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.  

​Welcome Intuit Ireland Software Limited to the regulated fintech ecosytem in Ireland!  Its authorisation brings the pool of regulated fintech in Ireland to 69, comprised of:
​

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

​Intuit Ireland Software Limited registration is the 1st standalone open banking firm to be registered in Ireland since July 2022. 

The company was incorporated in Ireland just under one year ago on 6 April 2023. and was registered by the Central Bank of Ireland on 2 April 2024.

Ireland now has 16 entities which are authorised or registered to provide open banking services.  These include 5 standalone entities and a mix of 11 emoney and payment firms which can provide such services. 

As we said back on 20 February 2024, we are pretty sure that these numbers will continue to grow in 2024.

Intuit Ireland Software Limited  has been registered by the Central Bank of Ireland to provide payment services #8 (Account information services) ​

​

• 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.  

Welcome Decta Limited to the regulated fintech ecosytem in Ireland!  Its authorisation brings the pool of regulated fintech in Ireland to 68, comprised of:

• 27 authorised electronic money institutions
• 21 payments institutions,
• 4 standalone open banking firms
• 11 virtual asset services providers and
• 5 crowdfunding services providers. 

Decta Limited's authorisation is the 2nd emoney institution to be authorised so far this year. The most recent payments company authorised was Etsy Ireland Limited and previous to that it was emoney firm Navro Payments Europe Limited.

As we said back on 20 February 2024, we are pretty sure that these numbers will continue to grow in 2024.

In what must have felt as extended St Patrick Day's long weekend for the Irish Decta Team, the company was authorised by the Central Bank of Ireland on Tuesday 19 March 2024 as an emoney institution. 

Decta Limited has been authorised to provide emoney services and payment services #3 (Execution of credit transfers, including standing orders) and #5 (Issuing of payment instruments and/or acquiring of payment transactions). 

Some observations:

• ​Why did Decta seek an authorisation in Ireland when another Decta Limited became authorised in Cyprus for emoney services on 10 August 2023?
• The Irish company was incorporated back on 1 October 2021.  That seems a long time from its incorporation date to today for an entity to become authorised - nearly 30 months. While a firm may not start an application immediately after it is incorporated, most firms - where they are the subsidiaries of foreign firms - start the journey no later than three to six months following incorporation.  If one was conservative and went with the six month timeline, it may have taken Decta Limited 24 months to become authorised.    
• It appointed its first set of Irish resident NEDs on 1 June 2022, with one of them leaving just after Christmas Day 2023 following the appointment of another NED just before that Christmas period.
• In addition to the NEDs, the company's local CEO sits on its board together with two group executives including its Cypriot authorised company's CEO and its Deputy CEO. 
• The Irish comapny's shareholders are RRE Tradecenters Holding Limited based in Cyprus and SIA "Suharenko Family Investments" based in Latvia, holding 67% and 33% of the Irish company respectively.   
• SIA "Suharenko Family Investments" is a shareholder in the Latvia Bank, AS “Rietumu Banka”.  
• Irish billionaire Dermot Desmond owns a one-third stake in Rietumu Banka.  Its group profits fell 37pc to €11.4m in the first nine months of 2023.
• Decta's operations in the UK, Decta Limited (UK), are authorised by the Financial Conduct Authority for emoney and payment services. 
• Decta was cited by Transparency International UK in a report focused upon financial crime risk.  The very informative report titled 'Together in Electric Schemes, Analysing Money Laundering Risk in E-Payments' was issued in December 2021.  The Bank was hit by two regulatory sanctions.  The largest sanction was a fine of €80mn later reduced by a French appeals court to €20mn.  According to The Baltics Times on 24 April 2023 "The Supreme Court in Paris concluded that the money laundering would not have been possible without Rietumu Banka. The case materials showed evidence of at least EUR 200 million laundered through the bank."  

• According to CRO records for Decta Limited as at year end December 2022 the company incurred a loss of €114.1K, had Net Current Assets of €46.9K and Net Liabilities of €110.6K.

