Funds Quarterly Legal and Regulatory Update: 1 July 2026 - 30 September 2026

1            APPROACHING DEADLINES/DATES OF INTEREST

2            UCITS & AIFMD

2.1           Revised Central Bank UCITS Regulations, Performance Fee Guidance and Feedback Statement to CP 161 published

On 10 July 2026, the Central Bank of Ireland (Central Bank) published the following documents relating to its domestic UCITS framework:

• Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1) (Undertakings for Collective Investment in Transferable Securities) Regulations 2026 (Revised CBI UCITS Regulations)

• Revised Central Bank Guidance on Performance Fees of UCITS and certain types of Retail Investor AIFs (Revised UCITS & RIAIF Performance Fee Guidance)

• Central Bank Feedback Statement to Consultation Paper 161 (Feedback Statement).

Changes made to the existing CBI UCITS Regulations include:

• changes required to align the domestic framework with the revised European rules introduced under Directive (EU) 2024/927 as well as the introduction of a new "charge on redemptions" and a new "exchange of assets" framework;

• an obligation to disclose the maximum fee payable for any recurring fees which are calculated based on NAV of the UCITS in its prospectus; and 

• an extension of the existing related party rules to include any transactions entered into between the UCITS and any shareholder.

The revised UCITS and RIAIF performance fee framework now facilitates:

• the ability to use a fulcrum fee methodology subject to certain conditions being met;

• crystallisation of the performance fee more frequently than annually for the High-Water Mark, High-On-High and fulcrum fee models subject to certain conditions being met; and

• the ability for the performance reference period to be set to less than the life of the relevant fund for certain performance fee models.

A copy of the Revised CBI UCITS Regulations is available here.

A copy of the Revised UCITS & RIAIF Performance Fee Guidance is available here.

A copy of the Feedback Statement is available here.

A copy of a Dillon Eustace briefing providing a detailed overview of these developments is available here.

2.2          Central Bank of Ireland publishes revised edition of AIF Rulebook

On 30 July 2026, the Central Bank published a revised edition of its AIF Rulebook which replaces the version published on 5 May 2026.

The revised AIF Rulebook incorporates targeted changes relating to the obligations imposed on QIAIFs which have appointed non-EU AIFMs and/or registered AIFMs.

The revised text confirms that non-EU AIFMs and registered AIFMs appointed in respect of QIAIFs which engage in loan origination on an ancillary basis (and which do not constitute a "loan originating AIF" under the framework) must comply with applicable loan origination rules set down in the European Union (Alternative Investment Fund Managers) Regulations 2013 as amended.

A copy of the revised AIF Rulebook is available here.

2.3          ESMA announces launch of CSA on risk management function of UCITS management companies and AIFMs

On 3 July 2026, ESMA announced the launch of a common supervisory action (CSA) on the risk management function of UCITS management companies and AIFMS across the EU. 

The objective of the CSA, which will be conducted throughout 2026 and 2027, is to assess how fund management companies comply with key risk-related provisions under the UCITS and AIFMD frameworks with a focus on the effectiveness, independence and expertise of the risk management function.

In conducting the CSA, EU national competent authorities will focus on the following three areas:

• governance and organisation of the risk management function

• identification, measurement and monitoring of risks; and

• reporting to senior management and governing bodies.

A copy of the ESMA press release is available here.

2.4          Department of Enterprise, Tourism and Employment launches public consultation reform of the Limited Partnerships Act 1907

On 7 July 2026, the Department of Enterprise, Tourism and Employment (DETE) published a consultation (Consultation) on the reform of the Limited Partnerships Act 1907 (1907 Act).

In the Consultation, DETE seeks feedback on three specific policy proposals under consideration for inclusion in the bill which will amend the 1907 Act.

These relate to (i) the maximum number of partners permitted in an Irish limited partnership, (ii) the introduction of a whitelist of permitted activities that can be carried out by a limited partner and (iii) the potential introduction of a controlled mechanism for access to capital during the life of the partnership without the loss of limited liability.

The Consultation closed on 14 August 2026.

Further information on the Consultation is available here.

3            CENTRAL BANK OF IRELAND

3.1          Central Bank of Ireland publishes feedback report on review of delegation in the Irish funds sector

In July 2026, the Central Bank of Ireland (Central Bank) published its feedback report on its review of delegation in the Irish funds sector (Feedback Report).

In the Feedback Report, the Central Bank outlines its findings from a review of delegation practices carried out by it in 2025 within the Irish funds sector.

The Central Bank notes that in general Irish fund management companies operating a delegation model have in place good governance frameworks, controls, oversight processes and data capabilities. It also noted that certain fund management companies reviewed needed to enhance their governance arrangements and operating models.

