Central Bank of Ireland has today, Wednesday 26 June 2024, issued the first edition of the Authorisations and Gatekeeping Report. 

We posted about this on Linkedin here.  You can watch the movie of extracts from the Report here.

In this blog you can download a copy of the Authorisations and Gatekeeping Report (in the next link below and at end of blog).  We have copied and pasted the forward by Sharon Donnery, Deputy Governor, Central Bank of Ireland immediately below.

Foreword

Sharon Donnery, Deputy Governor, Financial Regulation 

I am very pleased to introduce the Central Bank of Ireland’s (“The Central Bank”) inaugural “Authorisations and Gatekeeping Report". The Central Bank regulates and supervises over 12,000 firms providing products and services in Ireland, the European Union (“EU”) and around the world. Our mission is to serve the public interest by maintaining monetary and financial stability while ensuring that the financial system operates in the best interests of consumers and the wider economy. 

A strong regulatory and supervisory framework, ensuring we have a stable, resilient and trustworthy financial sector, enables us to deliver on our mission for the public. Our gatekeeping role is an integral part of that framework – helping to ensure firms and individuals are of a sufficiently high standard to meet regulatory requirements and to be trusted with the public’s money. Since 2018, the Central Bank has either authorised or approved close to 12,000 applications across a range of financial service providers, prospectuses and regulated financial products and has approved over 18,000 applications for senior positions in the financial sector in Ireland as part of our Fitness and Probity (“F&P”) regime. In 2023 alone, we received almost 3,300 applications for authorisation or approval and over 3,300 applications for senior positions.

In order to ensure the system and the public are protected and that trust is maintained, gatekeeping, and the phrase “regulated by the Central Bank of Ireland”, has to mean something in terms of standards and reassurance to the people of Ireland. As such, the process needs to be robust, and the standard needs to be appropriately high. 

However, given the volume of applicants and the benefits of new entrants for consumers and the wider economy, to ensure the gate is not an undue barrier to entry it is also important that the process is efficient and that it is transparent.

As such in recent years as part of our ongoing commitment to efficiency and in the face of feedback that we could improve our clarity and responsiveness to incoming applications, we have increased engagement and significantly improved our processes. We have done this while maintaining the high standard the public expects of regulated providers of financial services and of us.

As I have said before this is not about prioritising speed over rigour, as the authorisation process is just the beginning of the regulatory and supervisory relationship, and our experience is that going through the gate too swiftly often presents issues on the other side.

Recognising that better prepared firms find the authorisation process the most straightforward, in addition to increasing the efficiency and transparency of our own processes we have improved our communications and have set clearer expectations for firms. This aims to deliver better and more complete applications to the benefit of both the applicants and the Central Bank, increasing the efficiency of the gate, while maintaining its robustness. Through this new report, we are providing further transparency to all stakeholders. The report sets out how we discharge and continue to refine our authorisation mandate by:

• Providing information on our authorisation framework and risk appetite;
• Explaining our priorities and expectations of applicant firms;
• Providing insight into the operation of the F&P regime; and
• Outlining the key challenges that we see for firms seeking authorisation. 

We hope it is useful for all stakeholders, and complements our other engagements and publications. Looking ahead, enhancing how we regulate and supervise across all sectors is a strategic priority of the Central Bank. This includes continuing to enhance our authorisation processes, in terms of clarity, predictability and transparency for those seeking to be authorised.

​We will continue to improve our own process as well as our engagement and communication with the sector. We also want to learn from experience and welcome feedback from stakeholders on our processes. 

END

Download the inaugural “Authorisations and Gatekeeping Report"

​We will be covering the topics of Central Bank of Ireland Authorisations and its role as Gatekeeper to the regulated Irish financial services community at the Fintech Ireland Summit taking place on Thursday 28 November 2024.  Read more here.

​Sign up to our Newsletter here.​

• Need assistance with an emoney or payments authorisation or an account information service provider or virtual asset services provider registration application, check out Fintech Ireland and CompliReg's handy authorisation guides at https://fintechireland.com/fintech-authorisations.html. 

