeted consultation on the integration of EU capital markets, for more information, see FIG Top 5 at 5 dated 17 April 2025.
  

2. Deputy Governor at Central Bank, Vasileios Madouros delivers speech on navigating economic “cross currents”

On 23 May 2025, Deputy Governor for Monetary and Financial Stability at the Central Bank of Ireland (“Central Bank”), Vasileios Madouros, delivered a speech (“Speech”) at UCC as part of a Central Bank outreach visit.

The theme of the speech centred around the impact of global shocks on Ireland’s economic outlook, how global events are shaping the economic outlook and the implications for domestic economic policy.

Having discussed the forgoing in detail, the Deputy Governor addressed policies in order to navigate these “cross currents”, noting that there is a need to be “clear-eyed on the risk and laser-focused on the opportunities.” Deputy Governor highlighted five areas as follows:

• commitment to a sustainable fiscal anchor – highlighting the importance of a sustainable fiscal stance that operates counter-cyclically and also the need to broaden the tax base;
• addressing infrastructure deficits – noting that Government policies to support infrastructure development are key to maintaining competitiveness as is, in that regard, prioritising capital expenditure;
• contribute to the strengthening of the EU – here the Deputy Governor emphasised the importance of enhancing the single market and establishing a savings and investment union to boost productivity and support Europe’s ability to absorb shocks. He also highlighted the need to implement the Department of Finance’s Funds Review recommendations  to strengthen retail participation in capital markets in Ireland;
• enable expansion into new markets and support open trade globally – noting that the preservation of openness is vital for Ireland, highlighting the need for Ireland to “be a strong voice in Europe in support of efforts to expand the network of free trade agreements.”; and
• safeguard resilience of finance – the Deputy Governor referred to the focus on the potential costs of complexity as regards regulation and the efforts in respect of simplification, emphasising that while the Central Bank welcomes simplifying the regulatory framework, it must not be at the cost of financial resilience.

1. ESMA launches call for evidence on understanding retail participation in capital markets  

On 21 May 2025, the European Securities and Markets Authority (“ESMA”) launched a call for evidence (“CfE”) on the retail investor journey, specifically, understanding retail participation in capital markets.

The CfE is mainly addressed to:

• investor and consumer organisations;
• investment firms, credit institutions, and other entities subject to the markets in financial instruments directive (“MiFID II”) when providing investment services; and
• trade associations and other stakeholders involved in financial regulation, investor education, and retail investment market developments.

ESMA highlights that the aim of the CfE is to gather feedback from relevant stakeholders regarding key aspects of the investor journey, particularly as regards the MiFID II regulatory requirements that impact retail investors in their engagement with capital markets.

Firstly, the CfE considers non regulatory barriers to retail investor participation and then examines specific regulatory requirements that directly impact retail investors, as follows:

• regulatory disclosures – looking at whether disclosures, such as costs and charges / product risks, are structured in such a way that informed decision making is supported or if investors are overwhelmed by excessive complexity;
• suitability assessment – here, the CfE seeks to gather input on the information collected by firms to assess whether investment products align with an investor’s investment objectives / financial situation / knowledge and experience / sustainability preferences. The CfE also considers whether firms are striking the right balance between investor protection and accessibility / simplicity;
• appropriateness assessment – the CfE is seeking to assess whether the knowledge and experience test required for non-advised services is effective and also whether firms are striking the right balance between investor protection and accessibility / simplicity.

Trends

The CfE also addresses specific trends affecting retail investor engagement. Some of the matters covered include:

• why younger investors are more drawn to speculative and volatile assets  over traditional investment products;
• whether digitalisation and certain influences, such as social media / perceptions of low barriers, contribute to this trend; and
• how the increasing shift to online platforms and mobile apps affects investor engagement.

Next Steps

The CfE is open for feedback until 21 July 2025. ESMA has stated its intention, in Q3 2025, to consider whether specific regulatory changes or clarifications may be necessary based on the feedback received, with the aim of enhancing investor protection and retail engagement in financial markets.

2. Commission proposal to amend MiFID to support small mid-cap enterprises

On 21 May 2025, the European Commission (“Commission”) published a proposal (“Proposal”) for a directive as regards extending certain mitigating measures available for small and medium sized enterprises (“SMEs”) to small mid-cap enterprises (“SMCs”).

Background

The Proposal forms part of the Omnibus IV simplification package and is also part of the Commission's wider work regarding the need to rationalise and simplify reporting requirements for enterprises and administrations, particularly, as regards the Commission’s commitment to:

• make business easier and reduce administrative burden by 25% and 35% for SMEs; and
• extend proportionality in EU law to small SMCs.

Proposal re MiFID II

The Proposal aims to extend the  proportionality that exists for SMEs to SMCs, as regards administrative burden, for enterprises that are three times the size of SMEs in a number of legal acts that already contain mitigating or supporting measures for SMEs.

