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Asset Management & Investment Funds: Irish Practice Developments – November 2024

Asset Management & Investment Funds

Asset Management & Investment Funds: Irish Practice Developments – November 2024

Deadlines, CBI year-end deadlines, ETFs, ELTIFs, CBI filings, new company law, CBI markets update.

Tue 19 Nov 2024

13 min read

Deadlines

21 November 2024 - ESMA’s guidelines on funds’ names using ESG or sustainability-related terms - Apply from 21 November 2024. Any new funds created on or after 21 November 2024 should apply these guidelines immediately. The transitional period for funds existing before 21 November 2024 will be six months after that date, i.e. 21 May 2025.

Q3/4 2024 - Fitness and Probity - Central Bank of Ireland (CBI) to implement recommendations of Review of the Fitness and Probity Regime as discussed in our July bulletin.

Q4 2024 - Loan Originating Funds - CBI to consult on loan originating funds as discussed in A tapestry of regulatory change - Remarks by Patricia Dunne, Director of Securities and Markets Supervision.

31 December 2024 - Individual Accountability Framework (IAF) - Regulated financial service providers (RFSPs) will have adopted policies on how the Common Conduct Standards (and, where appropriate the Additional Conduct Standards) are integrated into the conduct of its affairs, including notification, communication and training. RFSPs should provide appropriate training on an ongoing basis to ensure that individuals are clear on their obligations in respect of the Conduct Standards and specifically what is expected of them in the context of their role. Firms should evidence that individuals have completed the relevant training and maintain up to date records in this regard.

31 December 2024 - Corporate Governance - Completion of reviews of board and individual director performance. Under the Irish Funds Corporate Governance Code, the overall board's performance and that of individual members must be reviewed annually. Once every three years a formal documented review and a review of the chairperson must take place. Length of service and ongoing independence of directors, as well as gender diversity at board level, should be considered in line with the CBI's CP86 expectations. Compliance with procedures for dealing with conflicts of interest and the terms of reference of any board committees should be reviewed at least on an annual basis.

31 December 2024 - Anti-money laundering/combatting the financing of terrorism - Designated persons (including UCITS mancos, UCITS, AIFMs and AIFs) should be aware of the regulatory expectation to offer training to their boards on the law relating to AML/CFT on an annual basis (and at such other times as may be appropriate). The CBI expects boards to have in place a defined process for the annual review of AML/CFT policies, including AML/CFT business risk assessments. The board should also consider an AML/CFT report, on at least an annual basis, in accordance with EBA guidelines on policies and procedures in relation to compliance management and the role and responsibilities of the AML/CFT compliance officer

31 December 2024 - Business plan/programme of activity - UCITS mancos, self-managed UCITS, AIFMs and internally managed AIFs (FMCs), where they have not already done so, may need to complete their annual performance review on service providers. FMCs delegating functions must maintain adequate oversight and perform ongoing due diligence on delegates. Accordingly, FMCs should review and confirm their delegate due diligence plans, including making preparations for any necessary on-site visits. FMCs should also obtain annual confirmations from service providers and relevant persons in accordance with their business plan/programme of activity, complete onsite visits with service providers, ensure adoption of valuation policy and make disclosure in respect of connected party transactions.

31 December 2024 - PRIIPs KID - The derogation granted to UCITS (and where applicable AIFs) from the calculation rules for “actual transaction costs” under Annex VI of the PRIIPs delegated regulation expires.

31 December 2024 - Listing Act: consultation on the Prospectus Regulation and call for evidence on prospectus liability - Consultation on the Prospectus Regulation and call for evidence on prospectus liability (discussed below) close.

1 January 2025 - Fitness & Probity - The PCF annual confirmation submission facility will be available to RFSPs on the portal from 1 January 2025. From 1 January 2025 and annually thereafter, RFSPs are required to submit to the CBI confirmation of compliance with the certification requirements (introduced by the Individual Accountability Framework) in respect of each PCF and all other CFs. Submission of confirmation of compliance with the certification requirements in respect of 2024 will be required in 2025. Further details and updated guidance incorporating the PCF Annual Confirmation and CF certification requirements will be published by the CBI closer to the submission time.

17 January 2025 - Digital Operational Resilience Act (DORA) - DORA will apply from 17 January 2025 as discussed in a recent CBI speech.

28 January 2025 - Listing Act: ESMA consultation on the MiFID II research regime - Consultation (discussed below) will close.

31 January 2025 - UCITS manco, AIFM ownership confirmation - UCITS mancos and AIFMs must file their annual ownership confirmation by 31 January 2025.

31 January 2025 - MiFID II marketing communications - In accordance with the CBI Dear CEO letter, mancos providing MiFID II services to retail clients must complete review of marketing and advertising practices with board approved action plan by 31 January 2025.

20 February 2025 - UCITS KIID/PRIIPs KID - All UCITS made available to "retail investors" in the EEA are required to provide such investors with a PRIIPs KID prior to their investment. In this context, "retail investor" includes any investor that does not fall within the definition of a "professional client" under MiFID. A UCITS which is not made available to "retail investors" in the EEA is not obliged to provide a PRIIPs KID and may continue to produce a UCITS KID.

This may be important for marketing in the UK. A UCITS producing a UCITS KIID must update its KIID on an annual basis for each sub-fund/standalone fund within 35 business days of the end of each calendar year. The annual update of the UCITS KIID must be filed with the CBI. The CBI website notes that the UCITS KIID return will not be a scheduled return on the Portal and is now set up as an ad hoc return. Any update to the KIID filed with the CBI must be translated and filed in other host jurisdictions as necessary. It must then be uploaded on the UCITS' website.