LinkedIN Post here - https://www.linkedin.com/feed/update/urn:li:activity:7201146292276711425/​


Ramp Swaps (Ireland) Limited joins the Fintech Ireland Maps following its registration as a Virtual Asset Services Provider on 17 May 2024.

This increases the pool of regulated fintech in Ireland to at least 73, comprised of:
​

• 27 authorised electronic money institutions,
• 22 payments institutions,
• 6 standalone open banking firms,
• 13 virtual asset services providers, and
• 5 crowdfunding services providers. 

Ramp Swaps was registered on 17 May 2024 a Virtual Asset Services Provider.  It is the second VASP to be registered thus far in 2024 by the Central Bank of Ireland. The previous registered VASP was Fortuna Digital Custody (see previous blog).

Ramp Swaps was incorporated in Ireland on 25 April 2023. The company is the 13th firm to become registered to provide crypto services in Ireland. 

According to records at the Companies Registration Office, the directors of the company are are Szymon Sypniewicz and Przemyslaw Kowalczyk who are co-funders of the Ramp Group. The group was established to make web3 accessible to all. According to Forbes "They prioritize safety and compliance in crypto and have experience in tech solutions and blockchain lending. Ramp focuses on user experience and partnerships and is registered with financial authorities.".

Ramp, which has been described as a 'PayPal for crypto' by Business Insider also registered as a Cryptoasset Services Provider by the UK FCA.  Poland's Ramp, which is building payment rails to allow more customers to invest in crypto, raised US$70mn in a Series B funding round announced on 11 November 2022. 

The Series B funding co-led by Mubadala Capital and Korelya Capital was a rare silver lining against a bleak crypto backdrop.  Ramp has now raised more than US$122mn in the last 12 months despite the current 'crypto winter'. The fintech will use the money to invest further in its product line, add local fiat currencies and payment methods, expand into new territories and hire fresh talent.

Coindesk reported on the registration on 23 May 2024.  In its reported it noted that:
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• The Ramp Network is a financial technology company building payment rails connecting crypto to the global financial system. This registration will enable its users to exchange fiat currencies for more than 100 crypto assets.
• The company wants to make Ireland its European headquarters and has established a team and operation in Dublin. It intends to get authorized as a Crypto Asset Service Provider (CASP) under the Markets in Crypto Assets Regulation (MiCA).

Fortuna Digital Custody Limited and ACE Money Transfer Limited join the Fintech Ireland Maps following their respective registration as a Virtual Asset Services Provider and authorisation as a payments institution.

This increases the pool of regulated fintech in Ireland to 72, comprised of:
​

• 27 authorised electronic money institutions,
• 22 payments institutions,
• 6 standalone open banking firms,
• 12 virtual asset services providers, and
• 5 crowdfunding services providers. 

Fortuna Digital Custody Limited was registered on 9 May 2024 a Virtual Asset Services Provider.  It is the first VASP to be registered thus far in 2024 by the Central Bank of Ireland. The last VASP registered in Ireland before Fortuna was close to 5 months ago in December 2023.

Fortuna was incorporated in Ireland on 22 January 2021. The company is the 12th firm to become registered to provide crypto services in Ireland. 

According to records at the Companies Registration Office, the directors of the company are Neil Fleming, 
Juergen Hoebarth (Founder) and Brian Elders (Founder).  Connor Cantwell (Founder) is listed as company secretary.  The shareholders of the company are Cosimo Venture Partners (32.67%), Tokenization Limited (32.67%), Sors Digital Assets Limited (32.67%) and Neil Fleming (25). 

Ace Money Transfer Limited was authorised on 3 May 2024 as a payments institution by the Central Bank of Ireland for payment service #6 permission, which is money remittance.  

Ace Money Transfer was incorporated in Ireland on 3 September 2021.  Another example of a long journey between incorporation and regulation by the Central Bank of Ireland.  

