The Central Bank is proposing changes to its AIF Rulebook to both implement AIFMD 2.0 and to further enhance the framework for the establishment of private funds in Ireland.
The Central Bank of Ireland (“Central Bank”) has published a consultation setting out proposed changes to its AIF Rulebook, the Central Bank’s set of requirements applicable to alternative investment funds (“AIFs”) established in Ireland. The consultation follows a period of constructive engagement with industry and the recommendation in the Irish Department of Finance’s Funds Sector 2030 report that the Central Bank review its AIF Rulebook and associated requirements with a particular focus on the establishment of private funds in Ireland. The changes complement changes to the AIF rulebook made last year to facilitate the establishment of European Long Term Investment Funds in Ireland and will also implement the provisions of the revised Alternative Investment Fund Managers Directive (“AIFMD 2.0”), which must be transposed into national law by 16 April 2026.
Summary of Changes
We have summarised below the key changes proposed in the revised AIF Rulebook. There are also technical changes, including updating legislative references, deleting provisions that are fully addressed elsewhere (for example, all provisions applicable to money market funds are now addressed in the EU Money Market Fund Regulation) and ensuring consistency and alignment across the AIF Rulebook.
Loan Origination
Ireland was the first EU jurisdiction to introduce a loan originating funds framework (in 2014). AIFMD 2.0 introduces a pan-EU framework for loan origination, harmonising the rules applicable across all member states. It is proposed to delete the entire chapter on loan originating QIAIFs from the revised AIF Rulebook, as the rules relating to loan origination are now set out in AIFMD 2.0. The Central Bank is also currently willing to consider and grant derogations form the current AIF Rulebook for those AIFs that wish to adopt the rules relating to loan origination set out in AIFMD 2.0 instead.
Prohibition on Acting as Guarantor Removed
The amended AIF Rulebook would remove the prohibition on QIAIFs acting as guarantor, acknowledging that it is market standard for fund financing arrangements such as bridge financing and financing where the fund is part of a wider fund family, and also in the context of private equity investments where financing is provided to underlying portfolio companies / investment vehicles.
Subsidiaries
The AIF Rulebook allows for the establishment of subsidiaries and other co-investment in investment vehicles. In the revised AIF Rulebook, the Central Bank’s proposals clarify requirements around: (a) subsidiaries and (b) other holding entities and co-investment vehicles.
The changes recognise that AIFMD protections (eg, the rules in relation to the acquisition of control, valuation, depositary oversight and leverage look-through requirements) are already in place under the AIFMD and duplication in the AIF Rulebook is not necessary. Further, certain provisions, such as requiring Central Bank approval to establish subsidiaries, are deemed to be disproportionately burdensome and will be removed from the AIF rulebook. As a result, the current requirements related to wholly owned subsidiaries will be removed, including the requirement for Central Bank approval prior to the establishment of a subsidiary, the obligation for fund directors to constitute the majority of the subsidiary's board, and the restriction preventing subsidiaries themselves from entering into contracts unless the fund is party to those arrangements.
Removal of AIF Management Company Authorisation
There will no longer be a requirement for AIF management companies (which are used to facilitate the establishment of certain non-corporate AIFs, ie, common contractual funds and unit trusts) to be authorised by the Central Bank and therefore it is proposed to delete the chapter setting out the requirements for authorisation of AIF management companies. This is on the basis that all AIFs must appoint an alternative investment fund manager (“AIFM”), which is the legally responsible entity under the AIFMD, and there is therefore no need for a separately authorised management company for a common contractual fund or unit trust. Requirements regarding governance and the fitness of the directors of the AIF management company, applied through the Central Bank’s Fitness and Probity regime and other rules and guidance, will remain in place.
Share Class Guidance
The proposed amendments relating to share classes incorporate the Central Bank’s guidance on share classes for closed-ended funds to ensure that all funds, including open ended and limited liquidity funds that operate on a capital commitment basis can avail of these provisions. The proposed amendments also ensure that the provisions align with AIFMD requirements relating to preferential treatment.
Further, the establishment of share classes that provide for such differentiated participation will be permissible for all AIF types to reflect: (a) issue of shares / units / interests at a price other than net asset value without the prior approval of the Central Bank; (b) excuse and exclude provisions; (c) stage investing; and (d) management participation.
Warehousing
The revised AIF Rulebook requires that disclosures in the prospectus include more detail around any fees, charges or interest payable in relation to warehousing (ie, where the fund manager acquires investments before the fund is formally established and then transfers the assets to the fund after “first close”). The requirement relating to the QIAIF not paying more than current market value for warehoused assets is to be removed, in line with the provisions applicable to European Long Term Investment Funds (“ELTIFs”). This takes account of the obligation for AIFMs to perform valuation impartially and with all due skill, care and diligence and the fact that any connected party transaction will be subject to the connected party transaction rules.
Next Steps
Responses to the consultation are requested by 5 November 2025 and the Central Bank intends to publish the amended AIF Rulebook before the end of this year. The timely implementation of the AIFMD 2.0 requirements and the proposed changes to further facilitate the establishment of private funds in Ireland are welcome developments. We are also aware that that the Central Bank may at a future date propose changes to its retail investor AIF requirements, to ensure that Ireland offers a workable retail product for private assets, which can be a key consideration for asset managers in determining where to establish their funds. We will be contributing to an industry response to the consultation and may prepare our own response; please contact us if you would like us to include your feedback in any response.
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 update. Full details of the Asset Management and Investment Funds Department, together with further updates, articles and briefing notes written by members of the Asset Management and Investment Funds team, can be accessed at www.matheson.com.