On 8 October 2018, the Central Bank of Ireland (Central Bank) introduced:

  • a self-certification regime in respect of (most) financial indices used by UCITS for investment or efficient portfolio management purposes
  • a pre-approval submission to the Central Bank will be required in limited circumstances
  • no certification is required where an index is used solely as a performance benchmark.

The changes are reflected in updated guidance on the use of financial indices by UCITS (the Guidance).


The Central Bank requires that a UCITS assess each financial index that it intends to use to ensure that it complies with all relevant regulatory requirements. 

A Responsible Person (in the context of UCITS) is a director of the UCITS ManCo, or Self- Managed Investment Company (SMIC), as the case may be.

A Responsible Person must certify to the Central Bank that the index is a financial index which complies with the requirements of the UCITS Regulations 2011, the Central Bank UCITS Regulations 2015 and the Guidance (the Regulatory Requirements). The certification is filed with the Central Bank when the UCITS seeks authorisation (or approval of an additional sub-fund) from the Central Bank. The form of the certification is prescribed in the Guidance. 

When is an Index submission required?

An index submission is required to the Central Bank for pre- approval where the UCITS proposes to use a financial index, where one constituent issuer has a weighting in excess of the 20% limit (up to a maximum of up to 35%). This submission must be made at the time of the application for authorisation, or approval of an additional subfund, or by way of post authorisation submission for previously authorised UCITS/ approved sub-funds. The submission must include evidence as to why this is justified by exceptional market conditions.

 Central Bank quality assessments

The Central Bank may periodically conduct quality assessments on randomly selected financial indices used by UCITS to ensure that they comply with Regulatory Requirements. As part of these assessments the Central Bank will request a written submission together with supporting documentation from the Responsible Person demonstrating that the financial index meets Regulatory Requirements. This information must be provided immediately upon request. 

The Central Bank will expect a Responsible Person (at least) to provide  

  • the rationale as to how the proposed index achieves the objective of being a benchmark for the market to which it refers
  • the methodology used to construct the index (which should be adequately described and include data on constituent selection criteria, constituent price collection procedures, asset allocation rules and guidelines for altering and re-balancing the index) 
  • information on index constituents and their current as well as historic weights 
  • details as to how the index calculation methodology is verified 
  • information on any fees embedded in the index
  • any technical and marketing documents produced by the index sponsor.

The obligation to carry out the due diligence on a proposed index has not changed but the obligation on the Responsible Person to provide a written submission together with supporting documentation immediately upon request is likely to cause UCITS and their ManCos to review their practices to ensure that they are in a position to meet this obligation. 

Recommended Next Steps

A UCITS ManCo or SMIC intending to use a financial index should: 

  • adopt procedures to be followed in the assessment of any proposed index (to ensure that the Regulatory Requirements are met) 
  • complete a documented assessment of the proposed financial index to determine whether it meets the Regulatory Requirements
  • complete the certification 
  • ensure that a copy of the certification, together with the underlying assessment and any supporting documentation (evidencing how an index complies with regulatory criteria) is available to the Central Bank on request.