The Feedback Report outlines supervisory expectations across (i) governance, (ii) portfolio management, (iii) risk management, (iv) delegate oversight and (v) data capabilities.

Irish fund management companies are required to conduct an analysis of the supervisory expectations and observations set out in the Feedback Report and put in place a time-bound plan by the end of 2026 to address any gaps identified in their day-to-day operational, resourcing and governance arrangements in respect of delegation.  

A copy of the Feedback Report is available here.

A detailed analysis of the Feedback Report by Dillon Eustace is available here.

3.2          Central Bank of Ireland publishes feedback report on CSA on compliance and internal audit functions in the Irish investment funds sector

On 29 July 2026, the Central Bank published a feedback report on the common supervisory action (CSA) on compliance and internal audit functions in the Irish investment funds sector (Feedback Report).

In it the Central Bank provides an overview of the ESMA-led review carried out by it in 2025 on compliance and internal audit functions in Irish fund management companies.

It notes that while many in-scope Irish fund management companies have established mature compliance and internal audit functions, areas that require review and consideration include:

• A consistent application of documented Compliance policy/procedures;

• Strengthening approach to Compliance resourcing and training;

• Compliance monitoring and testing practices;

• Enhancing Board engagement and reporting; and

• Strengthening oversight of delegated and group-level Compliance and Internal Audit arrangements.  

A copy of the Feedback Report is available here.

A copy of the ESMA related report on the CSA is available here.

 
3.3          Central Bank of Ireland confirms supervisory reviews on closet indexing and value for money

In August 2026, the Central Bank announced that it would shortly launch two ESMA-driven supervisory reviews focused on closet indexing and value for money.

These initiatives aim to drive supervisory convergence and support the Central Bank’s Regulatory & Supervisory Outlook’s Area Five priority of enhancing oversight of product costs and disclosures.

The reviews will evaluate fund management companies’ governance frameworks, policies and procedures and will be re-occurring on an annual basis. They will be conducted using ESMA-developed methodologies to ensure consistent supervision across EU Member States.

3.4          Central Bank of Ireland publishes supplemental guidance on prohibition notices under its Fitness & Probity regime

On 30 July 2026, the Central Bank published its supplemental guidance on prohibition notices under its Fitness & Probity regime (Supplemental Guidance) and a related feedback statement on its Consultation Paper 166 (Feedback Statement).

The Supplemental Guidance sets out the circumstances that a decision maker will consider when determining the nature, scope and duration of a prohibition under which the relevant person is forbidden from performing a controlled function in an Irish regulated financial firm in order to protect users of financial services and the financial system itself.

The Supplemental Guidance supplements the Central Bank’s main guidance on Fitness & Probity Investigations, Suspensions and Prohibitions (Main Guidance).

A copy of the Main Guidance is available here.

A copy of the Supplemental Guidance is available here.

A copy of the Feedback Statement is available here.

3.5          Central Bank of Ireland publishes Thematic Assessment on Implementation of Key Aspects of the Fitness and Probity Regime in the MiFID sector

In September 2026, the Central Bank published a thematic assessment on the implementation of key aspects of its fitness and probity (F&P) regime by Irish MiFID firms (Assessment).

This included an assessment of the steps taken by Irish MiFID firms to embed its individual accountability framework (IAF) into their governance framework.

While Irish fund management companies were not within the scope of the thematic assessment carried out by the Central Bank, there are some useful takeaways for all regulated firms on its expectations on compliance with its F&P and IAF regimes. These include:

F&P Regime

• While some firms have detailed F&P policies in place, they do not effectively apply the requirements in practice

• Appropriate due diligence must be carried out on all controlled functions (CF) (including pre-approved controlled functions (PCF)) role-holders both prior to appointment and as part of the annual F&P certification process to ensure that they remain suitable for their PCF/CF role.

This includes:

• obtaining a signed copy of the CF role-holder’s agreement to comply with the F&P standards;

• ensuring that each CF provides a self-certification of potential conflicts of interest; and

• ensuring that documentary evidence of the assessment by the firm of the individuals’ competence and capability (such as copies of interview notes) is maintained.

IAF framework

• The Central Bank emphasised the importance of ensuring that policies and procedures put in place to implement the IAF framework into governance structures include specific details on how the relevant firm has tailored their approach to the IAF taking into account its specific business model/ the actions the firm has taken to embed the new framework.

• The Central Bank also re-stated its expectation that training be provided to relevant staff.

A copy of the Assessment is available here.