Ace Money Transfer is 100% owned by another Irish company AFTAB Currency Exchange Limited.

We'll update this post with other information about the two companies at a later date.

 Eagle eyed might have notice that we had to re-jig CRIF RealTime Ireland Limited on the Map. Since first appearing as #8 (account information services) only services in early 2022, the Central Bank of Ireland registers subsequently showed the company as having both #7 (payment initiation services) and #8 around 14 July 2022.  Then in 2024, CRIF RealTime Ireland Limited reappeared on 22 April 2024 as reverting back to payment service 8 only.

This blog and others are joint efforts between Fintech Ireland and CompliReg.

First Published Tuesday 9th April 2024

Before we dive into the detail contained in the new (issued 9 April 2024) "Central Bank Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider", a couple of things to note:
​

1. the format, look and feel of the new webpage on the CBI's website;
2. the links from How We Regulate leading to the Authorisation Page, regardless if you clicked on Payments Institutions, Electronic Money Institutions, Small Electronic Money Institutions or Account Information Service Providers redirect you to the same page. That page ends in payment-authorisation.  Seems that from a pragmatic and practical stance, the CBI is getting ready for the merging of the e-money and payment services regimes under the current PSD3 legislative proposal;
3. [12+ months for authorisation] although buried away at the bottom of the CBI's webpage, there is this very welcome statement about how long it may take to get authorised. "Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made" ;
4. [requirement for a pre-application meeting] each proposed Applicant must meet with the CBI before an Application is filed;
5. [no triple hatting] the Central Bank informs that it has not approved applications which propose triple hatting.  It also states that "Proposals to triple hat roles present significant doubt as to the commitment of an applicant firm to have adequate governance in place."
6. [dual hatting].  Dual hatting is permissible on a case-by-case basis, depending on the nature, scale and complexity of the proposal, and insofar as there is no potential or perceived blurring of the three lines of defence. Any proposal for dual hatting of PCF roles should be accompanied by a detailed rationale setting out how the role holder would have sufficient capacity, and the appropriate qualifications/experience, to effectively perform the proposed roles.
7. [appointment of CEO, chair & others] the Central Bank states that "the appropriateness of resources will be determined at each stage on a case-by-case basis, applicant firms which have made senior appointments (for example Chair and Chief Executive Officer) at the application point tend to progress through the authorisation process in a more timely manner.". The Central bank also states that "Applicant firms which have made the necessary senior appointments early in the process generally submit a more complete application and, therefore, tend to progress through the assessment process in a timelier manner."
8. currently, there is no fee for submitting an Application (but there is of a course the separate Industry Funding Levy);
9. Dormancy Policy - the CBI's dormancy policy applies when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the CBI.    

Now that we have covered the burning issues on most applicants' mind, let's turn to what the CBI has set out in its new/updated "Expectations for Authorisation as a Payment Institution or Electronic Money Institution, or Registration as an Account Information Service Provider"

Referred to below is the Pre-Application Key Facts Document (“KFD”). Issued 9 April 2024. The purpose of the KFD is to provide sufficient detail to the CBI on an applicant's proposal for authorisation/registration.  It would normally consist of c.15-20 pages. It should be included in first batch of documents an Applicant reads.

As you will note from the above diagram, the authorisation assessment process consists of the following three stages:

1. Exploratory Stage. This consists of two phases:

• Initial meeting with the applicant firm; and
• Submission of required information (Key Information Check) and initial assessment;

2. Assessment Stage; and

3. Authorisation/Registration Decision Stage.

Phase 2 – Key Information Check and Initial Assessment

In addition to ensuring that all required documentation has been provided, this phase encompasses an initial assessment of the submission.

At the end of this phase, the Central Bank will notify the firm of the outcome which is either:

• Progression

The Central Bank considers that the application can progress to the Assessment Stage.  A specific case manager is assigned who will lead the assessment, and will be the primary point of contact for the applicant firm during the assessment process.

