The Central Bank has operated a Qualifying Investor Fund regime for some time and it has proved extremely popular with fund promoters. The QIF regime governs funds which are only marketed to sophisticated investors who fulfil the Qualifying Investor criteria set out below as well as minimum subscription requirements. One of the key advantages of this regime is that QIF funds can be authorised on the day after the fund documentation is filed with the Central Bank, reducing the lead in time for marketing funds very dramatically which is a significant advantage in the fast changing funds marketplace. The Central Bank has now revised the QIF regime to make it more accessible to both investors and promoters.This significant development is likely to be particularly helpful to non-Irish funds seeking to redomicile as QIFs into Ireland and also to be of interest to funds who wish to position themselves to best advantage in advance of the introduction of the Alternative Investment Managers Directive or AIFMD. The changes take immediate effect so that new Qualifying Investor Funds can avail of the revised regime, while existing funds who wish to avail of the revised regime are likely to require amendment of their documentation.
The improvements are set out below:
- the minimum subscription amount is reduced from €250,000 to €100,000
- the definition of a Qualifying Investor is now more closely aligned with MiFID. A Qualifying Investor may be:
- an investor who is a professional client within the meaning of Annex II of Directive 2004/39/EC (Markets in Financial Instruments Directive); or
- an investor who receives an appraisal from an EU credit institution, a MiFID firm or a UCITS management company that the investor has the appropriate expertise, experience and knowledge to adequately understand the investment in the fund; or
- an investor who certifies that they are an informed investor by providing the following:
- confirmation (in writing) that the investor has such knowledge of and experience in financial and business matters as would enable the investor to properly evaluate the merits and risks of the prospective investment; or
- confirmation (in writing) that the investor's business involves, whether for its own account or the account of others, the management, acquisition or disposal of property of the same kind as the property of the fund.
Again, this development is helpful and is also likely to be of interest to non -Irish funds seeking to redomicile as QIFs into Ireland).