3.6          Central Bank of Ireland publishes Consultation Paper on Industry Funding Levy Proposals

On 25 September 2026, the Central Bank published Consultation Paper 172 on Industry Funding Levy Proposals (CP 172).

In CP 172, the Central Bank outlines its proposals to change the methodologies for certain industry categories. These changes concern how the levy is distributed across firms in an industry category rather than relating to how much is collected from the relevant category. The Central Bank is proposing applying those changes to investment fund service providers, investment firms and insurance undertakings amongst others.

The deadline for responding to CP 172 is 8 January 2027.

A copy of CP 172 is available here.

3.7          Central Bank of Ireland Commissions Independent Review of its Enforcement Activities

On 22 July 2026, the Central Bank announced that it has appointed an external reviewer to carry out an independent review of the effectiveness and efficiency of its enforcement activities. 

The review, which will be led by Josephine Feehily, will consider the performance of the Central Bank’s enforcement activities and the role of enforcement within in the wider supervisory framework.  The process will involve engaging with senior management and staff across the Central Bank as well as with external stakeholders as necessary.

A copy of the related press release is available here.

4            SUSTAINABLE FINANCE

4.1          SFDR 2.0 Negotiations

On 10 September 2026, the European Parliament’s Economic and Monetary Affairs Committee (ECON) voted on its negotiating position on the proposals to overhaul the SFDR framework originally published by the European Commission in November 2025 (Parliament Negotiating Position). This follows the adoption by the Council of the EU of its negotiating position on 24 June 2026 (Council Negotiating Position), thus paving the way for trilogue negotiations to begin in October 2026.

Both institutions have proposed that AIFs marketed solely to professional investors should be able to opt out of the revised SFDR framework.

Key divergences between the Parliament Negotiating Position and the Council Negotiating Position include:

• The exclusion criteria to be applied by Transition products;

• ECON’s proposal to introduce mandatory disclosure of engagement strategies adopted by the relevant fund across all three categories of funds;

• ECON’s proposal to require mandatory PAI reporting across all three categories, including an obligation for ESG Basics products to report against exposure to companies active in the fossil fuel sectors. This differs from the Council’s Negotiating Position which (i) does not impose any PAI reporting obligations on ESG Basics products and (ii) permits other categorised products to select relevant PAI from a list of indicators set down in delegated acts.

A copy of the Parliament Negotiating Position is available here.

A copy of the Council Negotiating Position is available here.

A copy of a Dillon Eustace briefing on the topic is available here.

4.2          European Union (Empowering Consumers for the Green Transition) Regulations 2026

On 27 September 2026, the European Union (Empowering Consumers for the Green Transition) Regulations 2026 (Irish Regulations) entered into force.

The Irish Regulations, which transpose the EMPCO Directive[2] into Irish law, amend the existing Irish Consumer Protection Act 2007 and the Consumer Rights Act 2022. EMPCO is a cross-sectoral EU framework regulating environmental claims made to consumers.

Under the Consumer Protection Act 2007 as revised by the Irish Regulations, a number of prohibited and misleading commercial practices relating to environmental claims provided to consumers have been introduced.

Fund offering documents, website disclosures and marketing communications provided to consumers should not contain any misleading or prohibited claims.

These include without limitation the following:

• Displaying a sustainability label that is not based on a certification scheme or not established by a public body.

• Making a “generic environmental claim” for which the fund management company is not able to demonstrate recognised excellent environmental performance relevant to the claim.

• Making an environmental claim about the entire product where the claim only concerns a certain aspect of the product.

• Claims made, based on the offsetting of greenhouse gas emissions, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions.

• Environmental claims about future environmental performance unless there are clear, objective, publicly available and verifiable commitments set out in a detailed realistic implementation plan that includes measurable and time-bound targets and that is regularly verified by an independent third-party expert whose findings are made available to consumers.

• Claims which include false information relating to the fund’s environmental or social characteristics.

• Claims which present requirements imposed under EU law on all products as a distinctive feature of the fund’s offer.

A copy of the Irish Regulations is available here.

A copy of the EMPCO Directive is available here.

4.3          European Commission adopts revised ESRS Delegated Acts

On 3 July 2026, the European Commission adopted revised European sustainability reporting standards (ESRS) as well as a voluntary reporting standard for smaller companies. These were subsequently published in the Official Journal of the EU on 21 September 2026.

The revised ESRS are designed to reduce administrative burdens for EU businesses by shortening and clarifying the standards, introducing new flexibilities and streamlining key processes.

The voluntary reporting standard adopted by the European Commission is intended to provide a single, proportionate reference framework for sustainability reporting by smaller companies which do not fall within the scope of CSDR to make it easier for such companies to respond to specific requests for sustainability information from large financial institutions and companies.

