The Central Bank recently issued a feedback statement and a revised draft of its new AIF Handbook following its October 2012 consultation (“CP60”) on implementation of the Alternative Investment Fund Managers Directive.
Key points made in the feedback statement are as follows:
- The Central Bank will dispense with the requirement that the promoter of an alternative investment fund (“AIF”) must be subject to a process of approval by the Central Bank.
- The Central Bank views the actions of a director of an AIF in difficulties as matters which can be taken into account when making any future assessments of the fitness and probity of that director.
- A qualifying investor alternative investment fund (“QIAIF”) which can create side-pockets for illiquid or hard-to-value assets must describe itself as “open-ended with limited liquidity”.
- A retail investor alternative investment fund (“RIAIF”) may carry out physical short-sales.
- The Professional Investor Fund (“PIF”) regime will be discontinued but PIFs will not be required to convert to a QIAIF or a RIAIF. No new PIF structures, sub-funds or share classes will be authorised from 22 July 2013. Transitional arrangements are detailed in the new AIF handbook
- The Central Bank considers that RIAIFs and QIAIFs should be subject to the full AIFMD regime. However, the Central Bank acknowledged that this may be onerous for smaller start-up funds. Therefore, the Central Bank has given start-up AIFMs which establish QIAIFs time to grow their assets under management before they become subject to the full AIFMD regime.
- Existing QIAIFs with promoters already approved by the Central Bank can continue to operate under the current rules.
- Applications for authorisation as an AIFM will be processed prior to 22 July 2013. However, authorisation as an AIFM will not issue until 22 July 2013 at the earliest.
- From 22 July 2013 depositaries must comply with the provisions of AIFMD. The Central Bank did not clarify whether a grandfathering period (i.e. to 22 July 2014) will apply in this respect. In our view it would be difficult for the timetable for the effective date of a depositary’s obligations to be decoupled from that of the relevant AIFM.
We will keep you up-to-date with all future developments in this area.