IFSC Clearing House Group 25 September 2012 Department of the

IFSC Clearing House Group 25 September 2012

Department of the Taoiseach, Sycamore Room at 3.30pm

Attendance

Martin Fraser (Chair) D/Taoiseach

Mary Clare O‟Sullivan D/Taoiseach

Michael Sludds (Secretary) D/ Taoiseach

Ann Nolan D/Finance

Gary Tobin D/Finance

Peter Oakes Central Bank

Brendan Bruen FSI

Tim Hennessy Axis Capital/FSI

Leo McAdams Enterprise Ireland

Peter Keegan BOAML

David Guest Green IFSC Steering Group

Paul McGowan Chair Funds Group

Pat Wall PWC

Pat Farrell IBF/FIBI

Robert Richardson Pioneer Investments

Eamon O‟Dea Revenue

Jim Byrne Revenue

Deirdre O‟Higgins D/JEI

Susan Dargan State Street

Brian Daly KPMG

Kieran Donoghue IDA

1. Apologies

John Murphy D/JEI

Matthew Elderfield Central Bank

Barry O‟Leary IDA Ireland

Padraig Rushe Bank of Ireland

Fergus Murphy FSI

John Feely Willis

Tony Golden CITI

Pat Lardner IFIA

Willie Slattery State Street

Tom Young BNY Mellon/FIBI

Deirdre Somers ISE

David Fagan Legal & General

2. Minutes and Matters arising

The Minutes of the meeting of 7 June 2012, as circulated, were agreed.

3. CHG Operation/IFSC Strategy

The meeting discussed various dimensions in relation to implementation of the strategy

taking particular account of the competitive international environment. The idea of

establishing a Sub-Group was mooted.

In relation to transparency, consideration will be given in advance of the next Group meeting,

to the placing the Minutes of the Clearing House Group on D/Taoiseach‟s website, to

publishing an annual report on the work of the CHG and to briefing the Oireachtas Joint

Committee on Finance, Public Expenditure and Reform.

In response to the discussion regarding the forthcoming budget, Tim Hennessy informed the

meeting that the UK tax regime continued to improve and given London‟s prominence within

the re/insurance market, it was increasingly challenging for Ireland to differentiate itself.

4. Regulation (incl.Central Bank/Industry engagement)

Peter Oakes reported that the Central Bank and Industry continue to engage on business as

usual matters. He noted that Pat Farrell had informed, following previous engagements

between the Central Bank and Industry that Industry will be reverting with its views on the

approach to enforcement very shortly. Pat Farrell confirmed the point at the meeting. Pat

Farrell informed the Chair that Industry think it important that further engagement take place

on the Strategic Plan with the Central Bank before its publication. It was noted that the

Strategic Plan is under draft with publication some months away.

On the topic of anti-money laundering it was noted that the IFIA has, in past few days, raised

the prospect of revisiting a specific area (reliance on third parties issue) of AML. The

Central Bank is awaiting details from the IFIA. Paul McGowan informed that specifics of the

issue will be sent to the Central Bank shortly. In response to a question from Ann Nolan

about the timing of the new issue, IFIA confirmed that it will include D/Finance on the

communication.

5. D/Finance Update Ann Nolan, D/Finance, reported on a number of items including:

AIFMD Level 2

The College of Commissioners will not be disposing of the matter straight away. The process

is continuing and the Department is contact with other Member States, and the Commission

in relation to this matter.

Anti Money Laundering Issues

Discussions are ongoing between the Funds Industry, the Department of Finance and the

Central Bank in relation to two related issues for some time namely Third party reliance and

Secrecy Jurisdictions. It is hoped that progress can be achieved on both issues in the short

term.

IOSCO Multilateral Memorandum of Understanding (MMOU)

Industry and the Central Bank recently informed D/Finance that failure to sign the IOSCO

MMOU by the end of the year will have repercussions.

The CBSE is currently between second and committee stages and has been for some time.

Every effort is being made for the Bill to be completed in time for year-end.

CRD Update

The Capital Requirements Directive and Regulation which are currently being discussed at

trilogue stage are vitally important pieces of legislation. The need for stronger capital and

liquidity standards for EU financial institutions is evident from the financial crisis. Ireland

has played an active role in the negotiations during the Council Working Party group stage

and will continue to monitor the progress of this proposal.

General Tax Update

Budget / Finance Bill 2013

The annual consultation process with industry in respect of Budget and Finance Bill 2013 has

commenced. Preliminary meetings have taken place with all of the CHG Tax Subgroups and

we are awaiting formal pre-Budget submissions from some of the Groups (Insurance and

Banking & Treasury).

FATCA is one of the Department‟s (and Revenue‟s) big priorities in terms of Finance Bill

2013 and negotiations with the US on an Intergovernmental Agreement are currently

underway.

Financial Transactions Tax (FTT)

It became clear at the ECOFIN meeting in June that an EU-wide FTT would not be agreed,

and those countries who favour the tax will now try to introduce it by way of “enhanced co-

operation”, under which at least nine countries must participate. This requires those countries

to write to the Commission asking it to produce a formal proposal for such a directive. No

letter has issued to date and therefore there is no revised proposal. However, it is believed

there will be a sufficient number of countries and that any new proposal will not substantially

differ from the current proposal.

Ireland will not be among the participating countries but the Minister for Finance has stated

we will not stand in the way of those who want to introduce an FTT under the “enhanced co-

operation” mechanism.

The Minister had previously stated his view that an FTT would be best applied on a wide

international basis to include the major financial centres; and that if it could not be introduced

on a global basis, it would be better if it were introduced on an EU-wide basis to prevent any

distortion of activity within the Union.

EU Wide Bank Resolution Proposals

Ireland has been supportive of the Commission‟s work to prepare a proposal for a Directive

to establish a framework for the recovery and resolution of credit institutions and investment

firms. Now that it has been published Officials from the D/Finance and the Central Bank are

engaging with it at Council Working Group level.

Banking Union

Ireland supports the development of a banking union for Europe in principle but does not

favour a fragmented approach. Further banking integration is supported and Ireland would

favour its application to all banks in the 27.

Ireland supports the development of a banking union for Europe which immediately and

permanently breaks the link between the sovereign and the banks and significantly eases the

burden of support that Ireland has already provided to the banking sector.

6. New Business/International Engagement and Marketing

Green IFSC hosted a seminar at the Sustainability Conference in Galway in July. The

seminar was well attended by international and domestic players and received excellent

coverage in international journals. The keynote address by the Taoiseach served to underline

Ireland's commitment to developing financial services activities which support the green

economy. The Minister for Communications, Energy and Natural Resources also addressed

the seminar.

The 'Greening the IFSC' initiative was successfully launched by the Minister Rabbitte on

September 27th. The project is supported initially by 10 major IFSC firms and SEAI. It is a

key component in building credibility for Dublin as a leading centre for green funds and

financing activity. It also demonstrates the commitment of the international financial services

sector to the wider sustainability agenda.

John Bruton of IFSC Ireland will headline a Green Funds event to be held in New York 28-

30 November. The event is targeting influencers and decision makers in the global green

asset management sector.

In relation to Education and Skills there was a successful launch of DCU MSc in Sustainable

Energy Finance in June 2012.

