Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697805459976.pdf (Ireland)
Post Enactment Report Markets in Financial Instruments Act 2018 (No 25 of 2018) 13 November 2019 Prepared by the Funds, Insurance, Pensions and Markets Division, Department of Finance finance.gov.ie Title: Markets in Financial Instruments Act 2018 Enacted: 29 October 2018 Responsibility: Minister for Finance Policy objectives of the Act The Markets in Financial Instruments Directive II (MiFID II) proposal was introduced to address certain weaknesses identified in the MiFID I rules.
MiFID II, among other things, seeks to strengthen the single rulebook, including by accompanying the Directive with a Regulation ("MiFIR") and by providing additional powers to National Competent Authorities (NCAs) and to the European Markets Supervisory Authority (ESMA).
The MiFID II Directive also requires that more trading takes place on regulated trading platforms, introduces rules on high frequency trading, addresses the issue of price volatility in commodity derivatives markets and strengthens investor protections.

MiFID II was transposed by S.I.

No.

375 of 2017 and applies from 3 January 2018.

Under MiFID II Member States have the discretion to impose criminal penalties in addition to the requirement for administrative penalties.
A similar Member State discretion was included in MiFID I and the discretion was invoked, at the time, by Ireland.

The exercise of this discretion required primary legislation – Markets in Financial Instruments Act 2018.

That legislation also made two specific amendments to the Credit Reporting Act 2013 and to the Financial Services and Pensions Ombudsman Act 2017, respectively.
These amendments were technical in nature and relate to the following: (a) amending the Credit Reporting Act 2013 to provide that hire purchase and similar credit agreements fall within the scope of the Central Credit Register (CCR); and, (b) amending the Financial Services and Pensions Ombudsman Act 2017 to broaden the definition of “long-term financial service” to include certain life assurance products to which the European Union (Insurance and Reinsurance) Regulations 2015 apply.
Main Provisions of the Act The Act provides for the following: (a) To empower the Minister to make Regulations for the purpose of giving effect to the legislative provisions; (b) To provide for the creation of indictable offences which provide for criminal sanctions for serious infringements of the MiFID II rules; (c) To allow the Central Bank of Ireland to charge fees in respect of its functions under MiFID II; (d) To allow for the disapplication of certain provisions of the Markets in Financial Instruments and Miscellaneous Provisions Act 2007 now overtaken by the MiFID II reforms; (e) To expand the definition of “long term financial service” to include life assurance products to which the European Union (Insurance and Reinsurance) Regulations 2015 apply; and (f) To narrow the scope of paragraph (f) in the definition of “credit” in the Credit Reporting Act 2013 so as to exclude “trade credit” as newly defined from the scope of the central credit register and thereby to ensure that hire purchase and similar credit agreements will fall within register.
of the scope the 1 Current Status The legislation contained 9 sections, 1-9 were enacted on the 29 October 2018 and remain in force.

Post Enactment Outcome The Act provides that a person guilty of an offence under certain provisions of the MiFID II regulations (such as operating without authorisation) is liable on conviction or on indictment to a maximum penalty of €10 million and/or imprisonment for ten years.
The Act allows the Central Bank of Ireland (with the permission of the Minister for Finance and having conducted appropriate consultations) to charge fees in respect of its functions under the European Union (Markets in Financial Instruments) Regulations 2017.

The Act amended Schedule 2 of the Central Bank Act 1942 in order to ensure that the Central Bank’s powers also apply to the Markets in Financial Instruments Act 2018.
The Act amended the definition of “credit” so as to provide that it would apply to “trade credit” only as newly defined.

The effect of the provision was to bring hire purchase, personal contract plans and similar types of credit agreement provided to consumers and other borrowers within the scope of the Central Credit Register (CCR).
The Central Bank of Ireland has advised that, effective from the end of June 2019, credit providers are now obliged to report information on all hire purchase, PCP, asset finance and similar lending to the CCR in respect of both consumer and non-consumer borrowers.
The Act also amended the Financial Services and Pensions Ombudsman Act 2017 by expanding the definition of “long term financial service” to include life assurance products to which the European Union (Insurance and Reinsurance) Regulations 2015 apply.

The policy intent of the legislation has been met and the legislation remains valid.

A review of the specific changes brought about by this Act is set out below.
Evaluation of the implementation of the Markets in Financial Instruments (2018) Act The Markets in Financial Instruments Act was enacted on 29 October 2018.

Post-enactment, the Act has proven to be effective.

1.Provision of Criminal Sanctions Before this Act, there were no criminal sanctions for serious infringements of the MiFID II framework.
The Act is considered to provide a deterrent effect against serious infringements of the relevant legislation and supports the orderly functioning of financial markets, improves market integrity and investor protection.
Post enactment review:  To date there have been no criminal prosecutions for offences provided for in this Act 2 2.Amendment to the Credit Reporting Act 2013 The 2013 Act as originally enacted excluded hire purchase, personal contract plans and similar types of credit agreement from the scope of the CCR and if left unchanged would have excluded these important parts of the overall market for consumer credit.
Post enactment review:  Following implementation, CCR credit reports now include information on such agreements and accordingly lenders are better informed of a borrowers overall debt position when assessing their credit worthiness in an application for credit or when considering a possible restructuring of an existing credit agreement.

Consequently, the CCR is now a more comprehensive register serving the needs of lenders, borrowers and the general public.
3.Amendment to the Financial Services and Pensions Ombudsman Act 2017 The legislation has enabled the Financial Services and Pensions Ombudsman (FSPO) to investigate cases where the duration of a financial service is not fixed but it is reasonable to expect the duration to be longer than the five years and one month threshold.
Post enactment review:  Experience since enactment has highlighted that the complexity of the definition of a “long-term financial service” is such that, before a complaint can proceed to a formal investigation, the complainant and financial service provider may be required to firstly engage in a process to determine the FSPO’s jurisdiction to proceed, which may be lengthy in itself, depending upon the volume of the historical documentation available.
 The Department of Finance will review this issue in conjunction with the Financial Services and Pensions Ombudsman.

Conclusion The Markets in Financial Instruments Act 2018 was enacted on 29 October 2018.

It can be concluded that the Act has met its purpose and achieved the stated objectives in its first year and there have been no unintended financial or legal consequences.
The Act is deemed to be fit for purpose and will continue to provide certainty and equity in the area of financial market regulation.

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Sráid Mhuirfean Uacht, Baile Átha Cliath 2, D02 R583, Éire Government Buildings, Upper Merrion Street, Dublin 2, D02 R583, Ireland T:+353 1 676 7571 @IRLDeptFinance www.finance.gov.ie —— 4