Ireland: Mifid II ‘safe harbour’

Author: | Published: 21 Sep 2017
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Maples and Calder


75 St. Stephens Green Dublin 2 Ireland


+353 1 619 2000


+353 1 619 2001

On August 10 2017, the Irish government signed regulations implementing the Markets in Financial Instruments Directive 2014/65/EU and Regulation 600/2014/EU (Mifir), collectively known as Mifid II (Mifid II Regulations). These will come into effect on January 3 2018. The Mifid Regulations were passed following a period of consultation by the Minister of Finance on the continued operation of a 'safe harbour' whereby an investment firm is regarded as not operating in Ireland for regulatory purposes. Although the regime is altered in some peripheral respects, it has been substantially maintained. Accordingly, the updated regime will continue to provide third country firms with the now familiar legal comfort, certainty of access and ease of business in the investment services sector.

An investment firm with its head or registered office outside the European Economic Area (EEA) will not be regarded as operating in Ireland for the purposes of Mifid II provided that it has not established a branch in Ireland and only provides services to per se professional clients and eligible counterparties. The Minister of Finance will have the discretion to require a non-EEA firm to establish a branch in Ireland where the firm intends to provide services to retail clients and clients who opt to be treated as professional clients. The safe harbour will not apply where the firm is incorporated in a jurisdiction which is designated as non-cooperative by the Financial Action Task Force or is not a signatory to the International Organisation of Securities Commissions multilateral MoU on cooperation and exchange of information.

In conclusion, therefore, third country firms (for example, arrangers and managers to Irish securitisation sepcial purpose vehicles or non-EU investment advisors to regulated funds) can continue to provide services in Ireland without incurring substantial costs in determining on a case-by-case basis that they are complying with Irish law. The revised safe harbour will retain Ireland's attractiveness as the location of choice for a range of established products including regulated investment funds, securitisations, debt securities offerings and other structured products. Firms will need to investigate whether an Irish client (other than an eligible counterparty) is a per se professional client, or merely an elective one. However, the Irish position also respects the increased harmonisation and enhanced retail protection objectives of Mifid II.

John Breslin and Callaghan Kennedy

Maples and Calder
75 St. Stephen's Green,
Dublin 2, Ireland
T: +353 1 619 2000