• Issues have been Identified Precluding Progression

The Central Bank considers that the application cannot progress to the Assessment Stage.  The applicant will be advised as to the rationale for not progressing and will be provided with an opportunity to address the issues identified (through written submissions and/or meetings).

During this stage the Central Bank conducts its assessment of the application. The Central Bank may request additional information, and detailed assessment meetings in relation to one or more areas of the application will be undertaken with the applicant. High quality applications with comprehensive and complete information and explanations reduce the need for additional information requests. Individuals proposed for certain key roles (Pre-Approval Controlled Function roles) may be invited for interview as part of the assessment of their Fitness and Probity for the role for which they are applying.

At the end of the assessment process, the Central Bank will notify the firm of the outcome of its assessment. There are two possible outcomes:
​

• Positive Outcome (“Minded To Authorise/Register” letter)

Where the applicant firm has positively demonstrated that it will meet all authorisation/ registration requirements and expectations, the Central Bank will issue a “Minded to Authorise/Register” letter which will include, inter alia, requirements to be addressed prior to authorisation/registration, conditions to be addressed post-authorisation, and the proposed level of capital to be held (neither conditions nor capital are applicable to Account Information Service Providers).

or

• Negative Outcome (“Minded to Refuse” letter)

In the event that the Central Bank is not satisfied following the conclusion of its assessment phase that it can authorise/register the firm, a “Minded to Refuse” letter will be issued. This will include the reason(s) for the Central Bank’s proposed decision. The letter will specify the period within which the applicant firm may make submissions in writing in relation to the proposed refusal. Any submissions made will be considered by the Central Bank before making a decision on the matter.

This is the stage in which the final decision as to authorisation/registration is made. There are two possible outcomes:

• Positive Outcome (Letter Granting Authorisation/Registration)

Subject to the pre-authorisation/registration requirements in the “Minded to Authorise” letter having been addressed, no new adverse information coming to the Central Bank’s attention in the interim, and agreement from the applicant firm as to the proposed conditions and capital (not applicable to Account Information Service Providers), a letter granting authorisation/registration will be issued, and the applicant firm will then be able to commence its regulated activities.

or
​

• Negative Outcome (Letter of Refusal)

Where a “Minded to Refuse” letter has issued, the Central Bank will review any submissions made by the applicant firm. If the Central Bank is still not satisfied to approve an application following the review of any submissions to a ‘Minded to Refuse’ letter, it will issue a letter of refusal.

​The 90 day Service Standard clock for the Assessment Stage will be paused where an information request has been issued to the applicant until such time as a satisfactory response has been provided. In addition, the clock can be switched off entirely where any of the following arise:
​

• Another regulatory authority has to be contacted;
• Persons are subject to interview;
• Significant legal issues arise;
• Significant fitness and probity issues arise;
• The business model is complex or novel in nature;
• Significant changes to the business model, the applicant’s shareholder structure or other key aspects of an application arise during the review process, or where the application becomes dormant; or
• The CBI is minded to refuse an application.  

The CBI has Dormancy Policy.

This means that when an applicant has not provided an adequate response within 60 working days following the issuance of comments. A “Minded to Deem Withdrawn” letter is sent to the applicant after 50 working days of comments issued, notifying the applicant that it has 10 working days to provide all outstanding documentation or the application will be considered withdrawn. If the applicant does not respond within the 10 working days, a “Deemed Withdrawn” letter is sent and the application is not considered further by the Central Bank.

A) You need to read the following before you put pen to paper on the actual application documents:

Thereafter read through the relevant Application Form from the list below:

B) Then you will need to get to grips with:

• the Irish Anti-Money Laundering, Counter-Terrorist Financing and Financial Sanction regime
• the Qualifying Shareholders of Payment Institutions and Electronic Money Institutions requirements
• Pre-Approval Controlled Function Roles regime

The following forms should be completed:

1) Legal Persons/Entities

• Application for a Legal Person
  

2) Natural Persons

• Application for a Natural Person 

3) Executive Directors of Legal Persons/Entities

• Application for a Director of a Legal Person or Entity with a Qualifying Holding

​While the above forms are not required to be completed for Account Information Service Providers, the Central Bank will assess the suitability of all legal and natural persons with a qualifying holding.