​The Decta brand was called out by Transparency International UK in a report focused upon financial crime risk.  The very informative report titled 'Together in Electric Schemes, Analysing Money Laundering Risk in E-Payments' and issued in December 2021 carried a case study in which it noted that:

"[s]ome Latvian banks now own UK EMIs. Decta Limited, a UK EMI, lists its PSC as Rietumu Holding, the firm behind Rietumu Bank in Latvia.  In 2017, Rietumu was fined €80 million by French authorities after it was found to be involved in major tax and money laundering schemes. In response to an investigation by independent global media organisation, openDemocracy, Decta Limited stated it “acts in strict accordance with the requirements of FCA”, adding “we regularly pass anti-money-laundering (AML), Anti-Fraud, Know Your Customer and Combating the Financing of Terrorism audits held by Visa, Mastercard and big-four auditors, proving Decta to be complying with all latest AML standards.” 

In June 2021, Rietumu was fined again for money laundering failings in Latvia, this time in relation to its association with payment service providers, including those based outside of the country. A page on the website of Latvia’s central bank (Latvijas Banka), shows Rietumu has correspondent banking relationships with at least six UK EMIs.

It is becoming increasingly clear that British EMIs using Baltic banks for clearing services raises money laundering risk for both the UK and Baltic states. UK EMIs with unsuitable owners or weak AML controls are unlikely to carry out sufficient checks on their clients, while Baltic banks may believe firms regulated by the FCA have higher AML standards than they do in reality. This situation would lead to international payments being made from British EMI accounts using Baltic correspondent banks without sufficient checks being carried out on who was making them. This is similar to the scenario that occurred in the “Laundromats” exposed by the OCCRP, which resulted in billions of pounds in suspicious transactions being sent around the world." (see page 15 of this document).

Read more media here:

19/04/2022 - Last year also saw an appeals court in Paris reduce to €20 million a previous €80 million fine levied by a French court in 2017 against the bank for allegedly enabling clients of a company called France Offshore to evade taxes and launder money through companies in tax havens.

24/04/2023 - Verdict of French court on fine on Rietumu Banka for money laundering takes force

• decision on EUR 20 million fine for money laundering has come into force

17/06/2021 - Latvian bank Rietumu fined 5.85 mln for money laundering failures 

​

• 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.  

2024 is off to a slow start for those expecting a slew of authorisations and registrations by the Central Bank of Ireland of electronic money institutions, payments institutions and virtual asset services providers.

2023 saw just 5 electronic money firms become authorised in Ireland and just 1 payments institution became authorised.  Given that one of the emoney firms authorised was an upgrade from a payments institution authorisation, Ireland only welcomed 4 new companies to its emoney / payments sector. There was better news for the local crypto industry with 7 virtual asset service providers becoming registered in 2023 out of a pool of 11 such firms. These virtual asset firms and others that may get registered in 2024 can look forward to a deeper and more intense authorisation process should they choose Ireland to be their European home under the Markets in Crypto Asset Regulation. Fingers crossed.  And note MiCAReady.com is here to help those firms and other plan for their pan-European Union journey.

​Thus far in 2024 just one of these types of companies has received the Central Bank's imprimatur, that being Navro Payments Europe Limited, formerly known as Paytrix Ireland Limited.  According to publicly available Central Bank records, Navro Payments Europe was authorised as an electronic money institution on Friday 2 February 2024 (and only appearing on the Central Bank's register run of 6 February). In addition to emoney services, Navro Payments Europe was also authorised to provide payment service #3c (i.e.  Execution of credit transfers, including standing orders.)

Last August it was announced that fintech industry pioneer Joe Redmond had joined the Paytrix team as the new CEO for Ireland to drive its compliance and expansion plans across Europe. Other heavy hitters involved with Navro Payments Europe includes Peter Rowan, who joined the board of directors on 28 September 2022 and is listed on his linkedin profile as General Manager in addition to his director role. Other board directors of the newly authorised Irish company are Paytrix founders Edward Harrison and Aran Brown.  

Navro Payments is 100% owned by Paytrix Holding Limited.  The company was rebranded Navro Payments according to Companies Registration Office records pursuant to section 32 of the Companies Act 2014.

​Ireland is now home to 26 authorised electronic money institutions, 21 payments institutions, 4 standalone open banking firms, 11 virtual asset services providers and 5 crowdfunding services providers.  Rumour has it that a few more firms will hit these registers in the coming days.  We'll wait and see. 

