1

 

Annual Dinner addresses Brexit and US election result Held in the Intercontinental Hotel on 9 November, with International Economist John Kay, Minister Pascal Donohoe and Independent Group Business Editor Dearbhail McDonald, the event addressed the momentous topic of the election the day before of Donald Trump as US President and the Brexit Referendum result last June.

Some days after the Brexit result FSI had led industry with a high level seminar on the implications for Ireland.

FSI's annual dinner was an opportunity to put Brexit in a broader context alongside the US election result.

John Kay addressed the underlying causes of political alienation across Western Europe and warned that there could be more disruption to come when France and Germany vote in general elections next year.

Minister Donohoe said politicians would have to listen carefully to the signals being sent to them by voters and also said economic systems would have to demonstrate fairness in the allocation of resources if they were to remain credible.

Dearbhail McDonald chaired the event.

The Chair in interesting times Page 2 The “Brump” factor: How 2016 changes the landscape for financial services in Ireland Page 2 FSI Education and Skills initiatives meet with Minister Eoghan Murphy TD Page 3 FSI calls on international finance centres to cooperate post Brexit and US election Page 4 FSI Working Group update Page 5 FSI/City of London Partnership Page 5 FSI Regional Footprint Page 6 Fintech Page 7 Overview of implications of Finance Act 2016 on IFS Pages 7—9 FSI stewards IFS2020 through crucial year Page 9 A busy year in hindsight Page 10

FSI Update December

Issue 4 WWW.FSI.ie

The “Brump” factor: How 2016 changes the landscape for financial services in Ireland

Marc Coleman, Director, FSI.

“All is changed, changed utterly”. Those were the words of William Butler Yeats on the outbreak of the 1916 Rising whose centenary was celebrated this year. And this year has been just as momentous a year for the world as 1916 was for Ireland. At first Brexit and then the election of Donald Trump have arisen as separate events with their own specific challenges. And when both happened, FSI was well ahead of the posse with a pre-organised Brexit seminar organised as early as

Susan Dargan, Executive Vice President, Country Head - Ireland, State Street, John Kay, Paschal Donohoe T.D., Minister for Public Expenditure and Reform and Dearbhail McDonald Group Business Editor for Independent Group

Con�nued on page 2 

2

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

The Chair in interesting times Little did I think when I took on the role two years ago that we would be facing in to a Brexit and a Trump Presidency by the time I had completed my term. Then again, perhaps we in the financial services sector need to get used to a less predictable future. If the last decade has taught us anything it is that we should not rely on old assumptions. That we have to build more flexibility into our projections because we simply cannot plan for all eventualities.

And we need to build in stability and predictability where we can. Not just to reassure ourselves, but also because it provides a clear competitive advantage.

Take Brexit as an example and the questions it raises. Like how the planned departure of the British voice in Europe will impact in areas where that voice was a strong ally to Ireland. Areas such as the Capital Markets Union agenda, or the drive for Better Regulation. At this point, as with so much else about Brexit, the answers are unclear and the future’s uncertain. And businesses hate uncertainty.

So what FSI is doing, and what we’d encourage every other business representative body and state agency to do, is emphasising what’s not changing.

Ireland is still part of the EU, has a common law system, and is open for business. We have a highly motivated and skilled workforce, a by every available measure, this is a good place to work and live. But we need to be sensible about this. Ireland is not in the business of persuading companies to move that are intending to stay where they are. But where a company is looking for a new home, we should be and are rolling out our impressive welcome mat.

Something that was predictable when I took up the role of Chairman at FSI was the continued growth of the International Financial Services industry in Ireland. What is most pleasing about that growth is that it has taken place right across the country. It makes sense logistically and it makes sense from a social point of view. And, of course, IFS 2020, our guiding strategy, calls for this to continue.

Having that strategy in place has helped us cope with the unpredictability of the last few years. And that may be ultimately be the most important lesson to be learned. Having a strategy when everyone else is looking for one is a huge advantage. The time that FSI, the Industry Advisory Group, and Government (including the current and former FS Ministers), the IDA and Enterprise Ireland have spent doing work under IFS 2020 as well as creating it has been well spent.