The Green IFSC initiative continues to gather support from private sector participants and the

public sector/state agencies. The focus through 2012 has been on building a credible

legislative and skills framework to reinforce a strong branding and communications

programme. The Steering Group will review work to date in the last quarter and agree an

action plan for 2013. The mission is to build on the marketing and communications

momentum and target the key players in the sector using both public and private sector

resources.

Enterprise Ireland hosted International Markets Week in Dublin in September. Over 100

marketing executives from 30 overseas offices representing 60 markets met with EI clients to

assist them in their international growth strategies. There were over 2,300 meetings

organised for 700 EI clients. All of EI‟s key Financial Services clients attended the event,

with significant focus on emerging markets.

EI will be holding 3 overseas Financial Services events in quarter 4 of this year, a trade

mission to Canada and to South Africa and an Embassy dinner event in London.

Kieran Donoghue briefed the Group on recent developments in relation to IDA marketing of

the sector and international engagement:

IDA continues to engage with a diverse range of companies within the international financial

services sector. This includes both existing investors as well as new targets. IDA has recently

completed a five day promotional programme in Singapore and Kuala Lumpur. The

programme team included a Senior Official from the Department of Finance. Meetings were

held with a range of institutions including Sovereign Wealth Funds, Banks, Asset / Fund

Managers and Institutional investors.

The programme included a specific focus on Islamic Finance and several meetings with

relevant companies at the Global Islamic Finance Forum (GIFF). Islamic finance is a specific

area of opportunity identified in the Government‟s Strategy for the sector. The trip confirmed

several investment prospects from the region– both portfolio and direct.

Forthcoming overseas marketing missions by IDA include the following:

West Coast of the United States (US) in October with a focus on Payments and Financial

Technology (Minister Bruton will also be in the US at this time and meetings are being put in

place with FS clients)

Hedge Funds - East Coast US in late October

The UK (London) early November with John Bruton, President of IFSC Ireland

SIBOS Japan also November.

Pat Farrell gave an update on IFSC Ireland. A review of IFSC Ireland‟s mandate was

recently completed by an independent consultant. Having considered the outputs and

recommendations, the Council of IFSC Ireland decided to renew the mandate and that of the

President for a further 2 years. Upcoming promotional events between now and year end are

focused on London and New York with the latter focused on the marketing of “Green IFSC”.

7. AOB

Brendan Bruen reported good engagement on discussions with the Central Bank on Cross

Border Guidelines.

Pat Wall led a discussion on the recently published GFSI ratings which placed Ireland at 49.

There was general agreement that the rating was disappointing but probably not an accurate

reflection of where Ireland should be, notwithstanding the challenges we face. Pat Wall

undertook to come back to the Group with suggestions.

8. Date of next meeting

The next meeting takes place on Thursday 22 November at 8.30am.

IFSC Clearing House Group 7 June 2012

Department of the Taoiseach, Room 308 at 8.30am

Attendance



John Murphy D/JEI

Ann Nolan D/Finance



Michael Brennan Revenue

Patrick Brady Central Bank

Brendan Bruen FSI


Leo McAdams Enterprise Ireland

Peter Keegan BOAML




Tony Golden CITI

Pat Lardner IFIA

Denis Curran IDA

Deirdre Somers ISE


Pat Wall PWC

John Feely Willis

1. Apologies


Mary-Clare O‟Sullivan D/Taoiseach



Brian Daly KPMG



Eamon Deasy Revenue

Jim Byrne Revenue

Fergus Murphy FSI


The Minutes of the meeting of 3 April 2012, as circulated, were agreed.

3. Regulation (incl.Central Bank/Industry engagement)

Pat Brady reported that the Central Bank and Industry are continuing to engage, reporting

progress with a number of substantive issues addressed. There was recognition of the many

challenges for the international financial services industry in the difficult global environment

and the ability to fulfil the objectives in the Strategy.

4. Presentation by Matthew Elderfield to CHG in July The meeting was informed that Matthew Elderfield will make a presentation to the CHG on

the Central Banks Strategy 2013-2015 on Tuesday 10 July at 3.30pm.

5. D/Finance Update Ann Nolan reported that the Department had established an internal IFSC Working Group to

enhance the Department‟s engagement with the Clearing House Group and Industry.

AIFMD The Department has been in contact with the EU Commission. The Commission indicated

that it was open to amendments to Article 85(d) to allow the continued delegation of

significant numbers of functions by fund managers where the manager retains an appropriate

level of oversight and control.

They had also discussed the depositary liability issues and submitted proposals jointly with

the UK and Luxembourg. The Commission is examining the proposals and it is expected they

will make their views known in the next few weeks.

Open Ended Investment Company/SICAV Bill Industry is currently working on preparing a submission regarding the Draft Heads for

consideration by the Department.

The timetable is considered ambitious. Even if Heads are quickly agreed the Office of the

Attorney General and the Oireachtas will have competing demands. The Department of

Finance will also be under pressure before during and after the presidency next year.

Industry have offered any assistance which is appropriate in preparing the Heads of a Bill

which will require close consultation between the Central Bank, D/JEI and D/Finance before

Government approval is sought for the Heads of Bill.

CRD IV Update Following the unanimous support for the Danish Presidency compromise text at the ECOFIN

meeting on 15 May, CRD IV is currently at Trialogue stage, the process where the European

Parliament, the European Commission and the Danish Presidency engage in negotiations to

achieve a first reading agreement. The European Parliament‟s ECON committee voted in

favour of rappateur Othmar Kara‟s‟ report on 14 May.

Discussions are continuing at Trialogue stage with a vote in the European Parliament on the

proposal scheduled for early July. This is one of the priorities of the Danish Presidency.

Aim of the Proposal

The legislative package published by the European Commission on 20 July 2011 proposes to

implement Basel III in EU law by a recast of the existing Capital Requirements Directive into

a new Directive and a Regulation.

The aim of the proposal is to reflect the Basel III capital proposals, to introduce new

sanctions for non-compliance with prudential rules, corporate governance and remuneration.

These changes are due to be implemented from 1 January 2013 (there will be transitional

arrangements for some elements).

The proposal changes the balance of home-host supervisor responsibilities concerning

liquidity supervision of branches. Under the current CRD, host supervisors are responsible

for liquidity supervision, pending further coordination. CRD IV will assign this responsibility

to home supervisors, but with safeguards to ensure that host supervisors have full access to

information gathered by home supervisors.

General Tax Update D/Finance has started a consultation process in respect of Budget and Finance Bill 2013.

Meetings have taken place with the Banking and Treasury Tax Subgroup and meetings are

scheduled with the Insurance and Funds Groups over the coming weeks.

Presidency of the EU will be a significant priority for D/Finance over the course of the next

year – there are a number of high-profile tax dossiers – CCCTB, FTT, and VAT. The

Department met with the European Commission in March of this year to kick off the

planning process and further meetings at Heads of Unit Level are planned for July.

FTT The Government position is clear. Any tax on financial transactions would be best applied on

a wide international basis to include the major financial centres. If such a tax cannot be

introduced on a global basis, it would be better if it were introduced on an EU-wide basis, as

this would prevent any distortion of activity within the Union. There is concern if a FTT was

introduced, it could affect the financial services industry, especially in the IFSC, and lead to

some activities moving abroad.

D/Finance has consulted widely with the financial services industry on the implications of the

FTT proposal, including a round-table meeting on 5 March. The Department is fully aware

of industry concerns that the proposal may lead to loss of business and employment,

particularly if it is not introduced on a global or EU-wide basis.

