Central Bank of Ireland Consults on Guidance on Operational Resilience
The Central Bank of Ireland announced that the Virtual Asset Service Providers (VASPs) in Ireland are now required to comply with the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) obligations. This follows as the Fifth Anti-Money Laundering Directive (5AMLD) of EU has been transposed into Irish law by way of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021. VASPs are required to register with the Central Bank for AML/CFT purposes and have three months to apply to the Central Bank for registration. Additionally, the Central Bank of Ireland proposed the guidance on operational resilience of all regulated financial service providers, with the consultation period ending on July 09, 2021.
The proposed guidance on operational resilience is intended to enhance operational resilience and recognize the interconnections and interdependencies, within the financial system, that result from the complex and dynamic environment in which firms operate. The guidance is built on the three pillars of operational resilience—Identify and Prepare, Respond and Adapt, and Recover and Learn. These pillars support a holistic approach to the management of operational resilience and related risks and create a feedback loop that fosters the perpetual embedding of lessons learned into a firm’s preparation for operational disruptions. The guidance:
- Communicates to the boards and senior management of regulated financial service providers, the Central Bank’s expectations with respect to the design and management of operational resilience
- Emphasizes board and senior management responsibilities when considering operational resilience as part of their risk management and investment decisions
- Requires that the boards and senior management take appropriate action to ensure that their operational resilience frameworks are well-designed, are operating effectively, and are sufficiently robust, in an effort to ensure that risks to the firm’s operational continuity do not transmit into the financial markets
In developing these proposals the Central Bank considered the responses to an operational resilience maturity assessment conducted across a sample of financial services firms in the fourth quarter of 2020. These self-assessments were designed to gain an understanding of firms’ views of their level of operational resilience preparedness. The assessment indicated that firms need to build on existing business continuity management approaches to take an end-to-end business services approach to the operational resilience of critical or important business services. The objective of this consultation exercise is to understand the views and experiences of stakeholders in advance of finalizing the guidance to industry on how to prepare for, respond to, and recover and learn from an operational disruption that affects the delivery of critical or important business services.
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Comment Due Date: July 09, 2021
Keywords: Europe, Ireland, Banking, Operational Resilience, AML/CFT, Virtual Asset Service Providers, Operational Risk, Business Continuity, Governance, Central Bank of Ireland
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