In February, my tenure as Chair of FSI will finish and I would like to wish my successor, Joe Duffy of BNY Mellon, all the best. I want to express my appreciation to Marc and his team who have provided tremendous support to me in my role as chair. I would also like to thank my fellow board members for their support, insights and time. And, of course, I’d like to thank you the members of FSI for giving me this opportunity.

Susan Dargan, Executive Vice President, Country Head - Ireland, State Street and FSI Chair

The “Brump” factor: How 2016 changes the landscape for financial services in Ireland

(continued from Page 1, Marc Coleman)

last March for 29 June. And an annual dinner carefully timed on 9 November, the day that the results of the US election, the day before, became known. The separate impacts of Brexit and Trump were well analysed at both events (see coverage of Brexit in our previous Bulletin and page 1 of this Bulletin on our Annual Dinner).

What about the common consequences of Brexit and Trump? There is one very obvious one; the prospect that a new US administration could, together with a post-Brexit UK, diverge further from an increasingly continental driven EU on financial regulation.

On a cross sectoral level the invoking of Article 50 by the British government was, before November, likely to result in two outcomes:

Firstly the EU imposing a significant cost on the UK, both to discourage further exits but also to reward remaining member states with a share of the spoils. That was likely to involve the EU and key Member State regulators adapting micro regulatory changes to encourage activity to move from the City of London and, in at least one case, central counterparty clearing house activity, using the ECB to impose a legal requirement to do so.

Secondly efforts by the remaining member states to take advantage of the departing British voice by pursuing a more “dirigiste” view of how regulation should work. Post-US election, both of these likely trends are now likely to induce a stronger reaction from the UK than would have been the case in the event of a Clinton victory. As Trump’s aides have made clear, the new administration’s attitudes to Dodd Frank suggests a wish, if not to fully undo all the regulation enacted by Barack Obama, to at least

Marc Coleman

Director

3

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

 

significantly roll it back. Given the huge importance of financial services to the British economy, the UK’s stance in Brexit negotiations is likely to put a strong emphasis on either preserving passporting rights for its financial institutions doing business in the EU or in attaining quick and easy access to equivalence in a range of markets from funds to insurance and re-insurance and banking.

On merit, the UK should be expected to meet the criteria for equivalence in most or all of these markets. Politically, however, there will be a strong expectation that the UK must experience consequences for its decision and member states are likely to exert strong pressure to make life difficult for British institutions.

One particular example of this is one which gives a more general illustration of the Brexit challenge and also how the election of Donald Trump complicates an already complicated situation, is the issue of central counter party clearing facilities. At present 70% of derivative contracts denominated in euros are cleared in London. The ECB attempted to require this activity to be relocated in the Euro zone.

As the Court of Second instance in Luxembourg ruled last year, the UK could not be discriminated against in this manner – despite it not being a participant in the euro – so long as it remained in the EU. Now it seems that all bets are off and it would not be surprising if a renewed effort was made to bring such activity “home” to an EU setting. But now the UK has, pardon the pun, a “Trump card”.

A US Presidency – particularly one that is strongly of the view that American interests have been treated unfairly in trade deals and possessing a determination to rectify perceived injustices – may well respond to any EU

restrictions on US institutions operating out of London by levelling the charge of anti-competitive behaviour. Against the backdrop of rulings by the EU Commission in relation to Microsoft and Apple, there is already a somewhat charged atmosphere across the Atlantic. A hard line by either side could, exacerbated by growing signs of ideological differences between them, lead to escalation. Unless that is wiser heads prevail.

The irony in all this is that Europe in general needs London. As well as possessing a highly developed capital markets (three-quarters of all capital market activity in Europe takes place in London), London also boasts a clear and efficient legal and regulatory system, deep pools of talent and a pre-eminence in financial technology. For an industry on the cusp of a significant revolution that could change it forever, the latter is distinctly important. On the other hand, only the EU can through its regulatory agenda - ranging from the Commissions recently launched Fintech agenda through to regulatory initiatives aimed at harmonising activity across the EU such as PSD2 and MiFID II – create a level platform for financial services that can hope to match the US in size, efficiency and scope.

Sharing the dynamism and outlook of America’s business culture but being a committed partner of the EU and Euro member, Ireland may see itself pulled both ways in the coming year. But that too could be an opportunity. An opportunity to leverage Ireland’s unique position as an English speaking financial centre within the euro zone which possesses a common law system similar to the UK. Never have the challenges – and the opportunities – for Ireland’s international financial services sector being greater than they are now.

