End of Year Update 201920 December 2019
By Pat Lardner
As the year (and the decade) come to a close we would like to thank our members, partners and all our stakeholders for their support and engagement during the year. It has been a really eventful one with much success, and lots left to do in 2020. Below are some snippets of key activities and milestones from during 2019.
Strong asset growth buoyed by increased sales of Irish domiciled funds
The latest headline figures from the Central Bank of Ireland (CBI) to the end of September show that total net assets were up 20% on 2018 for the first three quarters of this year for Irish domiciled investment funds, which now stand at a record €2.925 trillion. There were also net sales of over €200 billion into Irish domiciled funds for the same period. View the recent statistics.
Regulatory and Advocacy Developments
ILP – The Investment Limited Partnerships (Amendment) Bill 2019 completed the Committee and Report stages in the Dáil (Ireland’s lower house of parliament) this month and now moves to the Seanad (upper house) in January where we anticipate it will be completed in the first few weeks of the next sitting. There has been a significant effort by many to get this legislation completed and, while the end of 2019 target has not been achieved, we hope for good news early next year and will continue to engage actively with all relevant stakeholders as we know there is clear demand from managers to choose Ireland in this space as they continue to do for most of their other products.
Sustainable Finance – In November, Irish Funds participated in Climate Finance Week Ireland 2019, signing a Statement of Intent on sustainability and organised and held a successful investment funds event. We are working with stakeholders on the EU policy proposals and recently provided input on proposals in relation to an ESG reporting framework for corporates. Next year and the coming years will bring a strong focus on sustainability as we mobilise as an industry to prepare for the new EU framework.
CP86 – We have been closely following the CBI’s work on reviewing the implementation of CP86 and continue to do so. We have asked the CBI to share their insights as they proceed through the process and understand that it will likely be Q2 next year before we see the outputs from this work. We will continue to actively look to create opportunities to enrich your understanding of the evolving landscape.
Liquidity – There has been an increasing regulatory and industry focus on liquidity management throughout 2019. In September ESMA released guidelines on liquidity stress testing in UCITS and AIFs which set out to increase the standard, consistency and, in some cases, frequency of liquidity stress tests and promote convergent supervision of these tests by NCAs. Our Investment Risk Working Group (WG) is considering the implementation of these guidelines and Irish Funds will continue to engage on liquidity, which will be a focus for ESMA and the Central Bank in 2020. We will look to publish guidance for members in this area before next summer.
CP130 – The CBI issued a consultation paper in relation to the treatment, correction and redress of errors in investment funds. Industry had a roundtable discussion with the CBI and responded to the consultation, highlighting areas which weren’t addressed within the paper.
AML/CTF – The CBI issued their guidelines and feedback statement for the financial sector during summer 2019. The AML working group are reviewing the guidelines and identifying areas where some additional commentary might be helpful. Industry has and continues to be actively engaged in relation to the implementation of the Beneficial Ownership Registers. Clarification was provided by the CRO that foreign beneficial owners who do not have PPS numbers do not need to be assigned one. We continue to monitor the operation of the CRO beneficial ownership register and will maintain our relationship with the CRO.
UCITS Performance Fees – Irish Funds responded to the ESMA consultation paper on performance fee guidelines in UCITS in October. The objective of the guidelines is to promote greater convergence and standardisation in the field of performance fees and promote convergent supervision by NCAs. We will continue to engage on developments in this area in 2020.
Closet indexing – We engaged with the CBI with respect to the CBI’s thematic review of closet indexing as well as supporting EFAMA’s engagement with ESMA on implementation issues relating to the ESMA’s Q&As on benchmarks. We will continue to engage on this issue and the clarity which is needed from the Central Bank/ESMA.
Depositary Books and Records – The Depositary WG met with the CBI and provided a submission as to how industry will comply with EU Commission expectations in relation to Books & Records. The CBI confirmed that they are satisfied with the approach outlined in the submission but have asked for industry guidance in relation to the reconciliation process. The Depositary Working Group are in the process of drafting principled based guidance to assist industry.
