Gareth Murphy, Director of Market Supervision at the Central Bank of Ireland (Central Bank) addressed the Irish Funds Annual Conference. Mr Murphy focussed particularly on six areas related to:

  • fund management companies;  
  • directors’ time commitments;  
  • NAV calculation;  
  • the possible extension of the AIFMD 3rd country passport;  
  • capital markets union; and  
  • shadow banking.

Most of these areas are considered in some detail below. The topic of the ESMA Opinion on the possible extension of the AIFM passport to non-EU countries will be of particular interest to some readers. "This opinion (to the European Commission, European Parliament and European Council) must issue by 22 July. ESMA has produced a detailed framework which will ensure that each non-EU country is assessed on a consistent basis. One of the key elements of this framework is that ESMA must have sufficient information of the regulatory regime in the non-EU countries and that there are strong levels of supervisory cooperation with regulators in these jurisdictions. This body of work covers all non-EU countries with whom an MOU [memorandum of understanding] was agreed over the last two years under AIFMD, covering 44 non-EU jurisdictions.  Though it is too early to indicate what the final advice might contain, two points are clear:

  • first, the ESMA advice will be provided on a country-by-country basis as opposed to a blanket advice on the extension of the passport;  
  • second, given the fact that the AIFMD regime has only really been live for 11 months, it is clear that there is insufficient experience of how some non-EU regulatory regimes are likely to support the extension of the AIFMD passport; this is critically important as EU national competent authorities designated as 'member states of reference' will have to rely on these non-EU regulatory regimes in various ways."

As chair of ESMA's Investment Management Standing Committee, Mr Murphy's preference is that "the balance of the ESMA advice prioritises quality over haste".