FSI Education and Skills initiatives meet with Minister Eoghan Murphy TD  

On 1 September 2016, Financial Services Ireland (FSI) and the National College of Ireland (NCI) met with Eoghan Murphy TD, Minister of State at the Departments of Finance and Public Expenditure and Reform, with special responsibility for Financial Services (see picture above). During the meeting the Minister was briefed on current education initiatives for the International Financial Services (IFS) sector being driven by FSI.

Brian McMahon, Summit Finuas Network Manager

outlined how the new Finuas strategy is aligned with the skills action points in IFS2020 and how the IFS sector has benefited from the c. €3.5 million in funding from the Department of Education and Skills, via the Skillnets Networks programme.

Carol Kenna, Project Manager - IFS Apprenticeships outlined to the Minister the progress being made under the IFS Apprenticeship initiative and the huge appetite and support from IFS to get this programme off the ground.

Deirdre Giblin, Head of Executive Education – NCI, highlighted how proud NCI were to work with both FSI projects to help upskill both employed and unemployed participants in order to meet the sectors growing education and training needs.

4

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

FSI calls on international finance centres to cooperate post Brexit and US election “If Europe can’t be strong, it must be clever” was the message that FSI Director Marc Coleman gave to delegates attending the Euro Finance Week in Frankfurt on Monday 14 November last. In the final panel debate of this major conference, entitled “What makes a successful financial centre?”, representatives of financial centres competing for post Brexit business were invited to set out their country’s stall before financial service professionals from around Europe. But the mood of panellists quickly turned to the need for European centres to collaborate to sustain Europe’s competitiveness.

Pointing to the new challenges posed by a Trump Presidency, Coleman said Ireland could help mediate between the Anglo American view of finance and a more “dirigiste” view from continental Europe. Edouard-Francois de Lencquesaing, Chairman of the European Institute of Financial Regulation, said that European values were shared by most of the EU’s member states and needed to be defended and communicated to Europeans by financial centres.

Concern was expressed by several panellists that the importance and benefits of projects like the Capital Markets Union were not sufficiently understood by political leaders. Marc Coleman said Ireland’s IFS 2020 strategy was a good example of how financial services could engage with government. He said that while they needed

to compete at one level financial centres in Europe needed to collaborate, adding that London needed to be part of this. “Technology and innovation is crucial to our industry and London is a world leader in this field. Europe needs access to this in future”.

When asked to cite advantages of locating in Dublin Marc Coleman pointed to the US election and stressed Ireland’s political stability; “Beware of post-Brexit promises from financial centres that could be self-reversing if political trends in those countries change”. Ireland’s strength as a financial centre was, he added, supported by Ireland’s clear lead in aviation leasing, the large size of funds in administration in Ireland and strong gains in employment in recent years. Eric Menges President and CEO of Frankfurt Rhein Main said that the Frankfurt region offered a highly efficient place to do business. Nicolas Mackel of Luxembourg for Finance said Luxembourg was Europe’s second leading financial services centre after London and offered a multilingual environment for business.

Citing as an example the issue of Central Counterparty Clearing facilities, Coleman cautioned against overreaction to either Brexit or the election of Donald Trump. “If the EU puts pressure on non-EU banks to relocate clearing activities from outside to within the EU after Brexit, this could prompt the US to respond by raising a charge of anti-competitive practices. We need to be careful”. Euro Finance week was hosted by the Maleki group and took place between 14 and 19 November.

5

 

December 2016 Issue 4 www.fsi.ie

Financial Services Ireland Update

FSI working group update The FSI working groups continue to be a key vehicle for FSI’s regulatory and public policy agenda. The addition of a Regulatory & EU Affairs Group in January 2017 will increase activity and streamline Brussels engagement on

cross-sector policy issues.

Some of the issues in H2 included:

- Anti money laundering, with heads of the new Bill to transpose the Fourth Directive expected by Christmas, also expected to be the vehicle for public consultation with the

deadline for transposition still summer 2017. The beneficial ownership statutory instrument was published, with a central register

expected mid-2017. The FATF conducted its visit in October, with a report on Ireland’s AML framework to be published next year.

- D/Finance consulted on MiFID II national discretions in September, with reference to the Insurance Distribution Directive and a CBI discussion paper on commission payments (banking, insurance and funds). This is an issue to watch in 2017.