FATCA – Foreign Account Tax Compliance Act

Five Countries - Germany, Italy, U.K., Spain and France, together with the US issued a joint

statement, in February, to the effect that they would explore a common approach to FATCA

implementation through domestic reporting and reciprocal automatic exchange and based on

existing bilateral tax treaties. In essence, country-to-country agreements would replace the

agreements between the U.S. and the foreign financial institutions.

Following the release of that statement, Revenue has made contact with the U.S. Treasury

and is now in discussions with the U.S. with a view to implementing a country-to-country

agreement with the U.S. in relation to FATCA.

EU Wide Bank Resolution Proposals D/Finance mentioned the European Commission proposal for a Directive to establish a

framework for the recovery and resolution of credit institutions and investment firms

The Commission characterises the overriding objective of the framework as ensuring that

institutions in difficulties can be allowed to fail without risk to financial stability while

avoiding costs to taxpayers.

6. Strategy Progress and Monitoring Brendan Bruen and the Chairs of the IFSC Working Groups gave brief updates in respect of

Strategy implementation. The Chair indicated that a review of progress on the Strategy would

be undertaken by the Public Sector representatives and a meeting organised in the coming

weeks.

7. New Business -Green IFSC

Communications & Marketing

Following the recent launch of the Green IFSC Global Green Asset Management network,

initiative on-going marketing and communications activity has led to significant, positive

media attention domestically and internationally among mainstream, green enterprise and

financial services publications.

Private Sector response

As a direct result of increased marketing/communications activity, Green IFSC is receiving

an increased number of queries from international green finance players seeking to learn

more about Ireland‟s offering in this space. Green IFSC Steering Group private sector

members are assisting with query response.

Education/Skills

Supported by the Summit Finuas Network, education/skills pillar will launch the new DCU

MsC in Sustainable Energy Finance on 25 June in the Convention Centre. Green finance

educational suite of products now stands at three – DCU MsC in Sustainable Energy Finance,

DCU Grad Cert in Sustainable Energy Finance and UCD Smurfit MsC in Energy &

Environmental Finance.

Tax/Finance

Hosted by PwC, Green IFSC‟s inaugural Green Tax Breakfast briefing was held on 2 May.

With a capacity audience of 127 finance and enterprise leaders, this event offered an

opportunity to brief attendees on recent green finance supportive tax measures.

“Greening the IFSC”

Supported by SEAI, the measurement of the IFSC‟s carbon footprint, under the “Greening

the IFSC” continues. To date, 12 companies have signed up to this specific project

representing 8,000 plus of IFSC employees.

State agencies continue to play an important role in supporting Green IFSC efforts. Recent

meetings have been held with IDA focussed on collaboration across

marketing/communications activity, with follow up scheduled mid-June. Enterprise Ireland

meeting is currently being scheduled.

Initiative momentum is being maintained and accelerated as a result of mandate certainty.

8. International Engagement and Marketing

Michael Stapleton said that John Bruton, in conjunction with IDA and IFSC Ireland, had a

series of bilateral meetings with senior executives up to CEO level, of both existing clients

and major target companies in the US in March.

IFIA had staged two major platform events and other networking events in New York and

Boston.

The Taoiseach‟s visit to China had also given the IDA and Industry the opportunity to meet

with a number of Chinese banks and interested parties in the aviation finance sector.

9. Date of next meeting

The next meeting takes place on 25 September at 3.30pm.

IFSC Clearing House Group 3 April 2012

Department of the Taoiseach, Italian Room at 5pm

Attendance


Mary Clare O‟Sullivan D/Taoiseach


Michael Stapleton IDA Ireland

John Murphy D/JEI

Ann Nolan D/Finance


Eamonn O‟Dea Revenue

Jim Byrne Revenue


Brendan Bruen FSI


Brian Daly KPMG


Julie Sinnamon Enterprise Ireland


Peter Keegan BOAML




John Travers Chair, Green Evaluation Team


Tony Golden CITI

Gary Palmer IFIA

Denis Curran IDA

Deirdre Somers ISE

Breda Power D/JEI

1. Apologies

Fergus Murphy FSI

John Feely Attain




Pat Wall PWC


The Minutes of the meeting of 18 January 2012, as circulated, were agreed.

The Chair introduced Mary Clare O‟Sullivan, D/Taoiseach, to her first meeting of the Group.

The Chair thanked Gary Palmer of the Irish Funds Industry Association for the excellent

contribution he had given over the years to both the Funds Working Group and the Clearing

House Group. On behalf of the Group he wished Gary every success in the future.

3. Department of Finance update

Ann Nolan updated the Group on a number of issues:

The Finance Act passed through all stages of the Oireachtas and was signed into law by the

President. The Act contains 13 sections which introduce 21 individual measures to support

the ambitious jobs targets contained in the IFSC Strategy.

In summary, the measures enhance the competitive position of the sector through:

o Reducing double taxation in the corporate treasury and aircraft leasing sectors,

o Providing clarity around the tax treatment of complex financial transactions in

terms of stamp duty in particular,

o Addressing tax issues arising for investment funds due to the UCITS IV Directive

which was implemented on 1 July 2011, and

o Further easing the administrative burden in relation to non-resident investors in

Irish investment funds.

Taken together with the Special Assignee Relief Programme and Foreign Earnings

Deduction, the measures represent a significant package which will support the

competitiveness of the industry and hopefully assist in creating new jobs.

Financial Transactions Tax

Opinion on the FTT is polarised, and there could be considerable discussion on the subject at

the upcoming Informal ECOFIN. A clearer picture may emerge after that meeting.

D/Finance position on the proposals for an FTT is clear. Any tax on financial transactions

would be best applied on a wide international basis to include the major financial centres. If

such a tax cannot be introduced on a global basis, it would be better if it were introduced on

an EU-wide basis, as this would prevent any distortion of activity within the Union. The

major concern is that, if an FTT is introduced, it could affect the financial services industry,

especially in the IFSC, and lead to some activities moving abroad.

D/Finance has consulted widely with the financial services industry on the implications of the

FTT proposal, including most recently a round-table meeting on 5 March. The Department is

fully aware of industry concerns that the proposal may lead to loss of business and

employment, particularly if it is not introduced on a global or EU-wide basis.

FATCA - Foreign Account Tax Compliance Act

The European Commission had been negotiating with the US on behalf of all member states

until a group of five countries (France, Germany, Italy, Spain and UK) broke away and issued

a joint statement with the US announcing their intention to explore a common approach to

FATCA implementation through domestic reporting and reciprocal automatic exchange and

based on existing bilateral tax treaties.

What is envisaged is that the relevant financial institutions in those member states would

report to their national Revenue authorities in respect of US investors. The national Revenue

authorities would then deal direct with the IRS in the automatic exchange of information.

The issue has been discussed with the relevant representatives of the IFS industry and the

industry favours an approach whereby Ireland would also seek to enter into a bilateral

agreement with the US whereby reporting from Irish financial institutions would be to the

Irish Revenue who would then exchange information directly with the IRS.

Jim Byrne, Revenue, reported that following the issue of the Joint Statement by the U.S.,

Germany, Italy, U.K., Spain and France, Ireland decided to initiate contact with the U.S.,

with a view to exploring a common approach to FATCA implementation through domestic

reporting and automatic exchange and based on existing bilateral tax treaties.

Revenue has made contact with the U.S. Treasury and is now in discussions with U.S.

