AIFMD II – CBI announces streamlined authorisation for AIFMs managing AIFs that originate loans

The Central Bank of Ireland (CBI) has issued a new authorisation process note. It outlines a streamlined authorisation process for Irish alternative investment fund managers (AIFMs) that currently manage alternative investment funds (AIFs) that originate loans and that need to obtain approval for the new AIFM function of loan origination under AIFMD II.

The CBI’s process is designed to enable AIFMs to meet the requirements of AIFMD II for AIFMs managing AIFs that originate loans once AIFMD II is implemented into Irish law by the implementation deadline of 16 April 2026.

Background

AIFMD II introduces a harmonised framework for loan origination by AIFs and AIFMs across the EU, focusing on micro-prudential risks and investor protection. AIFMD II must be transposed into national law by 16 April 2026, and will apply to AIFs that originate loans, with additional requirements for “Loan Originating AIFs” (LO AIFs) whose main strategy is lending or whose originated loans represent at least 50% of their net asset value.

AIFMD II sets out rules that apply at the level of the AIFM as well as at the level of the AIF that originates loans. AIFMs managing LO AIFs as well as those managing AIFs which intend to originate loans (but do not meet the criteria for LO AIFs) must implement effective policies, procedures and processes for the granting of loans, for assessing credit and for monitoring credit portfolios. Read more in our AIFMD II – A harmonised loan origination framework for private credit funds in the EEA spotlight, which also highlights the five-year transitional period to comply with product rules.

AIFM authorisation requirement

• The origination of loans on behalf of an AIF will become a function that an AIFM may additionally perform in the course of its management of an AIF under Annex I of AIFMD II, which will require that its regulatory permissions reflect that it is authorised to carry out this function.  There are no grandfathering provisions for AIFMs in AIFMD II and so AIFMs must have the requisite authorisation by 16 April 2026 in order to continue to manage AIFs which originate loans.
• The CBI has an existing regulatory framework for the authorisation of loan originating Qualifying Investor AIFs (QIAIFs) managed by an authorised AIFM. The CBI recognises that AIFMs managing loan originating QIAIFs are already subject to high governance and oversight standards which are more prescriptive than those that will be in place following the introduction of AIFMD II and confirms that it will take a proportionate approach to the authorisation of Irish AIFMs managing loan originating QIAIFs, to enable such AIFMs to achieve authorisation to engage in this function by 16 April 2026.

AIFM authorisation process

AIFMs wishing to be authorised to perform loan origination activities should submit an application to the Fund Service Providers authorisations team as soon as possible. This should include:

• A letter seeking authorisation to provide the Annex I function of originating loans on behalf of an AIF.
• A separate letter which should:
  • list the AIFs which originate loans and for which it acts and when these were established
  • outline the list of the policies and procedures it has in place to manage loan origination activity in relation to those funds
  • outline how, in its view, these policies and procedures are aligned with the requirements under AIFMD II for AIFMs performing the function of origination loans on behalf of an AIF
  • advise whether it has experienced any issues in relation to management of the AIFs since its authorisation.

The CBI will engage with the AIFM in relation to any queries concerning the application with a view to authorising the AIFM for this additional function on 16 April 2026.

For more information in relation to AIFMD II, please contact any member of the ALG Asset Management & Investment Funds team.

Date published: 3 February 2026