- MiFIR Delegated Regulation C2016/2398 introduced a new definition of Foreign Exchange derivative contracts that excludes pure hedging activities—welcome news for corporate treasurers, and expected to supersede the CBI’s 2015 interim definition under EMIR.

- There was relief all round with the one year delay to PRIIPs, but focus soon switched to the extent of changes required in the RTS, and whether the revised framework will address industry concerns, particularly Article 14.

- New measures are proposed in the ECON committee’s

October report on retail financial services. The Commission’s Action Plan on the issue is expected shortly.

Sector-specific issues included Solvency II quarterly reporting on asset data, and consultation paper 86 for fund management companies—with focus on proposed director and designated person location requirements.

To get involved in FSI working groups, contact Audrey (details overleaf).

Audrey Crummy Senior Executive, Regulation & EU Affairs

FSI/City of London Partnership On Wednesday 26 October the Partnership met in State Street in Dublin (see picture on page 7). Capital Markets Union, ESG bonds and Green Finance were discussed.

The Better Regulation work stream, chaired by Furio Pietribiasi of Mediolanum and Nick Collier of Thomson Reuters, will shift its focus

from EU regulation to Brexit and ensure FS is on the radar of both governments in the Brexit negotiations.

Susan Dargan of State Street is the overall Irish Chair and Joanna Cound, Managing Director, BlackRock is the UK Chair. This partnership brings Irish and UK based financial services companies together to work on issues at both national and EU levels.

Since the Brexit result, there has been a shift from focussing on specific EU regulations to focussing on issues of mutual interest, including Brexit.

Aisling McNiffe Senior Executive Communications & Political Affairs

At the recent FSI Aviation Leasing workshop: L-R Padraig Rushe, Chairman, IFF, Audrey Crummy, Minister Eoghan Murphy TD, Brian Daly, KPMG.

6

 

FSI Regional Footprint

Almost 30 years on from when the IFSC was originally founded, Ireland has a thriving international financial services sector, employing over 35,600 in highly skilled roles throughout the island.

IFS2020 stated that the Government wanted to promote the whole of Ireland as a potential location for IFS firms

looking to expand or move their operations to Ireland. Ireland has now over 70 firms located outside of Dublin employing over 12,000 people.

Cork has a strong presence of fund administration firms such as BNY Mellon, Citco Fund Services and HedgeServ while Clare is a hub for aviation leasing firms such as GE Capital Aviation, Engine Lease Support Limited to Shannon Engine Support Limited.

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

Louise Kelly Member Services Executive

FSI Regional Footprint

Research carried out by the Summit Finuas Network and Accenture in 2015 found that the attrition rate is lower and retention is higher among regional companies compared

to Dublin. The research showed that graduates tend to seek opportunities in Dublin, while experienced candidates over 35 are looking for opportunities outside of Dublin.

With the Government’s stated aim for the industry to grow by an additional 10,000 jobs by 2020, FSI will be in contact with you in early 2017 to conduct further research on the numbers currently employed in the sector and what are the growth areas since we last published our findings in 2014.

FSI will also host a regional seminar in May 2017 to promote the opportunities and challenges facing IFS companies located throughout Ireland. If you or your organisation would like to be involved in this seminar, please contact Louise Kelly on 01 605 1605.

7

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

Fintech/Digital Work Stream in the FSI/City of London Partnership This group had originally planned to draft a vision paper for digital identity, however, due to the Brexit referendum result, this has changed. Its focus will be on building rapport between Irish and UK Fintech companies and seeing0 whether there are potential opportunities for partnership post UK leaving the EU. It is considering hosting an event in Brussels to educate MEPs and EU officials about Fintech.

Derek Butler, CEO of Grid Finance, has taken over as the Irish Chair of the Fintech work stream from Colm Lyon of Fire. Grid Finance is a peer-to-peer lending company. Dan Morgan is Head of Policy and Regulation at Innovate Finance in the UK and is the UK Chair.

Innovate Finance is an independent not-for-profit membership association representing the UK’s global Fintech community.

New Fintech taskforce unveiled by the European Commission On 14 November the European Commission announced it is to set up an internal Fintech taskforce. It will be made up of Commission officials working in financial and digital services, cyber security and consumer protection.