EU Affairs Updates
Irish Funds Opens Brussels Office - Recognising the importance of regularly engaging with policymakers in Brussels in order to enhance our advocacy efforts, Irish Funds opened a Brussels office in June this year and welcomed Umar Ahmed as Head of EU Affairs. Given the wider Brexit context and challenges that may emerge as a consequence, it is essential that Irish Funds is engaging early and often with key decision makers.
Over the last six months, we have established our presence in Brussels and developed relationships with key EU officials in the European Commission, European Parliament and Member State Permanent Representations. The network we are building in Brussels means that Irish Funds now has better access to decisionmakers, political and legislative/regulatory intelligence. In January, we are planning an official launch event for our new office with the keynote address being given by Sean Berrigan, Deputy Director-General, DG FISMA. If your firm would like more details and is interested in having a representative attend, please contact us at firstname.lastname@example.org.
New European Commission – New European Parliament - The Von der Leyen Commission took office on December 1st. Commissioner Dombrovskis retains responsibility for the Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) though he now has a wider remit as an Executive Vice-President). In his first weeks in office he has stated on numerous occasions that sustainability will be at the core of all financial services policy this term. The new Commission published a Communication on the European Green Deal on December 11th, setting out ambitious legislative plans for the coming years, including a renewed Sustainable Finance Strategy by Q3 2020. The Commission will try to move the Capital Markets Union forward with the aim of increasing retail investor participation and channelling funding to European SMEs – watch out for consultations in the first half of next year. We are also closely following developments on the upcoming and potential reviews of AIFMD, MiFID and UCITS, where the changing dynamic in European policymaking as a result of Brexit may play a significant role.
With a new Commission also comes some senior personnel changes within the Directorates-General. Olivier Guersent will be leaving DG FISMA as its Director-General at the beginning of the new year when he will take of the top job at DG COMP (Competition). Nathalie de Basaldua has been appointed as Principal Adviser to the new Director-General of DG FISMA, who is still to be announced (we are closely monitoring senior personnel shifts in DG FISMA).
The new European Parliament saw significant turnover with 60% of prior term MEPs not returning, which resulted in a substantial influx of new members to the ECON committee. There will be a lot of work that industry needs to do with MEPs on how our industry works and its positive impact on the Irish and broader EU economy. We are starting to get a sense of where the Parliament will focus when it comes to financial services legislation and unsurprisingly there is a strong focus on sustainable finance, capital markets union, anti-money laundering, cryptocurrencies and fintech. The European Parliament’s political composition is incredibly fragmented with the four pro-EU political families (EPP, S&D, RE and Greens) needing to work together to build compromise and pass legislation. We expect unified positions in Parliament to be harder to reach this term.
Brexit is set to take place on 31 January 2020, a little over 6 weeks away at the time of writing, and with increased certainty now around the political process following the UK General Election, it looks almost certain that the UK will leave under the terms of the previously agreed withdrawal agreement, which provides for a transition period until 31 December 2020.
For funds wishing to avail of the FCA’s Temporary Permissions Regime, if required, they should note that the notification date has been extended to 30 January 2020. Any fund managers that, as a result of this extension, wish to update their notification before the notification window closes on 30 January 2020, should email email@example.com by the end of 15 January 2020 at the very latest. Further information on the TPR can be found on the FCA website.
In the case of no deal Brexit on 31 January, data processing and data flows between the UK and the EU may require additional specific contractual requirements. The Data Protection Commissioner in Ireland has produced guidance on transfer of personal data from Ireland to the UK in the event of a ‘No-Deal’ Brexit.
The Irish Funds Brexit Steering Group has prepared a non-exhaustive list as a guide for identifying some of the main issues which may arise during Brexit planning.
The Central Bank have also advised that the new date to submit updated fund documentation, if required, to ensure funds are prepared for Brexit, is 6 January 2020 in order to be in place for the 31 January 2020. Such updates may include, inter alia, amendments to the list of regulated markets to remove references to the United Kingdom as a European Union market or policy updates as required to clarify the geographical focus of a UCITS or Retail AIF.
