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Central Bank of Ireland Consults on Amendments to AIF Rulebook
AUTHOR(S): Michael Jackson, Tara Doyle, Dualta Counihan, Elizabeth Grace, Philip Lovegrove, Shay Lydon, Anne-Marie Bohan, Joe Beashel, Liam Collins
PRACTICE AREA GROUP: Asset Management and Investment Funds
The Central Bank of Ireland (“Central Bank”) has launched a consultation paper (“CP99”) outlining a number of proposed amendments to its Alternative Investment Fund (“AIF”) Rulebook.
The AIF Rulebook consolidates in a single document the conditions which the Central Bank imposes on AIFs, their managers (alternative investment fund managers (“AIFMs”) or AIF management companies), depositaries and administrators. CP99 arises as part of the Central Bank’s commitment to keep the AIF Rulebook under review, and to amend it periodically as and when appropriate revisions are identified, including on the basis of supervisory experience and stakeholder engagement.
To keep you updated regarding the proposals which have been put forward by the Central Bank for stakeholder feedback and discussion in CP99, Matheson's Asset Management Group partners have compiled a useful chart which identifies the policy revisions to the AIF Rulebook, and a table showing the technical updates proposed. This resource may be accessed here.
Some of the proposals addressed within CP99 which should be noted include:
- A requirement for AIFMs and AIF management companies to produce a second set of semi-annual accounts covering the second half of the financial year;
- An extension to the category of investors provided with an exemption from the QIAIF eligibility criteria and minimum subscription amount, to specifically include the AIFM or an entity within the AIFM's group, directors of the AIFM and certain employees of the AIFM;
- Where depositaries provide services to non-Irish AIFs, the quarterly return provided to the Central Bank must contain aggregate information on all non-Irish AIFs to which they provide depositary services, including funds covered in returns provided by other entities;
- An extension of the requirements applicable to QIAIFs with registered AIFMs during the start up period in order to require the registered AIFM to treat all investors fairly, and to inform investors of any arrangement made by the depositary to contractually discharge itself of liability and any changes with respect to depositary liability; and
- An alignment of the rules which apply to collateral received by retail investor AIFs (“RIAIFs”) under an OTC derivative contract, a repurchase or a reverse repurchase agreement or a securities lending contract with those that are applied to UCITS, and an amendment to the requirements for eligible counterparties as part of this alignment, so that the rules would include a reference to a threshold which AIFMs must apply in their credit assessment of counterparties. It is also proposed to align the reference to external credit ratings in the investment rules for RIAIF money market funds and QIAIF money market funds with the approach taken to external credit ratings in the equivalent UCITS rules.
The Central Bank’s consultation on this series of proposed changes to the AIF Rulebook closes on 24 February 2016. The partners at Matheson intend to prepare a response to CP99, and we will also contribute to industry feedback and responses. We would be delighted to speak with you should you have any queries in relation to the proposals, or to discuss your viewpoint regarding any aspect of the consultation. Please get in touch with your usual Asset Management and Investment Funds contact in this regard.
CP99 may be accessed here.