Asset Management & Investment Funds: Irish Practice Developments - Dec 2021
Asset Management & Investment Funds: Irish Practice Developments - Dec 2021
Irish and Domestic
Some approaching compliance deadlines
21 December 2021 - Central Register of Beneficial Ownership of CFVs- The deadline for filing refreshed beneficial ownership information on the CBI's central register of beneficial ownership for CFVs is 21 December 2021.
31 December 2021 -UCITS Liquidity Risk Management review - The CBI wrote to all Irish authorised UCITS managers about LRM. The CBI has emphasised how seriously it takes the findings of the CSA, which was co-ordinated by ESMA. All Irish authorised UCITS ManCos and SMICs are required to conduct a specific review of their practices, documentation, systems and controls. This review must be documented and must include details of actions taken to address any of the findings in the ESMA public statement on the CSA and the CBI's letter on the topic. This review has to be completed and an action plan discussed and approved by the board of each UCITS ManCo and SMIC by the end of Q4 2021.
31 December 2021 - Corporate Governance - Completion of reviews of board and individual director performance. Under the Irish Funds Corporate Governance Code, the overall board's performance and that of individual members must be reviewed annually. Once every three years a formal documented review and a review of the chairperson must take place. Length of service and ongoing independence of directors, as well as gender diversity at board level, should be considered in line with the CBI's CP86 expectations. Compliance with procedures for dealing with conflicts of interest and the terms of reference of any board committees should be reviewed at least on an annual basis.
31 December 2021 -Anti-Money Laundering/ Combatting the Financing of Terrorism -Designated persons (including UCITS ManCos, self-managed UCITS, AIFMs and internally managed AIFs) should be aware of the regulatory expectation to offer training to their boards on the law relating to AML/CFT on an annual basis (and at such other times as may be appropriate). The CBI expects boards to have in place a defined process for the annual review of AML/CFT policies, including AML/CFT business risk assessments. Where the board has adopted a board level AML/CFT policy, it should ensure that it receives appropriate confirmations from relevant persons.
31 December 2021 - Business Plan/Programme of Activity- UCITS ManCos, self-managed UCITS, AIFMs and internally managed AIFs, where they have not already done so, may need to complete their annual performance review on service providers. FMCs delegating functions must maintain adequate oversight and perform ongoing due diligence on delegates. Accordingly, FMCs should review and confirm their delegate due diligence plans, including making preparations for any necessary on-site visits. FMCs should also obtain annual confirmations from service providers and relevant persons in accordance with their business plan/programme of activity, complete onsite visits with service providers (albeit remotely), ensure adoption of valuation policy and make disclosure in respect of connected party transactions.
31 December 2021 - Fitness & Probity- Where they have not already done so, RFSPs will need to obtain their annual certification from persons performing PCFs (e.g. directors) and CFs (e.g. money laundering reporting officer and company secretary) that they are aware of the F&P standards, agree to continue to abide by those standards and will notify the board if they no longer comply. This forms part of ongoing performance monitoring set out in Section 22 of the guidance on Fitness and Probity Standards.
1 January 2022 -Taxonomy disclosures - Compliance with Level 1 disclosure requirements under the EU Taxonomy Regulation, subject to any forthcoming communication or guidance from EC / ESMA / CBI. For UCITS and AIFs this will mean taxonomy-related disclosures should be made in fund prospectuses and/or supplements for funds classified under SFDR as Article 8 products promoting environmental characteristics and Article 9 funds with an environmental objective. Website disclosure under Article 10 SFDR should also be updated to reflect updated prospectus / supplement disclosure. Funds classified as neither Article 8 or Article 9 products should include a negative taxonomy statement in prospectuses.
31 January 2021/ 28 February 2021 - Fitness & Probity- RFSPs will need to submit their annual PCF Confirmation Return to the CBI. The submission due date for the annual PCF Confirmation Return (for the year ending 31/12/21) for UCITS ManCos and for AIFMs is likely 31 January 2022. The submission due date for investment funds will likely be 28 February 2022. The current annual PCF Confirmation Return and associated reporting date and submission deadline for each entity will be detailed on the ONR system.
The annual PCF confirmation return is made via the ONR system and involves a mandatory declaration to confirm that the CEO or equivalent, has confirmed in writing that:
the RFSP has brought the standards to the attention of all PCFs
the RFSP is satisfied, on reasonable grounds, that all PCFs comply with the standards
the written agreement of all PCFs to abide by the standards has been obtained
all necessary due diligence has occurred
the RFSP will investigate any fitness and probity concerns, take appropriate action and notify the CBI of any action taken without delay
RFSPs must obtain an annual certification from the holders of PCFs that they are aware of the F&P standards, will notify the board if they no longer comply with the standards and agree to continue to abide by those standards. The CBI noted in its “Dear CEO” letter dated 17 November 2020 that it expects the on-going due diligence process for the holders of controlled functions to be updated annually and to extend beyond annual self-declarations, which is a minimum requirement.
31 January 2022-UCITS ManCo and AIFM ownership confirmation - UCITS ManCos and AIFMs must file their annual ownership confirmation by 31 January 2022.