The U.S. have outlined that they are not engaging in negotiations with individual States but

are developing a model global agreement. Ireland is one of a number of countries with which

discussions in relation to a model agreement are ongoing.

The model agreement will not alter or amend the obligation to identify or report certain

information under FATCA but will outline an alternative pathway for reporting FATCA.

The model agreement is expected by the end of June.

4. Regulation Regarding Central Bank/Industry engagement, the industry side is finalising its submission to

the Central Bank and expects to meet with the Bank soon. A more substantive report will be

made to the next CHG meeting.

AML continues to be an area where further engagement with the Central Bank and D/

Finance would be of benefit. Industry is currently working towards an AML workshop with

the Central Bank, where industry's proposals regarding areas where concerns arising from

AML inspections will be considered. Additionally, the AML workshop will also look to

agree a framework/procedure for a risk based assessment of third parties/jurisdictions

pending a legislative amendment to the CJA 2010 to provide for this.

Following this workshop it is proposed that the Investment Funds Sectoral Guidelines will be

revised and updated to reflect the proposals agreed during the workshop, following which the

revised guidelines will be shared with the Central Bank for review/agreement.

With regard to reliance on third parties in jurisdictions where banking secrecy exists, it was

noted that while other jurisdictions appear to have similar requirements when relying on third

parties in jurisdictions with banking secrecy, the challenges of accepting undertakings from

such third parties, which reference local secrecy laws, were not so acute in other jurisdictions.

It was noted that the D/Finance have written to the Commission to understand how this issue

was being addressed in other Member States.

5. New Business Green IFSC

John Travers presented the findings of the independent Review Group which was established

to undertake an evaluation of the Global Green Interchange (GGI) Report and the

implementation plan contained therein and report back to Government.

Ultimately the Review Document has recommended against one of the key recommendations

of the original GGI report which was the establishment of an International Carbon Registry in

Dublin. However, the Review does highlight a number of other positive elements of the

Green IFSC Initiative.

With regard to the Green Finance proposals (Pillar 2), the Evaluation Group agreed that there

are significant investment location opportunities for Ireland in this space and that these are

best pursued on the basis of agreed partnership arrangements between the private sector and

the development agencies. Both sectors are active in this space at present but, even taking

account of the inherent differences in their roles, their respective activities are somewhat

more fragmented than they should be if Ireland Inc's promotional activities are to be

optimised. There is a need for an agreed, joint promotional approach. Some of this work will

be industry-driven, some will be agency/Government-driven and some will involve shared

activities.

In relation to the Education, Skills and Innovation aspects of the report (Pillar 3) the

Evaluation Group considered that these are well articulated and agreed that ongoing work

needs to be further enhanced and developed to create a pool of professional expertise which

will meet the requirements of investors in green finance and associated projects in

consultation with training bodies, with the third- level education providers and with the

Department of Education and the HEA.

Regarding the proposals in respect of carbon markets (Pillar 1: the establishment of a

sovereign-backed International Carbon Standard (ICS) and a Dublin International Voluntary

Offset Registry/DIVOR by the Government) the Evaluation Group do not consider that the

case for such initiatives, radical and innovative as they are, as set out in the report, are

sufficiently robust to allow their endorsement by the Group. The reasons for that conclusion

are set out in detail in the report of the Evaluation Group.

Following Mr Travers presentation there was a general discussion on the next steps. It was

agreed that the development agencies, IDA and Enterprise Ireland, should meet as a matter of

urgency with representatives of the Group to progress the required partnership arrangements

on the promotion and development of the green finance initiatives as advocated by both the

Evaluation Group and the Group. It was agreed that any further consideration of the

ICS/DIVOR proposals be "parked" pending progress on these initiatives.

Tony Golden, Citi, said that Investment funds which invest in 'Green or Environmental

Companies' and which are traded and listed on a regulated stock exchange are no different to

administering any other UCITS or regulated fund. Investment funds which invest in 'Carbon

Credits' or indeed start up early stage finance green companies may be a little more complex

and may fit more into a non-UCITS or QIF type fund. However, provided there are no issues

in obtaining prices for these type securities, they can be easily administered.

He felt that from a pure 'custody and clearing perspective', there is a possible opportunity.

The clearing and settlement aspects of carbon credit trading, as well as the issuance and

paying agency aspects which relate to a carbon credit type security is perhaps an activity

where IFSC could carve out an opportunity as a centre of excellence. In other words, while

there may/may not be a Carbon credit trading opportunity, there could be opportunities for

custody, clearing, issuance and paying agency activities for the IFSC. Citi has an offering

currently available.

David Guest reported that progress on the Green IFSC initiative had continued during the

evaluation period in respect of the marketing of green financial services and green finance

education. He noted that Michael Sludds from Department of an Taoiseach would be joining

the Green IFSC Steering Group and also noted the support given by an Taoiseach to the

Green Asset Management Global network initiative at recent events in the US and China.

6. International Engagement and Marketing Michael Stapleton said that John Bruton, in conjunction with IDA and IFSC Ireland, had a

series of bilateral meetings with senior executives up to CEO level, of both existing clients

and major target companies in the US in March.

IFIA had staged two major platform events and other networking events in New York and

Boston.

The Taoiseach‟s visit to China had also given the IDA and Industry the opportunity to meet

with a number of Chinese banks and interested parties in the aviation finance sector.

7. Strategy Update from Working Group Chairs

Asset Management Working Group

Robert Richardson reported that the Group had completed a first draft of its strategy

document for input into the overall IFSC Strategy.

Insurance Working Group

Tim Hennessy informed the meeting that the industry members of the Insurance Working

Group had met on two occasions to develop their views on possibilities to further develop

employment opportunities within existing markets along with opportunities for new entrants.

A matrix across the various re/insurance industry sectors was developed encompassing

product, jurisdiction, regulatory, tax etc. The broad themes are consistent with Insurance

opportunities for growth included in the 2011-16 IFSC Strategy document. Meetings had

also been held with FSI and the Insurance Working Group output will be incorporated into

the overall document being coordinated by FSI.

Banking and Treasury Working Group

David Guest reported that a Working Group was progressing with an initiative with

participants in the Private Equity/Venture capital sector. The objective of the initiative is to

determine whether marketing and development of the IFSC can be expanded to promote

growth in this sector together with the established IFSC sectors. The Banking and Treasury

Group was also monitoring developments in payment services, intellectual property

commercialisation and Islamic finance to identify links and synergies with existing CHG

initiatives.

Funds Working Group

Gary Palmer said that a matrix of action points for the Funds industry had been drawn up and

a number of sub-group meetings had taken place to discuss implementation.

Pension Funds Working Group

A Pension Funds Focus Group is scheduled for 22 May to discuss the future potential for

cross-border pensions and asset pooling.

8. Date of next meeting:

The next meeting of the Group takes place on Thursday 7 June at 8.30am.

IFSC Clearing House Group 18 January 2012

Department of the Taoiseach, Room 308 at 10am

Attendance



Kieran Donoghue IDA Ireland

John Murphy D/JEI

Ann Nolan D/Finance


Pat Casey D/Finance

Geoffrey Keating D/Taoiseach



Jim Byrne Revenue


Brendan Bruen FSI


Brian Daly KPMG



Joe Breslin Enterprise Ireland


Peter Keegan BOAML

Pat Wall PWC






Tony Golden CITI

Gary Palmer IFIA

1. Apologies

Fergus Murphy FSI

John Feely Attain



Deirdre Somers ISE

Breda Power D/JEI

The Chair welcomed the newly appointed Secretary General of D/JEI, John Murphy, to the

Group.