For all Pre-Approval Controlled Function roles (typically board members, senior management, key function holders), the following should be completed:

• Fitness and Probity Individual Questionnaires

These should be submitted electronically via the Central Bank of Ireland Portal. Please note access to the Portal is only provided once an application has progressed to Stage 2 - Assessment Phase.

In addition to the foregoing documents accessible above, it would make sense for Applicants to read and become familiar with:

Service Standards

• ​Service Standards issued by the CBI

Is there a fee?
There is currently no fee for submitting an application. Once authorised, a firm is subject to an annual Industry Funding levy. For further information on the levy see here.

How do I submit the application?
Applications must be submitted via Kiteworks. Please contact applications@centralbank.ie to obtain access.

How long is the process expected to take?
The time taken to receive an authorisation decision is primarily dependent on the preparedness of an applicant firm to undertake the assessment process, and on the quality and timeliness of submissions. The Central Bank will, in accordance with relevant legislation complete its assessment within 3 months of the receipt of the application, or if the information is incomplete, within three months of receiving all of the information required for the Central Bank to make a decision on the application. Experience suggests that it can take over 12 months for firms to provide all of the information necessary to enable a decision to be made. See above for further information on Service Standards.

Is a Pre-Application meeting required before an Application can be submitted?
Yes, see above for details of the Initial Meeting which forms part of the Exploratory Stage.

What to do if I need more help?
For any authorisation related queries, you contact the Payments Authorisation Team (applications@centralbank.ie). If you have a query in relation to new technologies, email fintech@centralbank.ie.

If you need help and support too file your Application, talk to Peter Oakes at CompliReg via office@complireg.com.

If you are:

• a regulatory adviser in Ireland, including a consultant, a law firm, an accounting firm,
• an aspiring CEO/CFO/CCO etc looking to join a fintech seeking authorisation,
• especially a founder looking to get his/her fintech (#emoney institution, #payments institution or #crypto asset institution),
• company formation firms (i.e. TCSPs), or
• a recruiter in the fintech arena,

be very careful with what can only be described as middle-men sharks / charlatans operating in the industry claiming that they are based in Eastern Europe (inside and outside of the EU depending upon your questioning), that they have clients requiring authorisations in Ireland and that they need assistance from you with the business set-up and authorisation paperwork.

These sharks/charlatans mislead and lie about their credentials and their experience. It seems that Ireland has become the go to jurisdiction for firms wanting credible supervision and regulation and the sharks are trying to exploit this. However these middle-men/sharks have no idea of the regulatory regime in Europe, let alone Ireland, and a few pointed questions catch them out. Then the fun begins as you watch them squirm in their seats.

It is clear that these are the "fintech advisers" which have and continue to fail to get their clients authorised elsewhere (or are perhaps just a scam from the outset). With Ireland's reputation riding high, these sharks are bombarding me (and others) with poorly thought-out offers/plans. I think I receive at least four approaches a week from these bad actors.

Unusually, I took a call from one of these firms today. It was an advisory firm with a name I did not recognise. When the video feed went live it was the same person who approached me last year under a different corporate name. When he saw my face, the stuttering began. His lead generators had clearly let him down.

These firms try to hire/appoint people in Ireland and increase the amount of any fees guided upon and add a margin to 'their clients'. I asked if they disclose this margin to the underlying client? Together with that question, and a few other due diligence questions, they quickly got the message that Ireland doesn't welcome their type of business nor that of their clients.

I am pretty sure that no one in Ireland wants dodgy companies and UBOs accesses and thereby diminishing the value of Ireland's hard fought high levels of regulatory reputation, prudential soundness, conduct risk, consumer protection and anti-financial crime standards.

I am pretty sure that my peers in other EU Member States feel the same way.