Specifically, as regards MiFID II, the following measures are proposed:

• the addition of a definition of an SMC in Article 4(1). It will define SMCs as a category of enterprises, distinct from SMEs;
• article 33 requires that at least 50% of the issuers whose financial instruments are admitted to trading on the multilateral trading facility (“MTF”) are SMEs at the time when the MTF is registered as an SME growth market and in any calendar year. The Proposal will allow the operator of an MTF, applying to have its MTF registered as an SME growth market, to demonstrate compliance with the minimum threshold based on both SME and SMC issuers admitted to trading on SME growth markets. The Commission has stated that this will allow SMCs to benefit more from access to SME growth markets.

Additional Measures

The Proposal also contains measures under the directive on the resilience of critical entities (“CER”). Article 4 requires that each member state must adopt a strategy for enhancing the resilience of critical entities by 17 January 2026. In this strategy, member states must provide a description of measures already in place which aim to facilitate the implementation of certain obligations by the SMEs that are identified as critical entities. The Proposal aims to draw attention to SMCs by extending this obligation for member states, so that they also describe such measures for SMCs, in case they exist.

Documentation

The Commission has also published:

• a factsheet on SMCs;
• a Commission working document on SMCs;
• a Commission recommendation on the definition of SMCs, together with an annex; and
• Q&As.  

3. Delegated Regulation on OTC derivatives identifying reference data under MiFIR published in OJEU

On 22 May 2025, Commission Delegated Regulation (EU) 2025/1003 (“Delegated Regulation”) was published in the official journal of the European Union (“OJEU”).

The Delegated Regulation supplements the markets in financial instruments regulation (“MiFIR”) as regards OTC derivatives identifying reference data to be used for transparency requirements under MiFIR. 

The Delegated Regulation was adopted by the European Commission on 24 January 2025, for more information, see FIG Top 5 at 5 dated 30 January 2025. 

Next Steps

The Delegated Regulation will enter into force and apply from 11 June 2025, being 20 days following publication in the OJEU. 

On 21 May 2025, the Central Bank of Ireland (“Central Bank”) published the written decision of the Irish Nationwide Building Society (“INBS”) Inquiry (“Inquiry”) together with a market commentary (“Commentary”) regarding the outcome of the Inquiry. 

Decision

Mr John Stanley Purcell, a former executive board member of INBS has been disqualified for four years from being concerned in the management of any regulated financial service provider and has been directed to pay a €130,000 penalty. He has also been reprimanded as regards his conduct. The decision of the Inquiry is subject to confirmation by the High Court.

Market Commentary

In the Commentary, the Central Bank highlights the Inquiry decision as significant as it is the first decision of an inquiry concluded under the Central Bank Act 1942.

The Commentary sets out the background to the Inquiry, noting that it delivered its findings in April 2024 and held a sanctions hearing in October 2024, culminating in the publication of the written decision, referred to above.  

The decision of the Inquiry is also addressed in the Commentary, some of the matters highlighted are as follows:

• INBS was run in a seriously deficient manner in relation to its commercial lending, credit risk and associated corporate governance;
• the breaches by INBS were of a serious and systemic nature, and related to commercial lending which made up the majority of INBS’s loan portfolio;
• in view of the seriousness of the improper banking practices involved and their potential to pose serious risks to financial markets and consumers, the Inquiry decided that significant sanctions were warranted; and
• the cost to the Irish taxpayer for INBS was €5.4 billion.

The Commentary also includes a section on the importance of the Central Bank’s investigation and Inquiry into INBS, highlighting matters such as:

• there is a clear onus on senior role holders to take responsibility for and drive good governance and positive culture from within;
• the Central Bank is now operating in an improved regulatory environment, highlighting legislative enhancements that have resulted in more intrusive supervisory, investigative and sanctioning powers / improvement of the Central Bank’s ability to pursue individuals directly / clear standards and requirements for individual accountability within firms;
• the Inquiry shaped improvements in how the Central Bank conducts such cases, with the Central Bank continuously reflecting on want could be done better as the Inquiry progressed, developing improvements to both its internal investigative and inquiry processes. Specifically, it is noted that procedures developed during the Inquiry provided the foundation for the procedures adopted in subsequent inquiries and informed the development by the Central Bank of the 2023 Administrative Sanctions Procedure Guidelines; and
• the Inquiry influenced improvements and investment in technology, in-house investigative, legal and data management capabilities.

Key Statutory Mechanism

The Commentary highlights inquiries as a key statutory mechanism allowing the Central Bank to assess suspected breaches, make relevant determinations and impose sanctions. Further, it is emphasised that the ability of the Central Bank to bring inquiries to a conclusion is critical to the effectiveness of its enforcement regime, which supports its supervisory functions and is a key component of its approach to financial regulation.

Additionally, it is highlighted that it is critical that firms and individuals understand that the Central Bank will use the full extent of its powers to pursue cases to their conclusion and to hold relevant individuals to account.

Regulatory Environment

The Commentary describes the investigation and Inquiry as regards INBS as having had an enduring and positive effect on the Irish regulatory environment, with it being noted that the legislative, procedural and operational enhancements to the administrative sanctions procedure enable the Central Bank to deliver on its mission of ensuring that the financial system operates in the best interests of consumers and the wider economy.