The Minutes of the meeting of 24 November 2011, as circulated, were agreed.

3. IFSC Strategy Implementation

Brendan Bruen updated the Group on progress on the IFSC Strategy. The Working Groups

were preparing implementation plans for the end of February, and work was also progressing

on cross-sector elements.

The Chairs of the Working Groups updated the Group on specific issues under consideration.

The intention is to present work on a consolidated list of action areas at the next Group

meeting.

4. Green IFSC Evaluation process

Kieran Donoghue reported that the Evaluation Group had met on a number of occasions

since being established at the end of September 2011. The Group were reviewing the draft

findings of the Steering Group implementation plan and expected to report back to

D/Taoiseach shortly.

The Chair of the Evaluation Group, John Travers, would meet with Martin Fraser to inform

him of the Group‟s findings.

5. EU

(a) Recent Developments

D/ Finance reported that:

The European Commission published a proposal on 30 September for a Directive on a

common system of financial transaction tax.

The Minister has indicated that Ireland does not agree to such a tax being introduced

except at a global level or at least by all 27 Member States of the European Union,

including the United Kingdom.

The Taoiseach reiterated this view during the British-Irish Council meeting in Dublin in

January 2012.

The Department of Finance hosted a roundtable discussion on the FTT in October 2011

and has sought input from each of the CHG subgroups in terms of the potential impact of

the FTT on their sector.

The proposals are being discussed at EU Council Working Group level and the first

meeting dealing with the text of the proposal took place on the 3 January.

The next meeting is scheduled for March 2012 and D/Finance intends to host another

roundtable discussion with the IFS industry in advance of that meeting.

(b) Presidency Preparations

D/Finance gave a comprehensive overview indicating anything they anticipate will arise in

the international financial services area during the Irish Presidency:

2012 sees the Danish and Cypriot Presidencies. This will form the backdrop to the Irish

Presidency.

Danish Presidency

The Danes have identified a number of priorities in Financial Services and have plans to

make progress on the 10 Financial Services dossiers currently under ECOFIN and the 2

Financial Services files which will fall under the Competiveness Council.

They hope to secure either a first or second reading agreement with the European Parliament

on the following dossiers:

i. Mortgage Credit Directive

ii. CRD IV

iii. Deposit Guarantee Schemes

iv. Omnibus II

v. Investor Compensation Schemes

vi. EMIR

vii. Venture Capital Funds (Competitiveness Council)

viii. Social Entrepreneurship Funds (Competitiveness Council)

Denmark hopes to get an agreed general approach at Council on the Credit Ratings Agencies

dossier and on the Transparency dossier. This would then leave the Trilogue negotiations to

the Cypriot Presidency and possibly the Irish Presidency.

It is the Danish intention on the Central Securities Depositories and MIFID and Market

Abuse to produce a Progress Report at the end of their 6 months. These two files will then

fall into the Irish Presidency at Trilogue stage, if not finalising negotiations on a common

approach.

EU Commission proposals

Denmark will also deal with a number of forthcoming proposals from the Commission if and

when they are adopted:

Crisis Management (Bank recovery and resolution) – end January/early February.

Discussions within the Commission are being finalised but there remains a problem regarding

choosing a date to release this. A worsening of the banking situation may lead to further

delay.

Central Securities Depositories – end January/early February

Protection of Investors (PRIPS) – end February/early March

Insurance Mediation Directive – end February/early March

UCITS V – April

AIFMD LII – Quarter 2

Other matters

Work is also ongoing on the non-legislative file on Shadow Banking. The Commission will

put forward a communication on this by end March and will be holding a conference around

27 April

Cypriot Presidency Negotiations on the following files will be initiated by the Cypriot Presidency and will form

part of the Irish Presidency agenda:

Directive on legal certainty of securities holding and transactions (SLD)

Institutions for Occupational Retirement Provisions (IORP) – The Department of Social

Protection take the lead on this file.

Close-out Netting

Irish Presidency planning

The agenda is evolving and will become clearer as the Danish and Cypriot presidencies

progress.

Discussions with the Commission and Trio partners [Lithuania and Greece] will be important

part of the decision making process on priorities.

The Minister for Finance and the Government will decide on our priorities.

Trilogue discussions with European Parliament will be a key part of the Irish Presidency.

D/Taoiseach updated the Group on Presidency preparations and priorities for the Irish

Presidency. At the last two IDCCP meetings in November and December 2011, Departments

highlighted emerging issues and draft legislation that is likely to figure on Ireland‟s

Presidency agenda in 2013.These discussions will feed into the Trio and national Presidency

programming process. Regular meetings are taking place with Attachés focussing on

emerging sectoral priorities and this work will also contribute to the clearer definition of Irish

Presidency themes. The IDCCP will continue to evaluate and refine the Presidency priorities

and to assess emerging overall themes.

It was also reported that the Presidency would largely be based in Dublin and that it provided

a unique promotional opportunity for Ireland to assist in rebuilding Ireland‟s reputation in

Europe and internationally.

6. Budget and Finance Bill process

In December‟s Budget, the Minister announced the introduction of a new Special Assignee

Relief Programme and a new Foreign Earnings Deduction for temporary assignments to

BRICS countries in order to help address this issue.

The Minister also reiterated the Government‟s commitment to the 12.5% corporate tax rate

and announced that Finance Bill 2012 would contain a further package of measures to

support the IFS industry.

The Finance Bill will be published on 9 February.

As mentioned at the November 2011 CHG meeting, the Tax Policy Unit in the Department of

Finance has been working closely with the different industry subgroups in the run-up to the

Finance Bill and three further meetings took place in December and January.

D/Finance pointed out that when considering industry proposals, they must also be mindful of

Ireland‟s tax reputation.

In this regard, in relation to the Funds Industry proposal for the introduction of a bespoke tax

regime for a new type of investment vehicle – an „Alternative Investment Company‟

D/Finance said they had to consider the broader implications of individual proposals in terms

of their potential impact on Ireland‟s reputation.

It was the Department‟s view that the introduction of such a vehicle could be viewed

negatively by our Treaty partners as overly aggressive and as a result, the proposal was not

being considered for the Finance Bill.

The Department understood the industry‟s disappointment but highlighted that virtually all of

the other issues contained in the Funds Industry pre-Budget submission were being

progressed and that the Department is working with the Funds industry to develop a new

corporate funds structure in Ireland.

There are between 15 and 20 individual measures under consideration. The aim of a number

of these measures is to simplify the tax treatment applying to complex financial transactions

in order to make it easier to do business.

7. Report on Central Bank / industry engagement Discussions are ongoing between the Central Bank and industry, and meetings will take place

over the coming weeks.

8. Marketing IDA/IFSC Ireland

IDA reported that the 2012 marketing programme was underway. A number of forthcoming

international events involving the Taoiseach, the IDA and IFSC Ireland were outlined. IDA

was cautiously optimistic on the prospects for 2012.

Martin Fraser informed the meeting that a high profile inward visit from China was

earmarked for February and that the Taoiseach would visit Davos in February and a number

of cities in the US as part of the St Patricks Day celebrations.

