Asset Management & Investment Funds: Irish Practice Developments – January 2023

PRIIPs

The CBI clarified the position for UCITS publishing PRIIPS KIDs in the 37th Edition of its UCITS Q&A with new Q&As 1107, 1108 and 1109.

  • An existing UCITS which produces a PRIIPs KID was not required to submit the PRIIPs KID to the CBI on 1 January 2023. The first reporting/submission of these PRIIPs KIDs to the CBI is expected to be required in 2024. Periodic updates to such PRIIPs KIDs will only be required to be filed with the CBI after the first reporting exercise. Once finalised, the CBI will publish further details of reporting requirements for PRIIPs KIDs.
  • As regards the authorisation of a new UCITS or approval of a new sub-fund: where the UCITS produces a PRIIPs KID instead of a UCITS KIID, the UCITS must submit the PRIIPs KID to the CBI prior to the authorisation of the UCITS or approval of the new sub-fund.
  • Where a UCITS produces both a PRIIPs KID and a UCITS KIID, the UCITS must submit the UCITS KIID to the CBI.

The CBI clarified the position for RIAIFs that produce PRIIPs KIDs in the 46th Edition of its AIFMD Q&A with new Q&A 1125. RIAIFs which produce PRIIPs KIDs are required to file these PRIIPs KIDs on an ex post basis. This will include periodic updates to existing KIDs. The first annual reporting of such KIDs will take place in January 2024. Periodic updates to existing KIDs will be required to be filed with the CBI after the initial annual reporting exercise. Once reporting requirements are finalised the CBI will advise accordingly. QIAIFs are not required to file PRIIPs with the CBI.

The CBI published guidance on PRIIPs filing processes on its website.

When filing with CBI, a PRIIPs KID must be accompanied by a confirmation which must:

  • be signed by the responsible person or its legal advisor
  • confirm the PRIIPs KID complies in full with the requirements of
    • PRIIPs Regulation (EU) No. 1286/2014
    • Delegated PRIIPs Regulation (EU) 2021/2268
  • confirm the PRIIPs KID does not conflict with the content of the prospectus

Central Registers of Beneficial Ownership

As flagged in our December bulletin, the European Court of Justice ruled that the provisions in 5 AMLD requiring EU Member States to provide unlimited public access to registers of information on beneficial ownership are invalid on privacy and data protection grounds. Following the judgement, the search facility on the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies was restricted to designated persons and competent authorities only, with very limited information being available to other parties. 

The CBI has updated its guidance on the CBI's beneficial ownership register of CFVs noting that access requests by members of the public will not be processed, pending clarification of the legislative position.

Following the judgement, the co-rapporteurs of 6AMLD (which is currently progressing through the EU legislative process) confirmed that the judgement would be reflected in future beneficial ownership rules.

Further Extension of Some Covid-19 Interim Company Law Flexibility Measures

The 'interim period' of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 has again been extended to 31 December 2023 to permit companies to hold their annual general meetings and general meetings by electronic means. Temporary measures that provide for the remote execution of documents and which were particularly pertinent during the more acute phases of the pandemic when there were travel restrictions, are not being extended into 2023.

CBI Themed Inspection of ETFS

Following the publication of the IMF Ireland Financial Sector Assessment Program: Market Based Finance report in July 2022 (which was discussed in our August bulletin and which followed the IOSCO consultation paper on liquidity issues of April 2022), the CBI plan to commence a themed inspection of ETFs in Q1 2023, with a view to mapping the ETF ecosystem in Ireland (as flagged by CBI Deputy Governor, Darville Rowland).

Dear CEO-Letter on Consumer Protection

The CBI issued a Dear Chair letter titled "protecting consumers in a changing economic landscape". The letter reminds firms of the CBI's expectations set out in its Consumer Protection Outlook Report. In particular, the CBI highlights the expectations of firms dealing with consumers, in the following areas:

  • affordability and suitability
  • provision of relevant, clear and timely information
  • effective operational capacity
  • sales and product governance

This letter re-emphasises a previous update on consumer protection which the CBI issued in March to take account of what the CBI describes as the more challenging economic outlook. The letter is mainly aimed at financial services which deal with consumers in Ireland, particularly banks, insurance companies and financial advisors.

Irish Funds

Irish Funds updated its Periodic Report Q&A: Every periodic report in scope of the SFDR Level 2 disclosures will need to comply with the new disclosure templates for Article 8 and 9 products, effective for periodic reports published from 1 January 2023, irrespective of reference periods. To assist in the preparation of these disclosures, the Irish Funds ESG Reporting Sub-Group has updated the Irish Funds SFDR L2 periodic report Q&A.

Irish Funds Meeting with the CBI on Money Market Funds: On 14 December Irish Funds held a roundtable discussion with the CBI on developments relating to money market funds (MMFs). There was a wide-ranging and constructive discussion on recent market developments and MMF resilience, including developments in the UK gilt market, operational and pricing arrangements, broader market structure and challenges, as well as the European policy debate.

Board Diversity – A Guide for Investment Fund Boards: This guide has been produced by the INED working group within Irish Funds. As this working group is comprised of directors who serve predominantly on investment fund boards, it was decided that the scope of this paper should be aimed primarily at investment fund boards. The guide is aimed at helping investment fund boards achieve greater diversity and inclusion in their composition, with the objective of improving decision making and hopefully, producing better outcomes for investors.

For more information please contact a member of the Asset Management & Investment Funds team.

Date published: 31 January 2023