The revised ESRS shall apply to financial years beginning on or after 1 January 2027.

A copy of the revised ESRS is available here.

A copy of the voluntary reporting standard is available here.

4.4          ESMA publishes a consultation on EU Taxonomy Disclosures Delegated Act

On 1 July 2026, ESMA published a consultation on technical advices to the European Commission on selected key performance indicators under the existing EU Taxonomy disclosures framework applicable to undertakings falling within the scope of Article 8 of the EU Taxonomy Regulation (Consultation).

The objective of the review is to simplify the existing reporting framework and reduce reporting burdens for in-scope market participants.

In the Consultation, ESMA proposes several simplifications to the Taxonomy disclosures framework for non-financial undertakings and asset managers, including in particular the operational expenditure key performance indicator. The other European Supervisory Authorities (namely the EBA and EIOPA) also issued consultations on targeted provisions of the existing framework on the same date.

The consultation closed on 12 August 2026 and ESMA is expected to deliver its final technical advice by end of October 2026.

A copy of the Consultation is available here.

4.5          EFRAG launches public consultation on the ESRS-40a Exposure Draft for Certain Non-EU Undertakings

On 23 July 2026, EFRAG launched a public consultation on the exposure draft of the ESRS for certain non-EU undertakings (Consultation).

The draft standard being consulted on applies to certain third-country undertakings with significant activities in the European Union that meet the reporting thresholds set out in Article 40a of the EU Accounting Directive and supports the implementation of the EU Corporate Sustainability Reporting Directive. In-scope undertakings will be required to report in accordance with the finalised technical advices for all financial years starting on or after 1 January 2028.

EFRAG is expected to deliver its draft technical advice to the European Commission in January 2027 after which the European Commission will subsequently launch its own public consultation before adopting the delegated act.

A link to the Consultation is available here.

5            AML & CTF

5.1          European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2026

On 7 August 2026, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2026 (Regulations) were published, amending the access regime for the Central Register of Beneficial Ownership of Corporate Entities.

The Regulations can be accessed here.

A Dillon Eustace briefing entitled “AMLD6 and Beneficial Ownership Central Registers: New Access Rules in Ireland” can be accessed here.

5.2          AMLA draft ITS on formats for reporting suspicions

On 2 July 2026, the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published a consultation paper on draft implementing technical standards (ITS) specifying the format to be used for reporting suspicions and providing transaction records under Article 69(3) of the AML Regulation[3].

Key points include:

• The draft ITS establish uniform formats for reporting suspicions of money laundering and terrorist financing and for providing transaction records to financial intelligence units (FIUs).

• The proposals seek to address differences in reporting practices across Member States, which can create challenges for FIUs and obliged entities operating on a cross-border basis.

• The draft ITS are designed to promote a high degree of convergence across the EU while accommodating sector-specific differences.

• Separate annexes to the draft ITS set out the data points that may be submitted to FIUs, with reporting entities required to provide only the relevant subset based on the nature of the activity and suspicion reported.

• AMLA proposes a two-phase implementation process for the reporting of suspicions, recognising differences in existing FIU practices across Member States.

The consultation closed on 20 September 2026. AMLA is required to submit the final draft ITS to the European Commission by 30 November 2026.

The Consultation Paper can be accessed here.

5.3          Criminal Justice (Terrorist Offences) (Amendment) Act 2025

The Criminal Justice (Terrorist Offences) (Amendment) Act 2025 (Act) was enacted on July 7, 2026.

It amends the Criminal Justice (Terrorist Offences) Act 2005 to fully implement EU Directive 2017/541 on combating terrorism. This will allow for the prosecution of a broader range of terrorist activities, including terrorist acts with a cross-border element, and cyber-attacks where the aim is to cause widespread harm.

The Act can be accessed here.

5.4          AMLA Final Report on Draft RTS on pecuniary sanctions, administrative measures and periodic penalty payments

On 8 July 2026, AMLA published its Final Report on draft regulatory standards (RTS) on pecuniary sanctions, administrative measures and periodic penalty payments pursuant to Article 53(10) of MLD6[4]. AMLA consulted on an earlier version of the draft RTS between 9 February 2026 and 9 March 2026, and feedback received has been reflected in the draft where appropriate.

Key points include:

• The draft RTS establish indicators for assessing the gravity of breaches, criteria for determining the level of pecuniary sanctions and administrative measures, and a methodology for imposing periodic penalty payments.

• Supervisors will follow a three-step approach:(a) assess the gravity of a breach using a common set of indicators, including factors such as duration, repetition and impact; (b) classify the breach into one of four categories of severity; and (c) determine the appropriate pecuniary sanction or administrative measure using specified criteria.