9. AOB

John Murphy said that a Jobs Action Plan was being finalised within D/JEI and would be

announced shortly. He also mentioned that consideration was being given restructuring

within the Department and its Agencies.


The next meeting takes place at 5pm on Tuesday 3 April 2012 in the Italian Room, Ground

Floor.

IFSC Clearing House Group 24 November 2011


Attendance





Ann Nolan D/Finance



Jim Byrne Revenue



Breda Power D/JEI

Brendan Bruen FSI

Tom Young FIBI


Brian Daly KPMG






Peter Keegan BOAML

Pat Wall PWC

Deirdre Somers ISE


David Guest Ulster Bank



1. Apologies

Fergus Murphy FSI

Tony Golden CITI

John Feely Attain

Gary Palmer IFIA


The Minutes of the meeting of 14 July 2011, as circulated, were agreed.

3. IFSC Strategy Implementation

Brendan Bruen updated the group on implementation of the IFSC strategy. A proposed road-

map for Q1 2012 was circulated outlining a number of actions. The goal was to tie down the

high-level objectives that had been agreed to specific initiatives, timelines and ownership. In

areas where clear responsibility lies with an existing body or working group, this would be

formally delegated.

The Working Groups were being asked to complete work plans by the 28 February on aspects

of the strategy that were sector specific. Cross-sectoral strands were also on-going, and a

consolidated plan would be prepared for the March meeting of the group. In implementing

the strategy, consideration will be given to the establishment of standing cross-sector groups

where appropriate, if necessary adjusting the meeting frequency of the sector working groups

to keep workload constant.

Timelines were agreed as:

By Jan 31 – Industry submission to Central Bank

By Jan 31 – Go-live of IT resource

By Feb 28 – Each Working Group to document implementation and ownership plans

and provide to the Department of the Taoiseach.

By Feb 28 – Work plans (supported by workshops if necessary) on

o Education and skills

o Tax priorities

o Shared services, ICT/FS convergence

o Targeting of Asian market

o Coordination of international engagement and marketing

March - Broad industry workshop involving CHG and Working Groups to review

progress and identify outstanding items.

4. Green IFSC Evaluation process

David Guest confirmed that he and other members of the Green IFSC Steering Group were

scheduled to meet the Chairman of the review panel, John Travers, on 28 November.

The Review panel is to meet twice in December including a meeting with the full Steering

Group on 20 December. He also emphasised the importance of completing the review process

within a reasonable timeframe, ideally by end January 2012.

5. Budget and Finance Bill process

Ann Nolan reported to the meeting that:

The Tax Policy Unit in the Department of Finance has met with the tax subgroups of the

various IFSC sectors: funds, banking and treasury, insurance, Green IFSC and international

asset financing in the run up to the Budget and Finance Bill.

In total more than 10 separate meetings have so far taken place.

A specific paper on tax issues impacting on the IFSC prepared by the Department of Finance

was discussed recently by the Government's Tax Strategy Group.

Many of the issues raised by the various tax subgroups were sector specific and these are

being pursued bilaterally in the context of the forthcoming Finance Bill which will be

published early February 2012.

Some issues raised cut across different IFSC sectors. The most prominent issue has been in

relation to SARP - the Special Assignee Relief Programme.

It is hoped that a significant package of IFSC supportive measures will be included in the

Finance Bill.

Obviously, given the current state of the public finances, the focus has been on progressing

issues with little or no cost for the Exchequer.

The Budget speech is currently in preparation. The speech will once again outline the

Government's absolute commitment to the 12.5% Corporation tax regime.

6. Report on Central Bank / industry engagement

Matthew Elderfield reported that a very useful meeting had taken place between the senior

regulatory management team of the Central Bank and senior industry representatives in

September at which the Central Bank set out its strategy for 2012, including setting out the

banking and supervisory challenges, rolling out the new supervisory approach (PRISM) and

reforming supervision and regulation.

Pat Farrell said that industry would send in a formal response before January 31 2012.

Matthew Elderfield indicated that bilaterals with industry would continue in the future. The

Chairman concluded that this was a useful exchange and the bilaterals were a good forum for

discussing regulation specific issues.

7. Marketing IDA/IFSC Ireland

IDA Ireland provided an update on the pulse of their international financial services business;

- Activity within the Sector is strong, based on site visits, investor queries and investments

won;

- Overseas marketing activity continues apace and has been enhanced by the effective

collaboration with IFSC Ireland;

- Client feedback on the various platform events put in place with IFSC Ireland has been very

positive and further events are planned for 2012 in Frankfurt, New York, Brussels and

London;

- IDA plans to allocate additional resources to its financial services Division during 2012

through internal redeployment;

- The recent joint venture with the funds industry whereby IDA's overseas office network will

act as representative offices for the Sector is a further positive development.

Pat Farrell updated on the activities of IFSC Ireland. There were two important dimensions

to John Bruton‟s programme in 2011; overseas promotional visits to target markets in

collaboration with IDA Ireland and industry representative bodies, bilateral meetings both

here and overseas with firms interested in making new or additional investment into Ireland.

An important complimentary aspect to John‟s work was his strong articulation of the Ireland

Inc story as an integral part of the overall messaging.


The next meeting takes place at 10am on Wednesday 18 January 2012.

IFSC Clearing House Group 14 July 2011


Attendance

Dermot McCarthy (Chair) D/Taoiseach




Jim Byrne Revenue

Bob Keane D/ETI

Fergus Murphy FSI

Brendan Bruen FSI

Tony Golden CITI


Brian Daly KPMG







Peter Keegan BOAML

Pat Wall PWC

Aileen O‟Donoghue ISE

Breda Power D/JEI




Gary Palmer IFIA

1. Apologies

Kevin Cardiff D/Finance


William Beausang D/Finance

Neil Ward BMO


John Feely Attain

Deirdre Somers ISE


The Minutes of the meeting of 23 June 2011, as circulated, were agreed.

3. Adoption of Strategy Document

In relation to the IFSC Strategy, the Chair noted that the document agreed by the Group at its

previous meeting had been finalised and approved by Cabinet. Printed versions of the

document were circulated at the meeting and would be made available online later in the day.

The Taoiseach would be formally launching the Strategy and holding a press conference

immediately after the conclusion of the meeting.

4. AOB Tim Hennessy noted that further discussions had taken place between industry and the

Department of Finance in relation to a possible call on the Insurance Compensation Fund

arising from the failure of Quinn Insurance. The compatibility of the levy provisions with the

Non-Life Directive was in question and concerns had been raised at an EU level by both DG

Internal Market and DG Competition.

The Chair indicated that this would be his last meeting in the role, and thanked the Group for

their work. Brendan Bruen expressed thanks on behalf of the industry to the Chair and a

presentation was made to the Chair in appreciation of his work and dedication over many

years.

5. Next Meeting The next meeting takes place at 8.30am on Thursday 8 September, 2011.

IFSC Clearing House Group 23 June 2011


Attendance





Jim Byrne Revenue

Bob Keane D/ETI

Fergus Murphy FSI

Brendan Bruen FSI

Tony Golden CITI


Brian Daly KPMG







Peter Keegan BOAML

Pat Wall PWC

Aileen O‟Donoghue ISE

Breda Power D/JEI


1. Apologies


Gary Palmer IFIA




Neil Ward BMO


John Feely Attain

Deirdre Somers ISE


The Group observed a minutes silence in respect of the late Mr Brian Lenihan T.D., Mrs

Betty Tobin, Mrs Molly O‟Dea and Mr Liam Donlon


The Minutes of the meeting of 12 May 2011, as circulated, were agreed.

