IRELAND Trends and Developments Contributed by: Grainne Callanan and Elaine Long, Matheson LLP
2010 because those standards apply to individuals performing functions. The Central Bank also noted that, “ Crucially, this is not a compliance obligation owned by risk or compliance staff, but one owned by the whole organisation. ” Changes and clarifications to digitalisation CP158 proposed a number of new requirements regarding the provision of financial services through digital means, targeted at ensuring that firms are cus- tomer-focused in the design and implementation of digital services and delivery channels. The Central Bank explained that to enhance support for consumers when using digital platforms, and to support firms in implementing the requirements, it has developed guidance to support the implementation of the digitalisation requirements in the CPC. This guid- ance covers areas including filtering of information, scrolling, and the use of hyperlinks, and can be found in the overarching General Guidance on the Consumer Protection Code (“General Guidance”). In the Feedback Statement, the Central Bank high- lighted elements of the original proposal in CP158 which were either changed or clarified, some of which are as follows: • pauses – the proposed requirement on pause statements was changed to focus on the need for firms to consider the impact of the dynamics of online transactions on consumer decision-making. In addition, to apply pause statements where the risk is high of consumers entering into transactions that may be unsuitable due to the speed and ease of the online process. This requirement is sup- ported by the General Guidance which provides examples of online transactions where this risk arises (Box 3 of the General Guidance refers); and • digital platform and interaction with AI – it was clarified that the term “digital platform” in the CPC refers to a channel through which the consumer engages with the financial services provider using technology. The Central Bank acknowledged that a digital platform may include elements of artificial intelligence (AI) to carry out or augment certain business processes. This could include the use
of GenAI. The CPC does not duplicate the AI Act, which establishes specific obligations for the use of artificial intelligence in certain financial services products and scenarios. The Central Bank also explained that further guidance on the application of the AI Act requirements will be developed throughout 2025 and 2026, in line with the AI Act’s overall timelines. Changes and clarifications to informing effectively CP158 proposed a new standard for business, requir- ing firms to effectively inform their customers through their communications and disclosures. Firms must now ensure that, rather than merely disclosing infor- mation, they communicate in a way that effectively informs consumers. The Central Bank developed guidance for firms to support their implementation of requirements regard- ing effective information. This guidance includes examples that illustrate the actions and steps firms can take to ensure they are informing effectively, including where the content of disclosures is man- dated by regulatory requirements (see section 2.2 of the General Guidance). The General Guidance also provides an overview of important considerations for firms when developing and designing customer communications. Changes and clarifications to unregulated activities In order to reduce the possibility that consumers might not be aware of the status of a product or service and the accompanying risks associated with unregulated financial products, CP158 proposed a supporting standard for businesses requiring firms to take steps to mitigate the risk that a consumer might misunder- stand a product or service to have the protections of a regulated activity. The Feedback Statement confirmed that: As regards unregulated activities carried out by regu- lated entities, it was clarified that under the CPC’s Supporting Standards for Business, firms are required to clearly distinguish between their regulated activities and their unregulated financial activities by taking all
245 CHAMBERS.COM
Powered by FlippingBook