The Central Bank of Ireland (“Central Bank”) has today released a public consultation (“CP 60”) on the Irish regulatory regime for non-UCITS funds. CP 60 proposes significant changes in connection with the Alternative Investment Fund Managers Directive (“AIFMD”) which is to be implemented in July 2013. The consultation process will be a six week period and during this time, industry participants are encouraged to make submissions, either directly or through the Irish Funds Industry Association (“IFIA”).

Click here to view CP60 in full

Overview of the New Regime

The Central Bank is availing of the opportunity presented by the upcoming implementation of the AIFMD to overhaul the non-UCITS funds regime. It is proposed to replace the current Qualifying Investor Fund (“QIF”) regime with a new Qualifying Investor Alternative Investment Fund (“QIAIF”) regime. It is also proposed to create a new and separate Retail Investor Alternative Investment Fund (“RIAIF”) regime for retail investors in non-UCITS products.


The principal changes proposed in the new QIAIF regime are:

  • Removal of the long-standing promoter regime (which includes the related promoter approval and capital requirements);
  • Provision for fair, as opposed to equal, treatment of investors in different share classes. Different liquidity and economic terms will now be permitted;
  • Provision for “exclude and excuse share classes” so that all shareholders in a fund no longer need to participate in the same pool of investments;
  • Removal of specific additional Prime Broker and Counterparty credit rating requirements to reflect the requirements of AIFMD only;
  • Removal of existing property fund rules; and
  • Greater flexibility around side pockets on investment.

The proposed new rules also include changes to loosen the current investment constraints on retail non-UCITS funds. A range of investment limits which currently apply to retail non-UCITS funds will be changed so as to allow retail investors to use Ireland’s new non-UCITS regime to invest in unlisted securities, derivatives and other asset classes to an extent which has not been possible for such investors up to now.


It is also proposed that all existing non- UCITS Notices, Guidance Notes and Policy Documents issued by the Central Bank will be replaced by new handbooks covering the regulation of AIFMs, QIAIFs, RIAIFs, Depositaries and Administrator requirements.


The consolidation will result in the removal of a large number of minor regulatory requirements that have accumulated over the years. It is, therefore, expected that a more effi cient and streamlined regulatory environment for all types of alternative investment funds in Ireland will be achieved. Changes to share class rules, the removal of existing property fund rules and the issuance of partly paid units will make it more attractive and easier to establish both private equity and property funds in Ireland.

Strengthening of the Irish Market

Ireland is the leading global centre for the domiciling and servicing of Alternative Investments, with 40 per cent of the world’s hedge funds serviced here. The fundamental changes set out by the Central Bank today will further strengthen Ireland’s attractiveness to international managers, building upon the successes to date as we move towards the implementation of the AIFMD.

Ireland’s total non-UCITS fi gures have also experienced considerable growth in recent years, up 35 per cent in 2010, 15 per cent in 2011 and 11 per cent in the first eight months of 2012, according to figures from the Central Bank. Assets in domiciled non-UCITS funds are up from €200 billion in 2010 to €262 billion with the number of funds and sub-funds reaching all time highs.