It plans to consult the Fintech industry in Europe and aims to publish policy recommendations in the first six months of 2017.

For more details, please visit

https://ec.europa.eu/digital-single-market/en/blog/european-commission-sets-internal-task-force-financial-technology

Overview of implications of Finance Act 2016 on International Financial Services Finance Act 2016 is a relatively short Finance Act compared to recent years and introduces few provisions focused on the financial services sector. The Act introduces a couple of anti-avoidance provisions to amend legislation which the Government felt was being used in a way for which it was not intended. The Act also makes some amendments to the Bank Levy, Deposit Interest Retention Tax and personal taxation which is relevant to companies operating in the financial services sector. 

Section 110 Securitisation Regime

Ireland’s securitisation regime has been the subject of much discussion in recent months. In his Budget speech, the Minister for Finance reiterated the benefit Ireland’s securitisation regime has been to our financial services industry. However, he suggested that the provisions are being used in ways which were not intended when the relevant section was introduced, particularly in relation to funds and property.

The Finance Act introduces new rules which, in broad terms, apply to the extent that a qualifying securitisation company owns financial assets (including loans) which derive their value or the greater part of their value (directly or indirectly) from Irish land and buildings. The general securitisation rules will continue to apply to this specified property business; however, interest deductions in respect of profit-participating loans will be restricted to the amount of interest that would have been payable on that loan had it been a non-profit participating loan entered into by way of a bargain made at arm’s length. Interest paid to certain categories of recipient (such as Irish pension funds, Irish companies, certain EU companies and certain Irish regulated funds) will not be restricted. As a result of these changes, securitisation companies which purchased loans

Members of the FSI/City of London Partnership who recently met in State Street, Dublin on 26 October 2016

Con�nued on page 8 

8

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

Overview of implications of Finance Act 2016 on International Financial Services (continued from page 6)

secured on Irish property at a discount could now be subject to Irish corporation tax at the rate of 25% on a significant part of the gains realised on those investments.

Taxation of Irish real estate funds

As indicated by the Minister for Finance in his Budget speech, the Act contains changes to the tax treatment of

certain Irish regulated funds which hold Irish real estate assets. The Act introduces a new withholding tax (at a rate of 20%) in respect of certain Irish property-related distributions and redemptions made by Irish Real Estate Funds (IREFs) to certain unit holders not within the charge to Irish tax. The rules will apply to non-UCITS authorised funds established as unit trusts, investment companies, or Irish Collective Asset-Management Vehicles (ICAVs). Such a fund will be treated as an IREF where 25% or more of the market value of its assets is derived (directly or indirectly) from “IREF assets”, which broadly include Irish land and buildings / unquoted shares deriving their value from same, shares in Real Estate Investment Trusts (REITs), specified mortgages (as defined) and units in an IREF.

The new rules also apply to a fund where it would be reasonable to consider that the fund's main purpose (or one of its main purposes) was to acquire IREF assets or carry on an IREF business. Where the fund is an umbrella fund, the new rules will be applied at the sub-fund level. Where a fund is treated as an IREF, it is intended that withholding tax is to be applied to distributions and redemptions made out of certain IREF profits.

The IREF legislation excludes certain types of “good” investors from the new tax, such as certain Irish and EU pension funds/schemes, Irish and EU/EEA regulated funds, life assurance funds authorised and regulated by Ireland or another EU/EEA member state and Section 110 securitisation companies. That said careful analysis of the measures is required in the case of certain pension funds and life assurers holding an interest in an IREF through an intermediate fund vehicle as they could fall within the scope of the provisions.

Bank levy

The rate of the levy has been increased to 59% of the Deposit Interest Retention Tax (DIRT) paid in the base year – presumably because of the reduction in interest rates in recent years causing a reduction in the level of DIRT paid in 2015 (the new base year). The Act provides

that the base year for 2017 and 2018 will be 2015; for 2019 and 2020 will be 2017; and for 2021 will be 2019.

One would hope that if the amount of DIRT paid rises between now and 2021, the rate of the levy will be reduced so that banks are not collectively subject to a higher levy than the targeted €150 million per annum.

Savings Products

The Act provides that the rate of DIRT will be reduced by 2% each year for the next four years from a current rate of 41% to 33% in 2020.

