Enhancements to Qualifying Investor Funds Following consultations with the Funds Industry in Ireland, the Financial Regulator has recently introduced amendments to Qualifying Investor Funds (QIFs) which should further enhance the attractiveness of this fund structure. In short, QIFs are funds that can be marketed to certain qualifying investors, the minimum initial subscription for which is €250,000. A key feature of a QIF is its ability to be authorised within 24 hours of making a fully completed filing with the Financial Regulator.
The following is a summary of the main amendments brought about to the QIF regime:
- A QIF established as an investment company or as a limited partnership is no longer required by the Financial Regulator to publish semi-annual accounts.
- The Financial Regulator has clarified the risk diversification requirements for QIFs authorised under Part XIII of the Companies Act 1990 and confirmed that it is the responsibility of the directors of the investment company to ensure compliance with these requirements.
- A QIF, which does not have as its principal objective, the investment in a single collective investment scheme, is not required to comply with disclosure requirements applicable to feeder fund schemes.
- A QIF may now invest up to a maximum of 50% (previously 40%) of its net assets in another regulated or unregulated collective investment scheme without being regarded as a feeder-type investment.
- A QIF may now issue notes on a private basis to lending institutions to facilitate financing.
- A QIF with limited liquidity is no longer required to disclose this status on the cover of its prospectus but may include a reference to "open-ended with limited liquidity.
- A QIF can now purchase assets pursuant to a warehousing arrangement at cost price, instead of at market value, where the cost price is lower than the current market value.
- The Financial Regulator has provided additional information in relation to the derogation process for QIF feeder schemes that propose to invest in unregulated collective investment schemes.
- A QIF may issue a separate prospectus for a share class within a QIF or within a sub-fund of an umbrella QIF.