The Central Bank of Ireland (“Central Bank”) has published updated UCITS rules and guidance, together with a feedback statement relating to Consultation Paper 161 (“CP161”). The updated documents are:
- Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2026 (“Central Bank UCITS Regulations”) which repeal and replace the earlier regulations published in 2019; and
- Central Bank Guidance on performance fees for UCITS and certain types of retail investor AIFs (“Performance Fee Guidance”).
The publication follows a consultation commenced in September 2025, the purpose of which was to align the Central Bank’s framework with amendments to the EU UCITS framework introduced under AIFMD 2.0.[1] The Central Bank has taken the opportunity to update the framework to take account of domestic policy developments since the current Central Bank UCITS Regulations were published. The consultation also proposed updates to the Central Bank guidance on performance fees for UCITS and certain types of retail investor alternative investment funds (“AIFs”). Our earlier briefing note sets out the changes that were consulted upon in CP161.
We have summarised below some of the key changes confirmed in the published Central Bank UCITS Regulations. The changes made to the Performance Fee Guidance (amending the previous 2021 version) are intended to align with the regulations and to fully implement the European Securities and Markets Authority (“ESMA”) Guidelines on performance fees in UCITS and certain types of AIFs (“ESMA Guidelines”)
Liquidity management tools
In light of the new EU framework for liquidity management tools introduced under AIFMD 2.0, the Central Bank has included a dedicated section on liquidity management tools (“LMTs”) in the Central Bank UCITS Regulations containing provisions on general operational requirements for LMTs along with rules for UCITS selecting, activating and deactivating side pockets, suspensions, swing pricing and redemption gates. The Central Bank has clarified and amended certain provisions to align with terminology used in AIFMD 2.0 and has retained the proposed requirement for the fund management company (“FMC”) to consider selecting at least one anti-dilution tool and one quantitative-based tool from the list set out in AIFMD 2.0. The final regulations confirm that the use of in-specie / in-kind redemptions as an LMT differs to the exchange of assets in settlement of redemptions, which does not constitute an LMT.
The Central Bank has removed the requirement to notify the Central Bank when the FMC activates or deactivates any LMT other than in the ordinary course of business. LMT notification requirements will continue to be required in the Daily Investment Funds Return report.
With regard to suspensions of net asset value (“NAV”) calculation or subscriptions, repurchases or redemptions, there is a separate notification requirement. The Central Bank has amended the proposal to now require the FMC to notify the Central Bank “without delay” (replacing “immediately”) when suspensions are activated.
Redemption gates
The Central Bank has removed the requirement that a redemption gate may not be imposed on any dealing day unless the total redemption requests exceed at least 10% of the total number of units of UCITS or at least 10% of the NAV of the UCITS, aligning the Central Bank’s approach with the LMT rules under AIFMD 2.0, which allow management companies determine the appropriate redemption gate percentage for each fund under management.
Performance fees
Significant changes have been made to the regulations governing performance fees. Potential legislative impediments to the operation of hurdle rates, fulcrum fees or other symmetrical fee models have been addressed by permitting a broader range of performance fee models in line with the EU framework set out in the ESMA Guidelines. The restriction on the frequency of payment has been replaced with a restriction on frequency of crystallisation of the performance fees and is subject to a number of exceptions.
Depositaries’ obligations in relation to performance fees have been clarified so that the FMC must ensure that the depositary – or a competent person appointed by the FMC and who is approved by the depositary – verifies that procedures have been effectively implemented to ensure that any performance fees payable and accrued pursuant to the UCITS performance fee payment cycle are calculated in accordance with the constitutional document and prospectus of the UCITS.
Side pockets
Respondents to the Central Bank’s consultation had requested that the provisions specific to side pockets be removed, noting that requirements relating to side pockets are covered in the transposing UCITS Regulations. The Central Bank noted in the feedback statement that the provision on side pockets is not intended to define when a side pocket can be used but to emphasise that, while side pockets can be used by all UCITS investment funds, if the UCITS intends to utilise side pockets, the ability to do so must be set out in the UCITS’ constitutional documents.
Connected party transactions
The provisions relating to transactions involving connected parties and the scope of the requirements have been clarified.
NAV-based fees
The regulations introduce a new disclosure requirement for the maximum fee payable for recurring fees based on the NAV.
Management companies
The Central Bank has retained the residency requirements for directors and designated persons for firms that had been rated “low” under the previously applicable PRISM supervisory framework[2] as a minimum requirement for all management companies. It also retains its discretion to impose additional requirements beyond the minimum residency requirements for directors and designated persons of UCITS management companies at the point of authorisation based on the nature, scale and complexity of the entity.
UCITS exchange traded funds
The amended Central Bank UCITS Regulations clearly provide that any UCITS exchange traded fund (“ETF”) may automatically avail of the new provisions enabling UCITS ETFs to have different dealing cut-off times for cash and in-kind dealings, without the need to apply for a specific derogation. ID1030 in the Central Bank’s UCITS Q&A, which previously addressed this point, is therefore no longer required and will be deleted.
The Central Bank notes the use of redemption in kind by a UCITS ETF in the normal course of regular dealing activities by an authorised participant or market-maker, and has removed wording requiring that, in the case of UCITS ETFs, the original subscription be made in-kind.
The regulations now also incorporate existing guidance permitting the ETF naming requirement at share class level.
Reporting
Requirements relating to regulatory reporting have been replaced with a single flexible reporting requirement referring to Central Bank guidance as published on its website.
Transitional arrangements
No transitional arrangements are provided for in relation to existing UCITS on the basis that the Central Bank considers such arrangements are not necessary, noting that there is no transitional period provided for in AIFMD 2.0.
Next steps
The Central Bank confirmed in February 2026 that updates to existing UCITS documents arising from amendments to the Central Bank UCITS Regulations can be made using a streamlined filing process. Fund managers should review the updated UCITS rules and guidance to establish whether changes are required to their fund documents, policies and procedures.
Contact us
Please get in touch with your usual Asset Management and Investment Funds Department contact or any of the contacts listed in this publication should you require further information in relation to the material referred to in this briefing note.
[1]. Directive (EU) 2024/927. The AIFMD 2.0 Directive was transposed in Ireland in May 2026 – see our earlier briefing note “Amended rules for Irish AIFs and UCITS; AIFMD 2.0 transposed in Ireland”. The changes to the UCITS framework are sometimes referred to as “UCITS VI”.
[2]. The Central Bank’s risk-based approach – PRISM – was replaced with a new supervisory approach in 2025.
