The Central Bank of Ireland (CBI) published its feedback report on 23 July 2026 in respect of its review of delegation in the Irish funds sector.

This review was conducted with a representative sample of fund management companies (FMCs) and involved detailed quantitative and qualitative surveys and onsite inspections to assess delegation arrangements across the sector.

FMCs retain ultimate responsibility for all delegated activities and must maintain sufficient substance, resources and oversight to ensure that delegated functions are performed in accordance with regulatory requirements and in the best interests of investors. Firms are required to demonstrate that they exercise sound management and decision making and exercise sound and effective control over any function they delegate. This has been an area of continuing focus by the CBI in its supervisory work where it has set out its expectations through thematic reviews and communications to industry.

In general, the CBI found that FMCs operating a delegation model have good governance frameworks, controls, oversight processes and data capabilities in place. Areas for improvement were identified by the CBI, including board independence, over-reliance on group level committees, resourcing concerns, lack of contingency planning and limitations with data access. The Central Bank’s findings underscore that while delegation delivers important benefits for investors and supports the optimal functioning of European capital markets, it must be accompanied by robust governance and oversight within the authorised FMC.

The CBI will engage in a review of the governance arrangements for FMCs in 2026, including enhancements to the current framework regarding delegation. This may include simplifying the FMC Guidance (also known as “CP86”), reinforcing the PCF framework for FMCs, enhancing governance requirements and considering how the CBI might proportionately apply the IAF/SEAR framework to the funds sector.

Delegation models

While models vary by particular FMC, the CBI observed that the main operating models observed were:

• FMCs delegating portfolio management activities to Group entities, while retaining risk management activities;
• a hybrid model, where the FMC utilises both group and third-party delegates to perform portfolio management, while retaining risk management activities;
• a third-party model, where the FMC delegates portfolio management activities and certain risk management tasks to multiple third-party delegates.

FMC action required: Gap analysis and plan

FMCs must conduct a gap-analysis of the CBI delegation feedback report and, by end of 2026, put in place a time-bound plan to address any issues identified.

CBI expectations and findings

The report sets out under 5 core themes of Governance, Portfolio Management, Risk Management, Delegate Oversight, and Data Capabilities what the CBI expects to see in a delegation model from a supervisory perspective. It then states observations during its review of FMCs. This is summarized below:

Please contact any of our Asset Management & Investment Funds Partners or your usual contact at William Fry for support to undertake a gap-analysis, put in place a compliance plan, prepare board communication and any necessary approvals by year-end.

Contributed by: Ann Shiels