Historically, the rate of DIRT has moved in lockstep with the exit tax applicable to life assurance policies and investment in fund products. However, the reduction in rate announced by the Minister will only apply to DIRT. Payments from life assurance policies and investment funds will remain taxed at the 41% rate which could create an unfair disadvantage.

VAT recovery for partially exempt businesses

The Act contains amendments to the provisions in relation to the apportionment of VAT on general overhead costs for partially VAT-exempt entities. The amendments provide that the proportion of recoverable VAT on general overhead costs should be calculated using a turnover method in the first instance. However, where the turnover method does not correctly reflect the use of the overhead costs, an alternative method of apportionment must be used.

This amendment effectively adds an additional requirement in the annual exercise which must be carried out by partially exempt businesses to determine the most appropriate VAT recovery method. In view of these changes, all partially VAT-exempt entities should consider the appropriateness of their VAT recovery rate methods.

Review of the corporation tax code and stamp duty on share transactions

The Minister for Finance has announced the appointment of an independent economic expert, Seamus Coffey, to undertake a review of the corporation tax code. The review will assess whether the Irish corporation tax code continues to meet international standards, whilst also delivering tax certainty for business and maintaining competitiveness.

The review will focus on achieving the highest international standards in tax transparency, ensuring no preferential treatment to any taxpayer, further implementing Ireland’s commitments under the OECD’s Base Erosion and Profit Shifting (BEPS) project, delivering tax certainty for business, maintaining the competitiveness of Ireland’s corporation tax offering, and maintaining the 12.5% rate of corporation tax.

Brian Daly Partner, KPMG

9

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

IFS Apprenticeship – An update

The IFS Apprenticeship initiative managed by Carol Kenna on behalf of FSI has achieved a number of key milestones to date. To ensure that IFS Apprenticeships meet the needs of industry, a Steering Group was established.

Initially, the group was comprised of FSI, education partners NCI and industry representatives from State

Street, Citi Bank and Deutsche Bank. As of October 2016, AIB, Bank of America Merrill Lynch, AON Ireland and Mediolanum Asset Management have joined the Steering Group to govern and guide the IFS Apprenticeships initiative.

The Steering Group identified three key areas that IFS Apprenticeships should focus on to meet current and future needs of industry;

Associate Level (entry level roles)

Specialist Level (team lead level in Fintech/Data Analytic roles).

Advanced Specialist roles (subject matter expert roles in Fintech/Data Analytics).

The group also benchmarked IFS Apprenticeship salaries in line with industry and felt that one day in college (NCI) and four days on the job was the best mix for both industry and the candidates.

Once a clear governance process was established, IFS Apprenticeships opened its doors in May 2016 for candidate applications. Since May candidates have gone through a number of pre-screening stages with State Street, AIB, BAML and KBC Bank. Following which a number of provisional offers of apprenticeship have been made due to commence in early 2017.

If you would like more information on how an IFS Apprenticeship can benefit your company, please contact Carol Kenna on 01 605 1631 or visit www.ifsapprenticeships.ie.

Carol Kenna Programme Manager FSI CareerStart

Recommendations arising from the review will be made to the Minister by the end of June 2017. The Department of Finance may, as required, facilitate a public consultation with citizens, civil society and stakeholders on any or all of the matters under review. In response to Brexit, the Department of Finance announced that there will be a review of the charge to stamp duty on sales and transfers of stocks, shares, and marketable securities of Irish incorporated companies. Under current legislation, the transfer of such property is subject to Irish stamp duty at a rate of 1%.

The review, which is to be carried out in 2017, is welcome, as Ireland’s rate of stamp duty on such transfers is higher than many other jurisdictions, including the UK which has general rate of 0.5%.

Other measures relevant to International Financial Services

The Act extends Foreign Earnings Deduction (FED) relief, aimed at assisting companies to expand into emerging markets, until the end of 2020 with some improvements to the relief. The Act confirms that Colombia and Pakistan will be added to the list of qualifying countries bringing the total number of qualifying countries to 30. In addition, the minimum number of days working abroad in order to qualify for the relief has been reduced from 40 to 30 days per annum. These amendments form part of the measures intended to encourage Irish businesses to seek out opportunities to grow their activities in international markets.

The Act extends the Special Assignee Relief Programme (SARP) for a further three years to the end of 2020. The relief, which is part of the Government’s strategy to attract inward investment to Ireland, aims to encourage the relocation to Ireland of key talent from within multinational groups by providing for a 30% reduction in an employee’s taxable remuneration in excess of €75,000.