Our members / member engagement
A growing member community – 17 new members have joined the association in 2019, bringing our total membership to 146. We now have 67 asset management firm members, which form the largest member cohort. (45%)
Member Engagement Lunches – We had 52 member firms attend lunches in 2019, with 40 signed up so far for 2020. These are an excellent way to network with senior industry peers, provide us with a valuable opportunity to get your feedback and receive updates on topical matters. If you haven’t yet registered for one please contact firstname.lastname@example.org
Communications Champions (CCs) – There are now more than 50 Irish Funds member CCs as this initiative continues to grow. CCs help communicate, promote and increase engagement throughout your organisation and awareness of Irish Funds resources, events and updates. For more information on becoming a Communications Champion for your firm, please contact email@example.com.
Irish Funds Lunch and Learns – These are held by member firms to inform and engage their own staff about the association and the resources available. Several firms have taken part in this new initiative this year, with more planned for 2020. There is a Powerpoint available for guidance on our member portal. If you are interested in holding your own Irish Funds Lunch and Learn, you can contact Alison Manley at Alison.L.Manley@goodbody.ie.
New member portal dashboard – We have redesigned the dashboard on our portal (which is exclusive to members) to facilitate viewing new resources easily. The member portal continues to be a success with over 2,000 distinct users from 134 member firms registered, accessing nearly 2,000 document resources. Members who do not currently have access to this important information resource can register here.
Autumn newsletter – Read articles written by members on factor-based strategies, ETFs, institutional platform innovation, technology, sustainable finance, CSR activities and more.
Technical briefing – Irish Funds will be holding a member technical briefing on the CSDR (Central Securities Depositories Regulation) on the afternoon of Tuesday, 14 January. Find out more / register. This follows on from a range of briefings held in 2019 - we will be hosting a number of these throughout 2020.
Focus on Sustainable Finance
ESG Working Group - We established our ESG Working Group to develop industry’s sustainability agenda, consider the EU’s Sustainable Finance Package as well as the innovation, talent and skills needed in our industry regarding sustainability.
Climate Finance Week 2019 - As part of the Climate Finance Week 2019 programme of events, we held a briefing session on ‘Sustainability and the Funds Industry - the Challenge and Opportunity Ahead’. Earlier in the day, I joined other industry leaders in a pledge to take action to mitigate climate change risk through sustainable finance. Find out more.
ESG Newsletter – The ESG WG and Communications & Publications WG coordinated an online-only ESG-focused newsletter in the run up to Climate Finance Week 2019. View the ESG Newsletter.
Sustainathon 2020 Information Event - The Grant Thornton Irish Funds Sustainathon will involve entrants from across the Irish funds industry and third level students working together to identify and propose solutions that drive sustainability. This competition will ask teams to identify and assess achievable and impactful measures that industry can implement to help realise these goals. An Information Event will be taking place on Wednesday, 15 January – find out more and register on the Grant Thornton event page.
The funds industry and the broader community
Dublin Northeast Inner City (NEIC) Work Placements in the funds industry – expressions of interest January 2020 - We hope to build on the success of last summer’s work placement programme. Expressions of interest will be circulated again in January for the summer 2020 programme. During the summer of 2019, 20 young people from the NEIC secondary schools participated in a summer work placement in 11 funds industry organisations, including Irish Funds. Six Dublin inner city post-primary schools participated in the programme and all schools have had students placed on the programme. Read more about last summer’s programme coordinated by Business in the Community (BiTC).
The Trinity Centre for People with Intellectual Disabilities (TCPID) – During 2019, Irish Funds engaged with the TCPID to explore student work placement and internship opportunities for their graduates across our member community. In early 2020, Irish Funds will re-engage to explore further ways to collaborate and to promote business partner opportunities with TCPID that will support further development of their education programme for students as well as new internship opportunities for graduates.
TCPID has been providing educational and training programmes since 2004, with over 120 graduates to date. In 2016, the TCPID developed a two year Level 5 Certificate in Arts, Science and Inclusive Applied Practice with a strong emphasis on the transition from education into employment through focused work readiness content and practice. Through their network of business partners who provide essential financial and practical support, TCPID continue to develop innovative educational opportunities for students.
Shine a Light Night Focus Ireland - On Friday, 18 October Yvonne Connolly and Lisa Kealy as Chair and Vice Chair of Irish Funds participated in a one night to sleep-out for Focus Ireland's Shine a Light Night. They raised €36,000 from the funds community to support Focus Ireland in the fight against homelessness. Focus Ireland is Ireland's leading not for profit working to prevent people becoming, remaining or returning to homelessness. We will look to deepen our involvement in this important issue in 2020.