Looking back over the Period H1 2020 to H1 2023 - to co-ordinate with the Central Bank of Ireland’s own Regulatory Service Standards Performance Reports - there are some interesting observations. During that period, as shown in the image below, the regulator:

• received 171 applications
• completed 235 key information checks
• authorised 10 electronic money firms (one being an upgrade from payment institution authorisation [InterPay Limited] and another which subsequently withdrew its authorisation in 2022).
• authorised /registered just 7 payments firms, including a large portion being standalone open banking firms (i.e. AISP and PISP)

The data in the first two bullet points comes the section within the reports headed Payment Firms (Payment Institutions, Electronic Money Institutions, Small Electronic Money Institutions & Money Transmission Businesses) & Bureaux de Change Authorisations.  Unfortunately the regulator's statistics for Bureaux de Change do not show the date a firm was authorised/registered.  Further, in the absence of more detailed data, it is possible (if not probable) that there is some double counting here.  

The data in the last two bullet points comes from the regulator's registers. 

Based on the numbers of firms authorised/registered versus applications received, one might have a few questions about the throughput of applications at the Central Bank.  However, there is no point speculating or over analysing the limited information available in the public domain.  What we need to do so is publication of substantial, independent and detailed information about the authorisation process and deeper and richer metrics. 

What is fair to say is that since since 2017, when Ireland had just two electronic money firms, that number has swelled 12 fold to the start of February 2024. Over the same period, the number of payments firms (authorised and registered) has jumped from 10 to 25 in total (21 authorised and 4 registered). More impressive is the rapid but seemingly controlled growth of quality digital asset firms totaling 11 from July 2022 to the end of last year.

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

As of 5 September 2023 we have produced an updated Fintech Ireland Map of authorised electronic money institutions, authorised payment institutions and registered account information services providers.

New to version 12 of the Map is Freemarketfx Ireland Limited, which was authorised on Monday 4 September 2022 to payment services 3c and 5.  These services allow Freemarkefx Ireland to provide:

• #3)  Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider: (c) Execution of credit transfers, including standing orders; and
• #5) Issuing of payment instruments and/or acquiring of payment transactions. 

To date since the start of 2023, Ireland's Central Bank has authorised just three firms as either an electronic money institution (EMI) or a payments institutions (API) i.e. Freemarketfx Ireland (API), TransferMate (Interpay Limited) (EMI) and NoFrixion Limited (EMI). TransferMate was previously authorised as a payments institution from 2011-2023 before becoming an EMI in April 2023.  Thus effectively, NoFrixion and Freemarketfx Ireland are the only new entities to become authorised in 2023 (2 authorisations in 8 months).    

Freemarketfx Ireland Limited was authorised more than 2.5 years after it was incorporated in Ireland on 23 March 2021. According to Irish companies registration records, Freemarketfx Ireland is 100% owned by FreemarketFX Limited in the UK, which as per the UK FCA records, has been an Authorised Payment Institution since 16 May 2018.

Our Peter Oakes last spoke with Charlie Taylor of the Business Post on the topic of regulatory authorisations on Sunday 20 August 2023.

• Peter Oakes, a former Central Bank enforcement director and founder of Fintech Ireland, said a firm setting up in Ireland needs to be aware that the upfront and post-authorisation costs in the first year will set them back about €1.5 million.
• “A considerable part of this outlay is required ahead of approval with no guarantee it will be given,” Oakes said.
• “No one wants to say this because everyone will say that by doing this you are not flying the green flag. Some consultants hide behind that because they might not be engaged [by clients] and risk losing other client work both pre and post authorisation in areas such as tax, IP, employment, commercial and corporate work. No-one should be surprised by this,” he added.

Ireland is now home to 47 legal entities which provide either payment services or emoney services.  There are 26 payments services firms in Ireland which includes 4 account information services providers and 22 emoney firms.  The records of four firms state that their authorisations were withdrawn.  The three that are no longer authorised to provide services in Ireland are Xpress Money Services Limited,  SWFS Ireland Limited and Modulr FS Europe Limited.  The 4th entity, noted above, Interpay Limited (TransferMate) switched from payments services only to an electronic money (plus payment services 3b, 3c, 5, 6).


Further Reading: See our post on the release of version 11 of this Map for more information.