The Central Bank of Ireland (Central Bank) published a new Markets Update (Issue 3 2016 dated 2 June) which includes:

  • Further consultation following on CP86: Fund Management Company Effectiveness. As expected, the Central Bank has issued a further consultation paper on Fund Management Company Effectiveness. Consultation Paper CP86 – Third consultation paper which addresses managerial functions, operational issues and procedural matters. It sets out the work already undertaken by the Central Bank in relation to governance of fund management companies and outlines the proposed approach to Compliance and Supervisability issues. The consultation closes on 25 August 2016.
  • Feedback on CP99: Consultation on Amendments to the AIF Rulebook. This summarises the responses received along with the Central Bank’s comments and decisions.
  • Publication of First Set of Amending Central Bank UCITS Regulations 2015. The Central Bank UCITS Regulations 2015 require amendment as a consequence of the implementation of UCITS V. The Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (UCITS)(Amendment) Regulations 2016 are in the process of being finalised and the amended Regulations will be published shortly.
  • CP105: Consultation on amendments to the Central Bank UCITS Regulations. The Central Bank issued a consultation on a second set of amendments to the Central Bank UCITS Regulations. CP105 sets out the draft amending Central Bank UCITS Regulations in its schedule. Section 1 details amendments consequential on the implementation of UCITS V and section 2 details technical amendments. CP105 closes on 25 August 2016.
  • Nineteenth Edition of the AIFMD Q&A. The new questions added are: Q&A 1104 (Fund Management Company - organisational effectiveness); Q&A 1105 (Rules - significant Influence in the context of certain types of AIFs) and Q&A 1106- 1107 ( Companies Act 2014). (Q&A 1106 was previously issued in the form of a general information note and included in the Markets Update published on 12 June 2015.)
  • Thirteenth Edition of the UCITS Q&A. The new questions added are: Q&A 1063 (UCITS Management Company - organisational effectiveness); Q&A 1064 (share class hedging); and Q&A 1065- 1066 (Companies Act 2014). (Q&A 1065 was previously issued in the form of a general information note and included in the Markets Update published on 12 June 2015.) An existing question - Q&A 1013 - which deals with past performance data has been amended and the title of this section has been revised accordingly.
  • Market Abuse Regulation: The Central Bank has amended its website guidanceon the Market Abuse Regime.

Of immediate interest in the context of CP 86

The Central Bank is proposing a number of rules and guidance on operational issues. Of particular interest, in the context of supervisability, is the following rule on location

A fund management company (which includes a UCITS ManCo, an AIFM, a SMIC and an internally managed AIF) which has a PRISM impact rating of Medium Low or above will be required to have :

  • at least three Irish resident directors or at least two Irish resident directors and one designated person based in Ireland; and
  • at least two thirds of its directors in the EEA; and
  • at least two thirds of designated persons in the EEA.

A fund management company which has a PRISM impact rating of Low will be required to have:

  • at least two Irish resident directors; and
  • at least two thirds of its directors in the EEA; and
  • at least two thirds of designated persons in the EEA.