• Supervisors will apply supervisory judgement when assessing whether, and to what extent, the relevant indicators and criteria are met.

• The draft RTS also contain specific provisions relating to natural persons, including senior management and members of management bodies in their supervisory function.

• Additional provisions address procedural aspects of periodic penalty payments, including the right to be heard, limitation periods and minimum requirements for decisions imposing such penalties.

The draft RTS will be submitted to the European Commission for adoption before the publication in the Official Journal of the European Union.

The draft RTS can be accessed here.

5.5           EDPB and AMLA to develop Joint Guidelines on partnerships for information sharing

On 1 July 2026, the European Data Protection Board (EDPB) and AMLA announced that they will jointly develop guidelines on information sharing partnerships for anti-money laundering and counter-terrorist financing (AML/CTF) purposes.

The Joint Guidelines will provide practical guidance on how information can be shared to combat money laundering and terrorist financing while ensuring compliance with data protection requirements. The Guidelines will help companies, supervisors, financial intelligence units (FIUs) and data protection authorities understand how partnerships can be established in a way that supports both effective information sharing and the protection of personal data.

The EDPB and AMLA will hold a stakeholder engagement event later in 2026 and intend to launch a public consultation on the draft Guidelines during the first half of 2027.

A copy of the AMLA press release is available here.

5.6          AMLA Final Report on ITS on direct supervision framework under the AML Regulation

On 21 July 2026, AMLA published its Final Report on draft implementing technical standards (ITS) concerning co-operation within the EU AML/CTF supervisory system for the purposes of AMLA's direct supervision under the AML Regulation.

The draft ITS establish a framework for co-operation between AMLA and national supervisors in advance of AMLA assuming direct supervision of certain high-risk cross-border financial institutions from 2028. The ITS set out the process for identifying and selecting institutions for direct supervision, as well as arrangements to ensure continuity and consistency when supervisory responsibility transfers between national authorities and AMLA.

In summary, the ITS are intended to support a coordinated and proportionate approach to AML/CTF supervision across the EU and facilitate the implementation of AMLA's direct supervisory mandate.

The draft ITS will be submitted to the European Commission for adoption. Once adopted, they will apply to the data collection and selection process leading up to AMLA's direct supervision commencing in 2028.

The Final Report can be accessed here.

5.7          Frequently asked questions on the reporting package for identifying provisionally eligible entities

On 21 July 2026, AMLA published a frequently asked questions (FAQ) document addressing common questions relating to the reporting package on the identification of provisionally eligible obliged entities for direct AMLA supervision.

The FAQ is intended to support reporting obliged entities during data collection exercises conducted at national level. It brings together questions received from national financial supervisors and provides clarification on key areas of interpretation, operational issues and practical implementation matters.

In summary, the FAQ provides practical guidance to support firms and supervisors in the implementation of AMLA's reporting requirements for the identification of entities that may fall within its direct supervisory remit.

The FAQ can be accessed here.

5.8          National Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing Strategy 2026

On 12 August 2026, the Anti-Money Laundering Steering Committee (AMLSC), chaired by the Department of Finance, published Ireland's National Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) Strategy 2026–2030 (Strategy).

The Strategy sets out the Government's approach across five Strategic Goals — national coordination, risk assessment and understanding, regulatory framework, capacity building and outreach, and international cooperation — supported by a Priority Action Plan of 30 actions, with delivery to be driven across relevant departments and agencies over the 2026–2030 period.

The Strategy can be accessed here.

6            EMIR & SFTR

6.1          European Commission adopts Delegated Regulation amending RTS on clearing thresholds

On 14 July 2026, the European Commission adopted a Delegated Regulation amending Delegated Regulation (EU) No 149/2013 as regards the clearing thresholds and the mechanisms triggering their review (Delegated Regulation). 

The Delegated Regulation establishes:

• new clearing thresholds for aggregate positions for financial counterparties under Article 11;

• new clearing thresholds for uncleared positions under Article 11a; and

• a new review mechanism under Article 11b requiring ESMA to monitor specified market indicators and initiate a review of the thresholds where significant changes are identified.

The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation and, if neither objects, it will enter into force on the 20th day following its publication in the Official Journal of the European Union.

The Delegated Regulation can be accessed here.

A Dillon Eustace briefing entitled “EMIR 3.0: Changes to the Clearing Threshold Regime” explaining the changes can be accessed here.

6.2          EBA, EIOPA and ESMA propose amendments to bilateral margin requirements

On 31 July 2026, the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published a Final Report on draft RTS that would ease the bilateral margin regime in Commission Delegated Regulation (EU) 2016/2251.

