Asset Management & Investment Funds: Irish Practice Developments – July 2022

Taxonomy alignment disclosures

The Central Bank of Ireland (CBI) has set out its expectations for funds required to disclose under the EU Taxonomy Regulation (TR). This approach will apply until 1 January 2023, when the Sustainable Finance Disclosure Regulation (SFDR) Level 2 template disclosures come into force.

The CBI expects that where disclosure updates/amendments are required, they be made:

  • at the earliest available opportunity
  • in the normal course of business
  • by 1 January 2023, at the latest

Read more here.

CBI removes pre-submissions requirement for some QIAIFs

As a rule, Qualifying Investor AIFs (QIAIFs) may avail of the CBI’s fast-track approval process which provides for approval of QIAIFs within 24 hours of submission of an application for authorisation.

However certain QIAIFs are required to make a pre-submissions which must be cleared by the CBI before the application for authorisation may be filed. The CBI updated its requirements for the pre-submission process for a QIAIF.

Prior to this update, pre-submissions were required in respect of loan origination QIAIFs, life settlement QIAIFs, all real estate QIAIFs and QIAFs investing in crypto assets.

Following the update pre-submissions are required for:

  • QIAIFs proposing to invest in Irish property assets
  • QIAIFs proposing to invest in crypto-assets (unless the QIAIF proposes to invest no more than 10% of its NAV in cash-settled bitcoin futures traded on the Chicago Mercantile Exchange and can satisfy certain conditions)

The update is part of the CBI's ongoing review of its authorisations processes.

CBI outsourcing register

The CBI will soon publish the templates and associated instructions for completion and submission of the outsourcing register on the CBI website.  The register and the instructions will also be sent directly to the firms which are designated to complete the submission (medium low and above). The CBI expect that the submission date will be approximately eight weeks from the publication / circulation of the template and instructions. This follows the December 2021 publication of the CBI's cross industry guidance on outsourcing with a feedback statement. 

Helpfully, the feedback statement notes that "The Guidance applies to ‘regulated firms’ rather than regulated products.  In the case of investment funds, consequently it should be understood that the Guidance will apply in a proportionate manner to the fund service providers associated with the operation of the fund and not to the investment fund itself.  Nevertheless, it should be noted that the board of directors of an externally managed investment company should ensure that it supports the ability of the fund management company to comply with all regulatory obligations, including this Guidance."

MMFs

In issue 7 of 2022 of its markets update the CBI published a notice of intention in relation to the application of the ESMA Guidelines on stress test scenarios under the Money Market Fund (MMF) Regulation. The CBI will, in due course, consult on the incorporation of a provision in the Central Bank UCITS Regulations and AIF Rulebook that all managers of MMFs adhere to the Guidelines. In the interim, the CBI expects full compliance with the Guidelines from 4 July 2022.

Company law reform and the Corporate Enforcement Authority

The Corporate Enforcement Authority has been established and the Companies (Corporate Enforcement Authority) Act 2021 (the Act) commenced.

You can read here about the organisation, structure and powers of the new Corporate Enforcement Authority or listen to our SoundBite.

You can read here about the Act's company law amendments. All of the Act has been commenced other than section 35, which relates to the provision of directors' PPS numbers in certain documents submitted to the Registrar of Companies.

Screening of third country investments

The Government will publish the Screening of Third Countries Investment Bill. You can read about this development here.

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

Date published: 19 July 2022