Continued support for funds industry charity basis.point - basis.point was founded in 2013 as the charity initiative of the Irish funds industry. It plays a key role in the CSR programmes of a large number of leading firms within the sector. Focusing on children and young people from disadvantaged communities, they work closely with six leading charities to empower children through education. Find out more about basis.point and making a lasting impact in disadvantaged communities.
Future skills and lifelong learning
Institute of Banking (IOB) launch of a funds designation in 2020 – With support from Irish Funds, IoB is launching an exciting new development, the first ever professional funds industry designation. This is a landmark move and one that fully embraces and promotes high professional standards and life-long learning. Access to the programme will be through a ‘designation’ with continuous professional development at its core via a blended learning model.
The designation will be available to industry professionals who have completed the benchmark industry qualification, The Professional Certificate in International Investment Fund Services, a three-module, level 7 programme, accredited by University College Dublin. In addition, for a period of one year, those who have over four years relevant experience and who meet the programme competencies through industry experience, will be eligible to apply for the designation. We are encouraging member firms to seriously consider the designation and for more information about this please contact firstname.lastname@example.org.
Preparing for the future –Identifying, recruiting and developing talent is at the core of our industry. Bringing new and diverse talent pools into the industry is the fuel for tomorrow’s success. Following from the positive response to our first funds industry profiles early in the year, the Talent & Skills Working Group have led the development of second funds industry career profile series to be launched in January.
Regional Engagement and the Indecon Economic Impact Assessment
Following the publication of the Indecon Report earlier in the year, Irish Funds engaged in a Regional Roadshow across Ireland. From May to September 2019, we held roundtable events with business leaders, politicians and other industry participants in seven counties across the country.
These regional events sought to highlight the key findings of the report and the positive impact the funds industry is having in terms of employment and economic contribution throughout the country.
- Regional employment opportunities across a significant number of our major cities and towns
- 150+ companies directly employing over 16,000 people in 10 different counties
- The Irish funds industry makes a €14 billion contribution to economic output nationally which is dispersed in communities across Ireland
- Almost 33,000 total employment impact across the country
- The funds industry contributes €837 million annually in direct taxes to the exchequer
The impressive growth and strength of Ireland’s regional funds offering is something we are very proud of and will continue to actively support in 2020.
Promotional and Communications Activities
Sponsorship Opportunities 2020 - Irish Funds sponsorship is an opportunity to maximise your brand’s visibility to a global audience. There are a variety of sponsorship opportunities to suit your needs. Our experience from recent years is that the available sponsorship slots go quickly – we deal with them on a first-come, first-served basis. If you have any questions, please contact David Shirley at email@example.com or on +353 1 6753205 for more information. View Become a Sponsor on irishfunds.ie.
Irish Funds Annual Conference 2020 – Registration Opening in January – The Irish Funds Annual Global Funds Conference will take place on Thursday, 21 May 2020 at the Convention Centre Dublin. Early bird registration will open in January. In the meantime, check out our video on what’s waiting for you at next year’s annual conference:
Recent and upcoming events – The 7th Annual UK Symposium was our last international event of 2019 and continued to be a success with 550+ people attending the event. We are in Asia in the beginning of the new year and in the US (Philadelphia, Greenwich and New York) and London in the spring in our ongoing efforts to support managers and promote Irish funds across the globe. For more information or to register, visit our upcoming events section.
Website and social media activity – Traffic for the Irish Funds website reached over half a million page views in 2019 (an over 50% increase from 2018). Activity has also greatly increased on our social media channels. Reflecting this, LinkedIn followers grew 68% jumping to over 8,000 and twitter gained a 27% increase to 2,245 followers. Related to this increased focus on social media, the Communications and Publications WG have also released a hashtags guide for the Irish Funds brand on LinkedIn.
Thank you for your support
As the year ends and the holiday season is upon us, all the members of the Irish Funds team and I wish you, your colleagues and your families a restful and peaceful Christmas and every best wish for 2020. We are very grateful for your support throughout the year and we look forward to working together in the New Year.