2 February 2022 –CBDF - AIF and UCITS marketing communications must comply with ESMA's Guidelines on marketing communications under CBDF by 2 February 2022.
21 February 2022 - UCITS KIID - A UCITS must update its KIID on an annual basis for each sub-fund/ standalone fund within 35 business days of the end of each calendar year. The annual update of the KIID must be filed no later than 21 February 2022 (where required). The submission deadline for each entity will be detailed on the ONR system. Any update to the KIID filed with the CBI must be translated (as necessary) and filed in any other host jurisdictions where the UCITS is registered to market its shares and must then be uploaded on the UCITS' website. AIFs which have issued a PRIIPs KID must review KIDs regularly, when there is a significant change, and at least annually. The KID must be revised as necessary. Unlike the UCITS KIID, there is no annual refresh deadline. UCITS are currently exempt from the obligation to produce a PRIIPs KID until 1 July 2022. Our November bulletin set out CBI requirements for the filing of KIIDs by UCITS which are implementing ESMA’s Performance Fee Guidelines from 31 December 2021.
28 February 2022 - Fund Profile Return - The annual CBI fund profile return is required for all Irish authorised sub-funds. It is to be prepared for the period up to 31 December 2021, with a submission deadline (via the ONR) of 28 February 2022. The CBI does not anticipate that the fund profile will change from year to year, as changes would most probably reflect changes within the fund's offering documents. Therefore, year-to-year updates to the fund profile are expected to be minimal and reflect significant changes. The CBI has issued guidance and a template.
1 Aug 2022 -UCITS/ AIFMD sustainability disclosures - Requirements under the UCITS Directive and AIFMD to integrate sustainability risks and factors will require updates to fund documentation.
The above list does not cover tax, FATCA or CRS filings, director's compliance statement obligations (which apply to listed UCITS VCCs), diversity reporting obligations (which may apply to listed AIF and UCITS VCCs), ad hoc filings (such as regulatory reports) or filings of annual accounts (and related documents which include annual FDI returns) and semi-annual accounts or other similar returns (which deadlines vary to reflect the particular entity's year-end).
By way of example, the Companies (Accounting) Act 2017 obliges UCITS investment companies and AIF investment companies to file annual accounts with the CRO within eleven months of their financial year-end. The CBI set out the reporting requirements for UCITS management companies and the reporting requirements for AIF management companies.
CBI timeframes for receipt of applications that are seeking a year-end effective date
The Central Bank of Ireland (CBI) has issued timeframes for receipt of applications that are seeking a Christmas or year-end effective date for:
QIAIFs seeking authorisation/approval of sub-funds/noting of documents
CBI to issue Q&A on arrangements in relation to non-discretionary investment advisors providing services to private equity / physical asset QIAIFs
The CBI has advised Irish Funds of its intention to issue a Q&A setting out its expectations where there is an investment advisor providing multiple services to an AIFM to a QIAIF operating in the private equity / physical asset space. The Q&A will set out the role of the AIFM, as well as expectations regarding disclosure and review of such arrangements. The issuing of the Q&A will in particular provide greater regulatory certainty regarding the establishment of ILPs in Ireland.
CBI guidance on operational resilience
On 1 December 2021, the CBI published its latest cross industry guidance on operational resilience. The objective of this guidance is to communicate to industry how to prepare for, respond to, recover and learn from an operational disruption that affects the delivery of critical or important business services.
The guidance identifies three pillars of operational resilience
Identify and prepare. This pillar contains a number of guidelines. These include understanding that the board has ultimate responsibility for the operational resilience of a firm. It is up to the board to identify its critical or important business services, and impact tolerances should be approved for these critical services. Firms are also advised to capture third party dependencies in the mapping of critical or important business services. ICT and cyber resilience strategies are also described as integral to a firm's operational resilience.
Respond and adapt. This pillar focuses on business continuity management, incident management and communication plans. It states that business continuity and incident management should be fully integrated into the overarching operational resilience framework and linked to a firm's risk appetite. Likewise, internal and external crisis communication plans should be fully integrated into a firm's overarching operational resilience framework.
Recover and learn. Lastly, the report states that firms should conduct exercises after business disruption events to consider lessons learned. Firms should also promote an effective culture of learning and continuous improvement as operational resilience evolves.
The publication follows CP140 and is accompanied by a feedback statement.
Extension of COVID-19 interim company law flexibility measures
The Government announced that the interim period of the Companies (Miscellaneous Provisions) (COVID-19) Act 2020 has been extended to 30 April 2022. The statutory instruments are not yet published. Here is the press release. The Act makes temporary amendments to the Companies Act 2014 to address issues arising as a result of COVID-19. These include provision for virtual AGMs.
CBI extends resubmission deadline for beneficial ownership information of CFVs to 21 Dec 2021
A further resubmission of beneficial ownership information will be requested in 2022, to include PPSN information for beneficial owners, for the purpose of verifying the information submitted to the register. Beneficial owners who do not hold a PPS number will be obliged to provide a declaration as to verification of identity.