The proposals target counterparties that are in scope of initial margin requirements but sit below the €8 billion threshold set under EMIR, smoothing the phase-out of initial margin for that cohort and aligning the EU treatment more closely with other jurisdictions.

At present, a below-threshold counterparty need not post initial margin on new uncleared over-the-counter (OTC) derivatives but remains obliged to do so for contracts already on its books. The draft RTS would remove that residual obligation, so that such counterparties exchange no initial margin on either new or legacy contracts. The ESAs describe the change as a response to market participant requests and as part of their wider simplification and burden-reduction agenda.

The ESAs have submitted the draft RTS to the European Commission for endorsement. Once the Commission has completed its adoption process, the RTS will pass to the European Parliament and the Council of the EU for scrutiny before publication in the Official Journal of the European Union.

The Final Report can be accessed here.

6.3          ESMA Consults on Draft RTS and ITS on Reporting Framework for Clearing Activity under EMIR 3.0

On 18 August 2026, ESMA published a consultation paper on draft RTS and ITS relating to annual reporting requirements for clearing activity under EMIR 3.0 (Consultation Paper).

The proposals set out the content and format of annual reports to be submitted by clearing members and clients on their activity at recognised third-country central counterparties (TC-CCPs). The reporting framework is intended to provide supervisors with a consistent overview of the scale, characteristics and risk profile of EU firms' exposures to TC-CCPs.

The consultation closes on 12 October 2026. ESMA expects to publish a final report in Quarter 4 2026.

The Consultation Paper can be accessed here.

6.4          ESAs Final Report on Amending RTS on Initial Margin Requirements under EMIR

On 31 July 2026, the ESAs published a final report on draft RTS amending the initial margin requirements for certain uncleared OTC derivatives under EMIR (Final Report).

The draft RTS propose extending the existing derogation from initial margin requirements to existing OTC derivative contracts where one counterparty falls below the EUR 8 billion threshold for non-centrally cleared OTC derivatives. The amendments are intended to simplify the treatment of counterparties falling below the threshold and align the EU framework with approaches adopted in other jurisdictions.

The draft RTS have been submitted to the European Commission for endorsement and will subsequently be subject to scrutiny by the European Parliament and the Council.

The Final Report can be accessed here.

7            DORA

7.1          DORA Incident Reporting – Operational Instructions

On 16 September 2026, the ESAs published operational instructions to support competent authorities in their supervisory engagement with financial entities on the reporting of major information and communication technology (ICT)-related incidents under the DORA[5], with the aim of enhancing data quality and consistency across jurisdictions.

The instructions clarify recurring practical points in completing the reporting templates - including use of the English-language templates, monetary and free-text fields, consistent incident identification, and classification criteria.

The operational instructions can be accessed here.

8            OUTSOURCING

8.1          EBA Final Report and Guidelines on management of third-party risk related to non-ICT services

On 18 September 2026, the European Banking Authority (EBA) published its Final Report setting out Guidelines on the sound management of third-party risk relating to non-information and communication technology (ICT) services.

The Guidelines update the EBA's 2019 guidelines on outsourcing in line with DORA and will replace the 2019 guidelines when they apply. They address third-party arrangements (TPAs) provided by third-party service providers (TPSPs) and their subcontractors, focusing on the provision of critical or important functions.

The Guidelines:

• specify the steps to be taken by firms across the life cycle of TPAs to ensure consistency with DORA;

• provide specific criteria for the application of the proportionality principle; and

• ensure consistency with the DORA register by allowing firms to store consistent information for both ICT and non-ICT services, including the possibility of using a single register.

The application date of the Guidelines has not yet been finalised in the text. However, the final Guidelines will carry a two-year transition period to allow in-scope firms to review and amend their existing TPAs and update the register for non-ICT TPAs.

While Irish fund management companies do not fall within the scope of the final Guidelines, we expect that the Central Bank will likely update its cross-sectoral guidance on outsourcing (which is applicable to Irish fund management companies) to align with the final Guidelines in due course.

The Final Report can be accessed here.

9            MISCELLANEOUS

9.1          ESMA publishes statement on T+1 Settlement Preparations

On 20 July 2026, ESMA published a statement on T+1 preparations (Statement) in which it outlines key deadlines and action points for EU market participants impacted by the transition to T+1 settlement on 11 October 2027.

It calls on market participants to consider the new T+1 settlement requirements and to accelerate the technical work needed to prepare for this transition.

The Statement notes that market participants must be fully compliant by the following deadlines:

• First deadline: 7 December 2026: Compliance with requirements to improve the first post-trade step, the exchange of allocations and confirmations, in terms of timing and through the default use of international communication standards.