The Act also confirms that, for disposals made on or after 1 January 2017 and to which entrepreneurs’ relief applies, the applicable rate of capital gains tax is reduced from 20% to 10%. The relief applies to disposals of the whole or part of a qualifying trade or business owned by a qualifying individual for at least three years before disposal.

As indicated by the Minister in his Budget speech, all other aspects of the relief remain unchanged, including the lifetime limit of €1 million of chargeable gains to which the relief can apply. While the reduction in the rate is a welcome improvement, it is disappointing that the lifetime limit has not been increased, as had been set out in the programme for government, particularly to ensure the relief is competitive with that currently available in the UK, where the total lifetime limit is £10 million. The Minister has signalled his intention to review the €1 million lifetime limit in future Budgets.

10

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

IFS Apprenticeships –From a Candidate Perspective

One of the reasons FSI introduced the IFS Apprenticeship Initiative was to give financial services firms access to a talented new pool of candidates. In May 2016, IFS Apprenticeships opened its doors for applications. Over 772 full applications were received, highlighting the

huge appetite of candidates looking for new and exciting career pathways that the IFS Apprenticeship initiative has to

offer them.

From the 772 full applications, 261 candidates were selected to be put forward to FSI member companies participating in the initiative - having first gone through a number of screening processes to ensure the best fit between industry and apprentice was found. These candidates ranged from a varied background such as: Computer Science, Finance, Public Relations, Marketing,

Human Resource, Software Development and Arts.

Our first cohort of IFS Apprenticeships, at Associate Level will commence in early 2017. These apprentices are very excited about not only gaining valuable hands on industry experience while earning a competitive salary but also the

Orla Reynolds IFS Project Officer

IFS Apprenticeships Event National College Of Ireland

opportunity to gain a third level qualification in Business and Finance, Fintech or Data Analytics.

If you would like more information on how an IFS Apprenticeship can benefit your organisation and how you can select an apprentice(s) from our highly skilled pool of candidates - who may turn out to be one of your organisations future leaders, contact Orla Reynolds on 01 605 1728 or visit our website www.ifsapprenticeships.ie.

Summit Finuas Network - A year

in review 

Summit Finuas Network was established in 2009 and since then has become a key provider of funding for International Financial

Services businesses, and companies that provide services to this industry, for the development and education of staff.

This year alone we have provided funding to over 90 companies, allowing over 750 students to learn and upskill. The courses we have offered range from Prince II project management courses to the Professional Certificate in Complex Financial Instruments in international financial services.

We work with our members to create new and in demand courses relevant to the changes taking place within the industry. Our ability to fund courses up to 40% allows more companies the freedom to explore more training options for their staff and to keep ahead of the curve. Our Government has a vision for how Ireland can compete at the top level in International Financial Services, the IFS 2020 strategy. Key to this being implemented successfully is the quality of the workforce we have to offer.

Becoming a member of Summit Finuas Network is free and simple; a link is available on our website. Once

Gillian O’Keefe Summit Finuas Network Executive

11

 

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

Skillnets Statement of Strategy 2016 – 2019 Up-skilling enterprise, driving competitiveness

Established in 1999, Skillnets supports and works with businesses in Ireland, and their

employees, to address their current and future skills needs. With its deep roots in enterprise Skillnets has been able to make a substantial and

enduring contribution to the national skills agenda. However, advances in technology, shifts in market focus, changing demographics and a competitive necessity for upskilling are combining to disrupt workplace learning. In this context a key challenge for the organisation is to remain focused on effectiveness and being a champion for innovation in enterprise learning and development. In order to achieve this Skillnets have released their Statement of Strategy 2016 – 2019. This sets out the strategic goals that will guide the organisation over the coming years. These are:

Goal 1:Make training effectiveness, impact and relevance core to Skillnets activities. Promote continuous improvement in the learning experiences provided to enterprise through networks and be a model for training excellence in an enterprise context.

Goal 2: Play a pivotal role in maintaining a supply of the specific skills and future skills that impact the growth potential of Irish enterprise.

