Establishing an Investment Firm in Ireland under MiFID
05 Aug 2020
Ireland is a key European jurisdiction for the provision of investment services – particularly as a European hub for EU cross-border services.
The authorisation process involves an application to the Central Bank of Ireland (the "Central Bank").
- An initial submission to the Central Bank of a Key Facts Document ("KFD");
- A preliminary meeting with the Central Bank to discuss the applicant's business objectives and how these fit within the MiFID regime;
- Submission of a complete application form including (i) a detailed programme of operations covering, inter alia, business strategy along with a business model, organisational structure and corporate governance arrangements; (ii) online individual questionnaires for each individual performing a pre-approved control function ("PCF"); (iii) financial projections for the first three years of operation; and (iv) ownership details, including group structure and required supporting documentation (considered in more detail in "Conditions for Authorisation" below); and
- Review of the application by the Central Bank and a final decision.
Once authorised in one EU member state, an investment firm can easily "passport" its services (by way of establishing a branch, through the freedom of services or through the appointment of local tied agents) into other EU member states.
An application to the Central Bank will need to address the following:
- Capacity to provide investment services. The applicant's constitutional documents must give it sufficient capacity to conduct investment services;
- Minimum capital. The applicant must have sufficient regulatory capital;
- Directors/managers. The Central Bank must be satisfied as to the probity and competence of the directors and senior managers / executives of the applicant. Online individual questionnaires must be completed for each PCF. The Central Bank requires the board to have a balance of executive and non-executive directors. It also requires a minimum of two directors direct the firm's business and have at least one independent non-executive director ("INED");
- Ownership. Full details of the suitability of each "qualifying shareholder" needs to be provided, including group structure charts, details of all regulated entities in the group, accounts for all entities in the ownership chain and evidence showing ownership of each entity in that chain;
- Structure, skill, staffing. The Central Bank must be satisfied as to the organisational structure and management skills of the applicant and that adequate levels of staff and expertise will be employed to carry out its proposed activities (see also "Outsourcing Considerations" below); and
- Ongoing organisational requirements and conduct of business requirements. The MiFID Regulations apply a range of organisational and conduct of business standards to all investment firms.
To establish a MiFID entity, the "head office" / "principal place of business" or "the mind and management" of the applicant must be located in Ireland.
An Irish authorised MiFID firm may delegate or outsource some of its activities to entities in other jurisdictions, subject to the MiFID Regulations and the Central Bank's guidance on outsourcing.
The team can provide full support on MiFID authorisation projects for new investment firms setting up in Ireland (including associated support from other practice areas including Corporate, Tax and Employment). We have obtained authorisations for a significant number of investment firms in Ireland and have developed framework documents in line with the Central Bank's MiFID requirements.
We regularly liaise with the Central Bank on cross-border passport applications and EU branch establishments.
1 Markets in Financial Instruments Directive (recast) (Directive 2014/65/EU)
2 European Union (Markets in Financial Instruments) Regulations 2017 as amended
Senior Regulatory Executive Dublin
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