• Final deadline: 11 October 2027: Compliance with the requirements to optimise the settlement layer, including sending instructions early enough to securities settlement systems, and the generalisation of certain functionalities in CSDs, such as auto-partial settlement, hold & release, and auto-collateralisation.

A copy of the Statement is available here. 

9.2          Irish Department of Finance publishes Ireland for Finance Strategy Vision 2030

On 25 August 2026, the Irish Department of Finance published the Ireland for Finance Strategy Vision 2030-Renewed and Refocussed for a Digital Age (Strategy).

The Strategy sets out the Irish Government’s vision to be at the forefront of innovation in financial services globally. It is intended to build on previous strategies in the international financial services sector until the end of this decade to ensure that its policy framework remains robust, proportionate, adaptable and fit for purpose.

 The Strategy has outlined a number of ambitions with actions to support those ambitions.  

These include the timely, transparent and coherent transposition of EU financial services legislation. It also outlines measures intended to support the growth in private assets, including the modernisation of the 1907 Limited Partnership Act.

In the context of digital assets and fund tokenisation the following actions have been outlined:

• Simplification and modernisation of financial services legislation, including a commitment to modernise existing legislation to enable tokenisation;

• Thematic focus on high-impact area including digital assets and tokenisation, supported by the establishment of a Digital Assets Industry Group; and

• The continued support by the Central Bank of its Innovation Hub as the as the gateway for innovators to engage with it the launch of a further iteration of its Innovation Sandbox.

A copy of the Strategy is available here.

9.3          Irish Government publishes “Taxation of Retail Investment: A New Path Forward for Ireland”

On 31 August 2026, the Irish Government published a paper titled “Taxation of Retail Investment: A New Path Forward for Ireland” (Report).

The Report sets out a pathway for work to simplify and adapt the Irish tax framework to further support retail investment in Ireland.

It outlines the key features of an investment account which will be introduced and which aligns with the European Commission’s recommendation on Savings and Investment Accounts. 

Eligible investments which can be held in such investment accounts will include listed shares, listed bonds and a range of investment funds suitable for retail investors, including ETFs.  Eligible providers of such accounts include MiFID-authorised service providers, regulated fund managers, insurers or firms regulated under the Insurance Distribution Regulations.

Tax will be applied to the value of the investments held within the account on an annual basis if the tax-free threshold is exceeded. No minimum required annual contribution will be applied to such accounts and no minimum holding period or lock in period can be applied in respect of such investment accounts.

The legislative framework for the introduction of the new investment account will be introduced in the Finance (No 2) Bill 2026 with investment accounts becoming available during 2027.

The Report also identifies the areas that will be reviewed relating to the Irish taxation of investment funds and life assurance products, including the rate of taxation, the deemed disposal rule and the introduction of administrative simplification.

A copy of the Report is available here.

9.4          European Commission mandates ESMA to prepare regulatory technical standards under the EU Retail Investment Strategy

On 26 August 2026, ESMA published a letter received from the European Commission requesting it to prepare technical advices on the implementation of the changes to the UCITS, AIFMD and MiFID II frameworks being introduced under the EU Retail Investment Strategy (Letter).

In the context of the UCITS and AIFMD frameworks, this includes preparing technical advices in the areas of undue costs assessments which will need to be carried out by all UCITS management companies and AIFMs and the Value for Money assessments which will need to be conducted in respect of any UCITS or AIF made available to EU retail investors.

The European Commission has requested that ESMA deliver its technical advices by 1 October 2027.

A copy of the Letter is available here.

A copy of the Dillon Eustace briefing providing a detailed overview of the implications of the EU Retail Investment Strategy for fund managers is available here.

9.5          ESMA publishes Final Report on Call for Evidence on Simplification of Financial Transaction Reporting

On 2 July 2026, ESMA published a final report on its Call for Evidence on the simplification of financial transaction reporting (Report).

In it, ESMA provides a set of recommendations to support the simplification and integration of transaction reporting and to eliminate duplicative fragmented reporting processes across multiple EU legislative regimes, including EMIR, SFTR and MiFIR.

The Report includes both short-term intermediate measures as well as a longer-term target scenario based on the “report once” principle under which a single transaction reporting framework will be established.

ESMA will now support discussions with EU institutions and stakeholders on the proposed policy recommendations with efforts in the near term focusing on implementing intermediate simplification measures.

A copy of the Report is available here.

9.6          ESMA publishes Work Programme for 2027

On 28 September 2026, ESMA published its annual work programme for 2027 (Work Programme).

