The Irish Financial Services Regulatory Authority (the “Financial Regulator”) has confirmed that it is prepared to consider submissions for derogations to its minimum activities rules in circumstances where Irish funds trading in Asia need to produce a net asset value and dealing price ("NAV") in the Asian time zone.  

This recent development stemmed from a meeting between the Financial Regulator and the Irish Funds Industry Association (“IFIA”) to discuss the minimum activities rules and derogations from these provisions. Following on from this, the Financial Regulator has issued a communication confirming the following:  

IRISH FUNDS WHICH NEED TO PRODUCE NAVS IN ASIA  

In the context of the demand for Irish domiciled funds to produce NAVs in the Asian time zone for funds trading in the Asian market, and the challenges faced by the Irish service providers of funds trading in the Asian market in this regard, the Financial Regulator has stated that it is prepared to consider submissions for derogation from UCITS Notice 2 Paragraph 14 and non- UCITS Notice 5 Paragraph 34. These provisions require the calculation of UCITS or non- UCITS NAVs, including the updating/confirmation of the prices of the underlying securities, within the Irish State. The Financial Regulator has confirmed that each submission for a derogation from this rule will be considered on its own merits, with any derogation granted specific to named funds and subject to conditions imposed by the Financial Regulator. The latter includes a timely subsequent check of the relevant NAV in Ireland.  

DISCUSSION TO CONSIDER MOVING FROM A MINIMUM ACTIVITIES REGIME TO A CONTROL-BASED ENVIRONMENT  

With regard to the more general discussion concerning a possible move from the current minimum activities regime to that of a control-based environment, we note that the Financial Regulator has stated that it will undertake an internal review in this regard in the near future, and will discuss the results of such review with the IFIA before commencing formal consultation with the industry. We will keep you updated of any further developments in relation to this.