On 8 November 2013, the Central Bank of Ireland (the “Central Bank”) clarified the approach that will be taken to Irish special purpose vehicles (Section 110 companies) in light of the implementation of the Alternative Investment Fund Managers Directive (the AIFMD). In particular, the Central Bank has confirmed that provided special purpose vehicles fall under one of two categories, discussed further below, there will be no requirement for them to appoint an Alternative Investment Fund Manager (AIFM) in accordance with the provisions of the AIFMD.

This clarification is a welcome development for those in the aviation industry and confirms that the majority of special purpose vehicles established in Ireland as Section 110 companies will not come within the scope of the AIFMD.

This clarification was provided by the Central Bank in the fifth edition of its AIFMD Questions and Answers document (the AIFMD   Q&A”).The  AIFMD Q&A was updated on 13 December 2013. Please see

this article for an outline of these further changes. The AIFMD Q&A sets out answers to queries that are likely to arise during the implementation of the AIFMD across Europe.

The AIFMD entered into force on 22 July 2013 with the aim of establishing a harmonised regulatory framework for all types of alternative investment funds, including hedge funds and private equity funds. It also introduced a streamlined regime for the promotion of such funds to professional investors. However, rather than regulating the funds themselves, the AIFMD targets the fund managers.

A key requirement under the provisions of the AIFMD is that all Alternative Investment Funds must have a designated AIFM with responsibility for portfolio and risk management. However, the AIFMD provides an exemption from its scope under  Article 2(3) (g) for “securitisation special purpose vehicles”.

The new AIFMD Q&A provides that, as part of a transitional arrangement pending the issuance of guidance by the European Securities and Markets Authority (“ESMA”), the Central Bank will not require:

  • registered Financial Vehicle Corporations, within the meaning of Article 1(2) of Regulation (EC) No. 24/2009 of the European Central Bank concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions; or
  • financial vehicles engaged solely in activities where economic participation is by way of debt or other corresponding instruments which do not provide ownership rights in the financial vehicle as are provided by the sale of units or shares

to seek authorisation with the Central Bank as an AIFM, or to appoint an AIFM.

While the Central Bank reserves the right to revise this position with a further issue of the AIFMD Q&A, the Central Bank has  stated that it does not intend to do this while ESMA continues its     work on this matter.

Any queries relating to securitisation and the AIFMD may be submitted by email to the Central Bank for consideration.