What has been published by the Central Bank?
On 9 September 2019, the Central Bank of Ireland (Central Bank) published a consultation seeking feedback on a proposed set of rules covering the 'treatment, correction and redress of errors in investment funds'.
The consultation, which is open until 9 December 2019, poses a series of questions to industry on a proposed approach to the development of a regulatory framework in this area. Following this consultation, the Central Bank proposes a further consultation on the draft requirements and guidance which it will prepare, taking account of the outcome of the current process.
Industry, therefore, has an early opportunity to put forward its views ahead of the Central Bank commencing to draft the rules.
What is the impact of this publication by the Central Bank?
Currently, there is no formal Irish regulatory regime for the treatment of errors in investment funds. This consultation, therefore, represents the first step by the Central Bank in the establishment of a set of rules and requirements to govern how funds and their management companies should address fund errors.
The Irish industry body, Irish Funds, has a long-standing guidance paper (Guidance Paper 6), revised on several occasions, which addresses 'Investment Restriction Breaches, Pricing Errors, Compensation & Reporting'. In the absence of a regulatory regime, these guidelines are regularly deferred to by industry participants when addressing the matter of investment fund errors.