Where a UCITS produces both a UCITS KIID and PRIIPs KID, the latest versions of both should be filed with the CBI through the Portal. Unlike the UCITS KIID, there is no annual refresh deadline for the PRIIPs KID. The PRIIPs KID must be reviewed regularly and revised when there is a significant change, and at least annually. PRIIPs KIDs (and PRIIPs KID updates) must also be filed with the CBI. Again, the CBI website has been updated to note that the PRIIPs KID return will not be a scheduled return on the Portal and is set up as an ad hoc return.

28 February 2025 (expected deadline) - Fund profile return - The annual CBI fund profile return is required for all Irish authorised sub-funds. It is to be prepared for the period up to 31 December 2024, with an anticipated submission deadline of 28 February 2025. The CBI does not anticipate that the fund profile will change from year to year, as changes would most probably reflect changes within the fund's offering documents. Therefore, year-to-year updates to the fund profile are expected to be minimal and reflect significant changes. The CBI updated its Fund profile guidance and template in 2022.

31 March 2025 - ICCL Report - For the purposes of the Investor Compensation Company DAC’s compensation scheme, authorised UCITS/ AIFM management companies authorised to perform individual portfolio management are required to file the ICCL report, see  UCITS - management companies reporting requirements.

Early 2025 - CBI plans to implement its new supervisory approach. The CBI’s new operating structure will include seven directorates, which will report into the existing Deputy Governors for Financial Regulation and Consumer and Investor Protection. The directorates responsible for sectoral supervision will include a Capital Markets & Funds Directorate which will have integrated teams responsible for all elements of its mandate and supervising risks as they relate to the sector. There will be a Horizontal Supervision Directorate working with the sectoral supervisory teams on a system-wide and thematic basis. It will provide specialist input on key cross-sectoral risks such as conduct, behaviour and culture, AML/CFT, financial resilience, operational resilience and technology risks. There will also be a Supervisory Risk, Analytics and Data Directorate, a Policy and International Directorate and an Enforcement Directorate.

21 May 2025 - ESMA’s guidelines on funds’ names using ESG or sustainability-related terms - End of transitional period - guidelines apply to UCITS and AIFs existing before 21 November 2024 from 21 May 2025.

1 July 2026 - UK OFR - Final OFR’s landing slots open for fund operators of umbrella EEA UCITS whose name begins with the letter “W-Z and firms with digits in the title” (in the TMPR) until 30 September 2026.

Reporting obligations may vary on a firm-by-firm basis. The above list does not cover:

By way of example, the Companies (Accounting) Act 2017 obliges UCITS investment companies and AIF investment companies to file annual accounts with the CRO within 11 months of their financial year-end.

CBI timeframes for applications with a year-end effective date

The CBI issued timeframes for receipt of applications that are seeking a Christmas or year-end effective date for:

You can read more here.

CBI updates its streamlined filing process for implementation of ESMA’s guidelines on funds’ names using ESG or sustainability-related terms

The CBI updated the streamlined filing process which it established to facilitate updates to fund names made in order to bring UCITS and AIFs into compliance with ESMA’s guidelines on funds’ names using ESG or sustainability-related terms. Initially the streamlined process was limited solely to name changes that are required in order for funds to comply with the guidelines. Following the CBI update, the streamlined filing process will also facilitate minor changes to disclosures in the prospectus, supplement and/or SFDR annex that are required in order for funds to comply with the guidelines. Such minor changes to disclosures should not represent a material change to either of the investment objective, investment policy, strategy or risk profile of the fund and should be made solely for the purpose of bringing the fund into compliance with the guidelines.

In order to avail of this adjusted streamlined process, the CBI will require duly completed attestations, as detailed in the CBI process clarifications.

The CBI will carry out a sample review of the submissions noted via the streamlined filing process. Changes may therefore be required to fund documentation at a later date notwithstanding the noting issued.

CBI clarification of UCITS ETF naming requirements at share class level

The CBI updated its UCITS Q&As to clarify that the UCITS ETF identifier can be included at the level of a sub-fund or a share class. As recently noted by CBI Deputy Governor Derville Rowland (discussed here), this will provide greater clarity for fund managers and investors, particularly where the fund has both listed and unlisted share classes.

CBI requirements for ELTIFs which are open-ended with limited liquidity

The CBI updated its ELTIF application form to reflect the coming into force of (EU) 2024/2759 RTS relating to the ability to establish open-ended ELTIFs. Information relating to the authorisation process for ELTIFs has also been updated. The authorisation process for ELTIFs will vary depending on the targeted investor type (retail, professional or qualified investor).

ELTIFs may be established as closed-ended or open-ended with limited liquidity.

Where an AIFM wishes to establish either a professional investor ELTIF or a qualified investor ELTIF which is open-ended with limited liquidity and avail of the CBI’s 24 hour authorisation process, it must make a pre-submission, in good time prior to the requested authorisation, which addresses the following:

Once cleared, such an ELTIF can proceed to authorisation in the normal course.

Retail investor ELTIFs should include details listed above in the initial filing with the CBI.

The ELTIF Regulation sets out requirements for the investment policies, the scope of eligible assets, diversification requirements and general operating conditions for these funds. The CBI’s regulatory requirements in relation to ELTIFs are set out in Chapter 6 of the AIF Rulebook.

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 has been enacted. Key issues of interest to variable capital companies and management companies include:

This legislation has not yet been commenced.

CBI Markets Update

The CBI published issue 10 of 2024 of its markets update which included:

For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.