3. Marketing and Messaging of the industry

Pat Farrell and IDA reported that an update on the IFSC Ireland programme of events is to be

provided and circulated to the Group.

A set of proposed events with John Bruton (IFSC Ireland) are being considered for 2012.

4. Adoption of Strategy Document

The Chair proposed the final draft of the strategy document as circulated for adoption on

behalf of the Group and for submission to Government. Two amendments of an

uncontroversial nature were noted as pending in respect of educational links and payments.

Brendan Bruen thanked industry and public sector members of the group for their assistance.

He noted that further work was now being undertaken to plan implementation and ownership

of the various elements of the strategy. The Chair thanked the Group for their contribution in

bringing the Strategy to completion.

The proposal to adopt the strategy was agreed unanimously and the Chair indicated that it

would be submitted to Government in the coming weeks.

5. Green IFSC

Padraig Rushe reported that the implementation plan in draft form was now with the IDA and

EI for validation. He said it was a comprehensive document covering all aspects of the

transition to a global low-carbon economy.

Kieran Donoghue acknowledged that the IDA received the document on 10 June and that the

intention was to establish an Expert Group with international expertise to evaluate the

proposal and funding by September 2011.

6. AOB Tim Hennessy updated the meeting on the Insurance Compensation Fund, the concern of the

industry that the statutory basis of the Fund no longer reflects the reality of the non-life

insurance industry established here, and the severe competitive damage that the imposition of

the proposed levy would have on the international industry. It was noted that since the last

CHG meeting, the Taoiseach had written to Minister Noonan highlighting the concerns of the

international non-life insurance industry.

7. Next Meeting The next meeting takes place at 9.30am on Thursday 14 July, 2011.

IFSC Clearing House Group 12 May 2011


Attendance





Jim Byrne Revenue

Bob Keane D/ETI

Fergus Murphy FSI

Brendan Bruen FSI

Tony Golden CITI



Brian Daly KPMG




Gary Palmer IFIA


Pat Casey D/Finance




1. Apologies




Pat Wall PWC

Neil Ward BMO



John Feely Attain

Deirdre Somers ISE

Peter Keegan BOAML

Breda Power D/JEI


The Minutes of the meeting of 23 March 2011, as circulated, were agreed.


Following a full calendar of activity year to date, there are now confirmed IFSC Ireland

events in London and Paris in June and September respectively. Additional opportunities are

being assessed, with a view to trips to Asia and South America in Q3 / Q4 2011. The goal is

to have engagements planned 6-9 months in advance, ensuring opportunities are maximised

and relevant meetings can be secured.

A successful event was also held in the ISE on 13 April, receiving positive media and

industry recognition.

IFSC Ireland is a privately funded body, and is not a representative or lobby group. It will be

engaging with international financial services companies to seek patron support over the

coming weeks.

4. Strategy Document – Update

A draft Industry Strategy paper discussed with the Working Group Chairs was circulated to

the other industry CHG members and feedback is now being received. The approach is

around key issues for the business environment, and the document should be relatively

uncontroversial. The next step is for the public sector to consider the material prepared, and a

meeting of the previously constituted Steering Group should take place to finalise the draft.

In parallel, the document will be circulated to a wider industry group to further develop

specific points. It is hoped to be able to present an agreed document at the next CHG

meeting.

5. Green IFSC

1) Green IFSC business plan development is nearing completion with a due date of 20 May

2011. The plan sets out the global context for a green IFSC Initiative and resources required

to achieve the vision over a 36-month period. In closing out the plan, the Green IFSC

Steering Group is being assisted by Accenture, KPMG and PwC.

2) Green IFSC brand development is scheduled for completion by 13 May 2011.

3) Green IFSC educational and skills strategy development is underway. Action Plan report

will be formulated within the next three-months. Forfas is assisting this process.

4) Green IFSC activity, to date, has been kept low-key as building out and developing real,

tangible support initiatives/strategies for the vision continues. Communicating to the wider

business community, domestic and internationally, is scheduled to begin in June.

6. AOB Pension Funds Levy

Dave Fagan said he had been in contact with the Chair of the Pension Funds Group who

highlighted the potential impact this could have on cross-border pension funds.

Firstly, the impact would depend on how any levy is implemented:

· If it is levied on all pension arrangements established in Ireland, then it will put

an end to any prospects of establishing cross-border pension schemes in Ireland.

· If it is levied on Irish pension funds excluding assets in respect of overseas

members then there is still a risk that Irish pension funds will move to somewhere like

Belgium where no levy would apply.

· If it is levied on pension assets for Irish members, irrespective of the location of

the pension fund then, in theory it should have no effect.

Secondly, the Chair was of the opinion that the introduction of a pensions levy would give a

generally negative view to the market of Ireland‟s support for pension‟s schemes and the risk

of further changes will make it difficult to encourage multinationals to choose Ireland as a

base.

Insurance Compensation Fund

The Group agreed, following concerns expressed by the international non-life insurance

sector representatives, that the Taoiseach should be briefed regarding recent press/media

reports stating „that the Administrator of Quinn Insurance Limited would request a call from

the Fund totalling €600 million of which approximately €180 million would occur in late

2011‟.

The Group was informed that insurance guarantee schemes throughout the EU are under

review at present with a view to harmonisation. The international non-life insurance industry

has requested serious engagement with the Department of Finance to consider how the Quinn

deficit should be appropriately funded and to review the Act given the composition of

Ireland's current non-life market.

7. Next Meeting The next meeting takes place at 8.30am on Thursday 23 June, 2011.

IFSC Clearing House Group 23 March 2011


Attendance





Jim Byrne Revenue

Bob Keane D/ETI

Fergus Murphy FSI

Brendan Bruen FSI

Tony Golden CITI



Brian Daly KPMG




Gary Palmer IFIA


Breda Power D/JEI

Paul O‟Connor IBF



John Feely Attain


Deirdre Somers ISE

Peter Keegan BOAML

1. Apologies


Pat Wall PWC

Pat Casey D/Finance





Neil Ward BMO


The Minutes of the meeting of 27 January 2011, as circulated, were agreed.

Tim Hennessy updated the meeting on the Statutory Audit Directive (SI 220 of 2010).

Arranged by D/EJI, DIMA attended a meeting along with D/Finance and Central Bank of

Ireland representatives. DIMA's strong preference is for re/insurance companies to be

exempted from the public interest entity ('PIE') definition - the UK and Luxembourg which

are competing international insurance centres opted for this exemption in their

implementation of the Directive. Mr Hennessy suggested that the D/EJI had gold plated the

implementation by requiring two independent directors per the SI as opposed to one within

the Directive. The D/EJI appeared unwilling to amend the SI to exempt re/insurance

companies from the PIE definition but seemed willing to address the confusion caused by the

definition of 'independent director' and to look at the appropriateness of the SI for captive

re/insurers.

Mr Hennessy expressed concern at the compounding impact of regulation / legislation. In the

case of SI 220 there is duplication and inconsistency with the CBI Corporate Governance

Code of 2010 (the 'Code'). The CBI Code is effective from 1 January 2011 with transitional

provisions to 30 June 2011. Despite this industry still awaits the FAQ's from CBI - the delay

in clarification is making it difficult from a practical perspective for companies to progress

their implementation until issues which required clarification are addressed by CBI.