Goal 3: Drive increased participation of employers in the Skillnets proposition. In doing so, Skillnets will be a

key enabler in sustaining national competitiveness through the up-skilling of those in employment

A critical challenge is to supply the quantity and quality of skills required for the 220,000 new jobs targeted by the Government over the next 5 years. As the economy grows, an increasing number of sectors and occupations are likely to experience skills shortages. Already several sectors including ICT, life sciences and international financial services are struggling to fill roles required to grow their businesses.

As and enterprise-led agency Skillnets is strategically positioned to fulfil many of these skill demands over the coming years. The Skillnets model has proven itself to be innovative, resilient and adaptable to the ever-changing needs of enterprise and with this new strategy are confident of making a positive contribution to the skills challenge facing many businesses and indeed sectors.

There are currently 60+ Skillnets operating across Ireland. The Summit Finuas Network is responsible for meeting the training and education needs of the international financial services sector. Further information can be found at www.summitfinuasnetwork.com or by calling Brian McMahon – Network Manager – 01 6051508

membership has been confirmed the option of all the courses is available for you to book. We also host a number of events throughout the year to help our members to network and create ties with others in the industry.

We are delighted to advise that we have our funding for 2017 confirmed and will be looking to enhance our course offering with feedback and input from the people that matter most, our members. If you would like more information, please contact Gillian O’Keefe on 01 605 1546.

Jobseekers excel in studies through FSI CareerPlus

FSI Careerplus graduation ceremony in conjunction with the Institute of Banking for the Graduate Diploma and the Masters in Financial Services took place in October in O’Reilly Hall, UCD. It was a very rewarding

experience for the FSI Careerplus students, many of whom it was their first time back in education after many years.

The last programme resulted in excellent academic outcomes. FSI Careerplus funded 47 Jobseekers of which 87% graduated with a Graduate Diploma in Financial Services and 90% of graduated with a Masters in Financial Services.

Year on year the calibre and commitment of the FSI CareerPlus students has excelled itself. Jobseekers have used this programme as a launch pad to build on industry knowledge and experience which resulted in roles within financial services firms.

The FSI CareerPlus programme for jobseekers is managed by Financial Services Ireland in partnership with the Institute of Banking and Ibec Management Academy. Funded through Higher Education Authority this programme has proven to be an educational success and a pathway to the prestigious internationally recognised Chartered Banker.

If you would like more information on the programme or participants, please contact Mary Quinn on 01 605 1568.

Mary Quinn Programme Administrator FSI CareerStart

Brian McMahon Summit Finuas Network Manager

Launch of Skillnet Strategy

12

 

FSI Executive Team

Financial Services Ireland Update

December 2016 Issue 4 www.fsi.ie

Marc Coleman Director

Audrey Crummy Senior Executive Regulation & EU Affairs

Aisling McNiffe Senior Executive Communications & Political Affairs

Brian McMahon Summit Finuas Network Manager

Louise Kelly Member Services Executive

Carol Kenna Programme Manager FSI CareerStart

Mary Quinn Programme Administrator FSI CareerStart

FSI Executive Board

Susan Dargan, Head of State Street Ireland (FSI Chair)

Joe Duffy, CEO, Bank of New York Mellon

Eddie Cullen, Head of Corporate and Institutional Banking, Ulster Bank

Sean Grace, Group Treasurer, Securitas

Barry O'Dwyer, CEO, Blackrock Asset Management

Rob Richardson, CEO, Pioneer Investments

Pat Gaynor, Managing Director, Corporate Banking, Bank of Ireland

Alastair Murray, CEO, Hawthorn Life Ltd

Furio Pietribiasi, Managing Director, Mediolanum Asset Management Ltd

Cecilia Ronan, Chief Administrative Officer, CitiBank Europe Plc

Brian Daly, Partner, Tax, KPMG

Working Group Chairs

Corporate Treasury

Sean Grace, Securitas

HR Forum

Ciaran O’Hare, Northern Trust

International Finance Forum & Steering Group

Padraig Rushe

International Life Insurance CEO Group

Alastair Murray, Hawthorn Life

International Life Insurance Technical Committee

John Finnegan, DARTA

FinTech Taskforce

Furio Pietribiasi, Mediolanum International Life

Financial Services Ireland

To contact any members of the team, call Ibec on 01-6051500, or email firstname.surname@ibec.ie

Gillian O’Keeffe Summit Finuas Network Executive

Orla Reynolds IFS Project Officer