CBI letter following its thematic review of closet indexing

The Central Bank of Ireland (CBI) published the outcome of a review of UCITS funds on the subject of closet indexing. The review highlighted issues around the effectiveness of investor disclosure and the legitimate expectations of investors in respect of the service provided by fund managers. The Central Bank expects impacted funds to update documentation by 31 March 2020.

Updated CBI guidance on the use of financial indices by UCITS

The CBI issued updated guidance on the use of financial indices by UCITS on 23 July 2019. The guidance has been updated to clarify the circumstances where an index certification is not required.

UCITS exemption to produce and provide a PRIIPs KID

As expected, the date of the UCITS exemption to produce and provide a PRIIPs KID has been extended by two years to 31 December 2021. This is legislated for in the Directive on the Cross-Border Distribution of Collective Investment Funds. The CBI issued the 27th Edition of its UCITS Q&A which reflects the extension of the UCITS exemption.

Update of the Investment Limited Partnership Act and the ICAV Act

The Irish Government published the Investment Limited Partnerships (Amendment) Bill 2019 which will substantially overhaul the Investment Limited Partnership Act 1994. The Bill also includes amendments to the ICAV Act. Go to publication.

Register of Beneficial Ownership of Companies and Industrial & Provident Societies

The Registrar of Companies has been appointed as the Registrar of Beneficial Ownership of Companies and Industrial & Provident Societies (RBO) with effect from 29 July 2019. The RBO is open to accept filings. The deadline for filing beneficial ownership information with the RBO for entities incorporated before 22 June 2019 is 22 November 2019.

EUROPEAN

Cross-border fund distribution improvements from August 2021

The following Capital Markets Union proposals on the cross-border distribution of funds came into force on 1 August 2019:

  • Directive (EU) 2019/1160 (the Directive) amending the UCITS Directive and the AIFMD with regard to the cross-border distribution of collective investment undertakings. The Directive is to be transposed by 2 August 2021.
  • Regulation (EU) 2019/1156 (the Regulation) on facilitating the cross-border distribution of UCITS and AIFs and amending the European Venture Capital Funds Regulation (EuVECA Regulation), the European Social Entrepreneurship Funds Regulation (EuSEF Regulation) and the Regulation on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) (PRIIPs Regulation). The Regulation applies from 1 August 2019 with more substantive provisions applying from 2 August 2021.

ESMA consultation on performance fees

ESMA launched a public consultation on draft guidelines on performance fees under the UCITS Directive. The draft guidelines aim to harmonise the way in which performance fees can be charged to the UCITS and its investors while ensuring common standards of disclosure.

ESMA's stress testing guidelines for money market funds

ESMA issued two sets of guidelines regarding the stress testing of money market funds and reporting on money market funds to national competent authorities (NCAs), aimed at ensuring a coherent application of the Money Market Fund (MMF) Regulation.