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AIFMD Update



Central Bank updates Q&A

On 12 June 2015, the Central Bank published updated Q&A relating to transitional arrangements and marketing of unauthorised AIFs (ID1030, ID1058 and ID1089 – ID1093). 

Transitional arrangements

PIFs and QIAIFs with non-EU AIFMs

Pending the issue of ESMA’s advice to the European Commission on the application of the AIFMD passport to non-EU AIFMs, professional investor funds and QIAIFs can continue to be managed by non-EU AIFMs under the existing transitional arrangements until at least 22 October 2015.

Application of the NU Series of Notices to professional investor funds

From the date that its AIFM becomes registered or authorised a professional investor fund will be subject to a number of conditions the cumulative effect of which will be to apply an equivalent regime to the professional investor fund regime as is currently set out in the NU Series of Notices. For example, it will be subject to a condition that it shall comply with the provisions of its prospectus and to the conditions concerning the publication and content of financial statements.

If a professional investor fund has a registered AIFM, the current non-UCITS depositary liability regime will apply unless the parties choose to apply the AIFMD depositary liability regime.

Marketing of “unauthorised AIFs”

The Central Bank has clarified that it considers an unauthorised AIF to be an investment fund which is not authorised by the Central Bank under domestic investment fund legislation.

The Central Bank has confirmed that:

  • An unauthorised AIF may be marketed to appraised/self-certifying investors in Ireland if it has an authorised AIFM and that AIFM ensures that the unauthorised AIF at all times meets all the requirements which would apply to the AIF if it was a QIAIF.
  • An unauthorised AIF may be marketed to all retail investors if it has an authorised AIFM and that AIFM ensures that the unauthorised AIF at all times meets all the requirements which would apply to the AIF if it was a RIAIF.
  • As an exemption to the requirement to meet all RIAF requirements AIFs which are recognised as real estate investment trusts (REITs) do not need to comply with the leverage conditions which apply to RIAIFs in order to be permitted to market to retail investors.
  • Retail investors can trade, on the secondary market, in unauthorised AIFs. Such secondary market trades will usually occur through investment intermediary firms and, therefore, the protections of the MIFID regime will apply.
  • In the context of an unauthorised AIF with Irish retail investors due to secondary market trading, the Central Bank does not consider the provision of documents, including rights issue and/or open offer documentation, to existing investors, as an actionable breach of the rules in relation to the marketing of AIFs provided that the documentation is strictly confined to what is necessary to comply with applicable legal obligations in relation to the treatment of shareholders.

Revised AIF Rulebook

On 12 June 2015, the Central Bank also published the latest edition of the AIF Rulebook; the only update made to the previous edition was the inclusion of the following definition of ‘Irish resident’:

“Irish resident” is defined as a person who is present in Ireland for the whole of 110 business days per year.

This follows the announcement by the Central Bank in its feedback to its consultation on new corporate governance requirements for fund management companies (CP86) that 110 days presence in Ireland will now constitute the definition of Irish resident.

Contributed by Niall Crowley