Referencing the discussions at previous meetings on the proposed regulatory guidelines for

the implementation of the 3rd AML Directive, Gary Palmer noted that a number of

significant issues still remained. Noting that the funds industry was an internationally dis-

intermediated industry the issues around the reliance on third parties and what

activity/information must be undertaken by Irish industry companies was of particular

concern. It was reported that a meeting to include the Department of Finance, the Central

Bank and industry representatives had been scheduled where it would be important to ensure

the conclusion of a framework that provided for an internationally focussed industry,

especially in the light of the challenges posed by the prevailing negative sentiment towards

Ireland.

David Fagan told the meeting that there has recently been a range of new regulatory measures

affecting the industry such as CP41, new Fitness and Probity proposals, SI220 etc. While

these may all make sense individually he felt that it is important that some forum is created to

look at the cumulative impact of these, consistency between them and the communication

around them.

Willie Slattery expressed concern and disappointment that there had been no consultation on

the Audit Directive. He saw no obvious rationale as to why there had been no such

consultation. He stressed that the international financial services industry were fighting to

protect employment and that promulgating legislation in this way was unreasonable

behaviour. He was also concerned with Ireland‟s rating downgrades and specifically the

impact of another downgrade, the possibility of junk status and a potential default rating. He

believed that the regulatory terms now being applied in the domestic banking sector were

over reaching unreasonably into the international financial services sector.

Breda Power told the meeting that the Department of Jobs, Enterprise and Innovation had

specifically consulted with the Funds Industry on the Audit Directive. It had also had a

productive meeting with DIMA and the Central Bank and had sought further information

from the Central Bank which they were still awaiting. The matter is still being considered.

Michael Deasy said that the Central Bank would be issuing a FAQ document in the coming

weeks. In reply to certain observations that some requirements were excessive, particularly

vis-à-vis other jurisdictions, Mr Deasy said that the Bank made no apologies about insisting

on high corporate governance standards, particularly in the current climate. He said that he

was disappointed in many of the queries received to date - their intention was to whittle away

the effectiveness of the Code.

Brendan Bruen noted that non-compliance with the corporate governance code was

potentially very serious, and that it was reasonable for firms to expect clarity and consistency

of interpretation and application.

Tim Hennessy reiterated that industry required a robust regulatory regime but when

requirements exceed international best practice then Ireland‟s ability to retain and attract

international financial services is hampered.

The Chair emphasised the need to strike a balance by demonstrating commitment to robust

yet sustainable regulatory standards, and recognising that regulation will have to take account

of the cumulative impact. A meeting is to be convened with appropriate industry and public

sector representatives to consider the impact existing and proposed regulation / legislation

was having on industry particularly where industry consider that Ireland's requirements go

beyond international best practice. The Chair said that these concerns could also be

considered in the drawing up of the strategy document.


Gary Palmer reported to the meeting on the activities of IFSC Ireland and specifically on the

events of the previous week in the US. During the week a significant number of meetings

and events were held, led and attended by the President of IFSC Ireland (John Bruton) and

included both the various industry sectors and State agencies. From a funds industry

perspective and particularly in the current environment Mr Palmer noted the value and

importance of having a leading representative that can address the current concerns and

highlight the separation between domestic issues and an international industry.

Barry O‟Leary updated the group on the IDA‟s efforts to counter negative publicity about

Ireland, and noted that the IDA is in the process of having high-level meetings with major

multi-nationals. The largest 65 IDA clients were responsible for 80% OF FDI jobs, and IFSC

firms comprised 12 of these.

The Chair said that the Government recognised that a systematic and strategic approach was

needed with appropriate resources. Developments in the domestic economy had clearly had a

serious impact on Ireland‟s image, but there was still support internationally. However,

clarity around the operating environment and a holistic approach were needed. He noted that

the Government had been very explicit around its commitment to the 12.5% tax rate, and the

Department of Finance and the IDA were articulating that message.

Willie Slattery said that the industry strongly supported the efforts of the public sector, but

noted that very serious damage had already been done, by the sovereign downgrades in

particular.

Gary Tobin noted that aggressive tax structures posed a real risk to the reputation of Ireland,

and that they would be dealt with appropriately by the Department of Finance.

Deirdre Somers commented on the very positive support which the ISE has received from

IFSC Ireland in its marketing efforts in the US and the Middle East. In particular she said

that John Bruton's Presidency of IFSC Ireland was hugely important in dealing head on with

the very real concerns which the market has about Ireland, given the amount of negative

publicity at present and the uncertainty relating to the tax rate.

4. Strategy Document – Update

Brendan Bruen updated the Group on the development of a strategy for the IFSC. An industry

workshop had been held with excellent representation from the different firms and

associations involved. Everyone was committed to moving the process to a completion as

soon as possible, and agreed that the focus of the strategy should be to improve the general

environment, with targeted support for specific initiatives where necessary. A key theme to

emerge was the increasing role of technology in provision of services.

A draft SWOT analysis had been prepared and was being worked on by industry participants.

Key positives included the critical mass of existing players, the global franchise, reduced cost

base and traditional strengths of an English-speaking workforce, geography, euro and EU

membership. On balance, there is still a positive perception of the legal, tax and regulatory

environments. Negatives included the sovereign weakness, reputational damage and the

marketing challenges associated with it, personal tax regime, and the uncertainty around

regulatory and legislative changes. Further threats include intense competition from both

established and emerging centres, and the dangers arising from a "knee-jerk" reaction to the

domestic banking issues.

The headline goal should be around job creation, and the workshop considered that 25,000

new jobs over a 5 year period should be adopted as the target, with an associated generation

of tax revenue and the reclaiming of a place as a top 10 financial centre. Opportunities to

achieve this were identified across areas that include: emerging markets and non-traditional

areas of business, green financial services, specialised services and RD&I, alignment with

Ireland's position as an ICT leader, payment services, insurance hubs, new products and

markets in life insurance and the broadening of activities and moves up the value chain in

funds and asset management. The approach of the Central Bank to regulation of IFSC firms

had been highlighted as crucial. Industry was not seeking a reduction in standards, but sought

a system which was predictable, consistent and efficient. The volume of change both in terms

of new requirements and the structure of the organisation was creating real challenges.

He suggested that work continue on the industry side around (a) a high-level strategy

statement, (b) a more detailed supporting document and (c) bi-lateral meetings with

appropriate public sector stakeholders, including the Central Bank as a priority.

The Chair thanked him for the update, and suggested that the steps outlined be progressed as

a matter of urgency.

5. Green IFSC

Padraig Rushe advised that the Green IFSC was being rebranded as 'Global Green

Interchange' following a review of the image and branding of the initiative. Since the last

Clearing House Group, where the Taoiseach launched the initiative, the Steering Committee

has met and the final draft proposal on the carbon element will be available next week for

submission to IDA/EI for their review. It is anticipated that a final document will be

submitted to Government by Mid April.

Separately the green finance aspects are being progressed and McKinsey will be involved in

updating and validating the original projections and assumptions that formed part of the

feasibility study. A further Steering Group session will take place in April to continue this

process. At this stage it is hoped to have the implementation plan fully operative in early

May.

6. Next Meeting The next meeting takes place at 9.30am on Thursday 12 May, 2011.

Documents

IFSC Clearing House Group 25 September 2012 Department of the