In it, ESMA outlines planned work for 2027 which is structured around three strategic priorities and two thematic drivers of its multi-annual strategy for 2023-2028.

Work streams and deliverables for 2027 which are of relevance to fund managers include (i) the integrated funds reporting framework, (ii) the EU Retail Investment Strategy, (iii) SFDR 2.0, (iv) the PRIIPS framework, (v) transaction reporting and (vi) risk monitoring.

ESMA notes that the work programme will be adapted as necessary depending on the progress and outcome of the EU Market Integration and Supervision Package.

A copy of the Work Programme is available here.

A copy of the Dillon Eustace briefing outlining key deliverables of the Work Programme of relevance to fund managers is available here.

9.7          ESMA publishes Report on Trends, Risks and Vulnerabilities

On 10 September 2026, ESMA published its second “Trends, Risks and Vulnerabilities” which covers the period from 31 December 2025 to 30 June 2026 (Report).

The Report sets out its view on the main risks and vulnerabilities in EU financial markets. It also addresses market developments across key segments of the EU financial markets during the period, including the investment funds sector. The Report also contains statistics relating to EU fund flows, valuation, credit risk and liquidity risk of EU bond funds and use of financial leverage amongst others.

A copy of the Report is available here.

9.8      AI Act Round Up

(i)            Digital Omnibus on AI Regulation enters into force

On 24 July 2026, Regulation (EU) 2026/1744 was published in the Official Journal of the EU and entered into force on 27 July 2026 (Amending Regulation).

The Amending Regulation makes targeted changes to the EU AI Act[6], including the following:

• Postponement of the deadline for complying with certain high-risk AI obligations with rules for stand-alone high-risk systems now applying from 2 December 2027 and those embedded in products applying from 2 August 2028.

• Transparency requirements relating for AI generated content (known as watermarking obligations) imposed under Article 50(2) of the EU AI Act are delayed until 2 December 2026.

• Clarification of the competences of the EU AI Act for the supervision of AI systems based on general-purpose AI models

A copy of the Amending Regulation is available here.

(ii)           Regulation of Artificial Intelligence Act 2026 enters into law

On 21 July 2026, the Regulation of Artificial Intelligence Act 2026 was enacted (Act).

The Act:

• Establishes the AI Office of Ireland as an independent statutory entity which acts as Ireland’s central coordinating authority for the implementation of the EU AI Act as amended; and

• Provides market surveillance authorities (including the Central Bank) with enforcement powers and empowers them to receive complains and impose and enforce administrative sanctions

A copy of the Act is available here.

Further information on the AI Office of Ireland is available here.

(iii)         European Commission publishes guidelines on transparency obligations for providers and deployers of certain AI systems

On 20 July 2026, the European Commission published guidelines to assist providers and deployers of AI systems to comply with the transparency obligations imposed on them under the EU AI Act which apply from 2 August 2026 (Guidelines).

The Guidelines clarify which providers and deployers must comply with the transparency obligations for interactive AI systems and the marking and labelling of AI-generated content.

They also explain certain concepts, give exemptions and examples. These include what constitutes directly interactive AI systems, such as chatbots, synthetic content, including partially or fully AI-generated text, deepfakes, and AI-generated text on matters of public interest, as well as examples for relevant exceptions such as standard editing, e.g. spelling and grammar correction.

A copy of the Guidelines is available here.

(iv)         European Commission publishes Action Plan on Cybersecurity and Artificial Intelligence

On 7 July 2026, the European Commission published its Action Plan on Cybersecurity and Artificial Intelligence to reinforce the EU’s cybersecurity and resilience (Action Plan). Its objective is to support the safe and responsible use of AI while strengthening the EU’s cybersecurity to address the immediate issues brought by AI in cybersecurity.

Further information on the Action Plan is available here.

(v)           ESAs publish statement on ICT risks from frontier AI models

On 31 July 2026, the ESAs published a statement on management of ICT risks from frontier AI models (Statement).

In the Statement, the ESAs encourage financial entities to adjust ICT risk management processes, procedures and controls according to three risk mitigation strategies, namely (i) prevention, (ii) detection and (iii) management.

The annex to the Statement provides examples of risk mitigation strategies and potential actions to manage such ICT risk.

A copy of the Statement is available here.

Footnotes:
[1] Commission Delegated Regulation (EU) 2026/466 and Commission Delegated Regulation (EU) 2026/465
[2] Directive (EU) 2024/825
[3] Regulation (EU) 2024/1624
[4] Directive (EU) 2024/1640
[5] Regulation on digital operational resilience for the financial sector (EU) 2022/2554
[6] Regulation (EU) 2024/1689