Asset Management & Investment Funds: Irish Practice Developments – February 2024

Deadlines

  • 28 February 2024 - Fitness & Probity - RFSPs, as part of their annual fitness and probity audit due diligence and depending on their compliance calendar, may need to obtain their annual confirmation and agreement from persons performing PCFs (such as directors) and CFs (such as money laundering reporting officer and company secretary) that they have read the code setting out the Fitness & Probity Standards, that they comply with those standards and agree to notify the RFSP without delay if they no longer comply (the wording in the template agreement at Appendix 2 of the Guidance on Fitness and Probity standards has been refined). This forms part of ongoing performance monitoring set out in Section 22 of the Guidance on Fitness and Probity Standards. RFSPs will need to submit their annual PCF confirmation return to the CBI in accordance with new guidance. The first annual submission of confirmation of the completion of the new F&P certification process for each PCF role holder and of confirmation of the completion of the overall certification process for all CFs will relate to the 2024 calendar year and will be required in 2025.
  • 29 February 2024 - CBI Delegation Questionnaire - The CBI issued a delegation questionnaire to all fund management companies on 15 December 2023. The deadline for completion and submission of the questionnaire has been extended to 29 February 2024.
  • 14 March 2024 - MiFID II discussion paper on digitalisation of retail investment services - ESMA is seeking responses to its discussion paper (discussed here) on the digitalisation of retail investment services.
  • 31 March 2024 - Macroprudential measures for GBP Liability Driven Investment Funds - Q1 2024. Following the review of the feedback to CBI CP 157 (discussed here) the CBI is expected to publish a feedback statement and announcement of the final measures in the first quarter of 2024.
  • 29 April 2024 - EMIR - When reporting under EMIR REFIT (from 29 April 2024), counterparties and entities responsible for reporting should take also into account the EMIR standards and related ESMA guidelines and guidance (including Q&A, validation rules and so on, detailed below).
  • 24 May 2024 - Property Funds - Irish regulated funds authorised before 24 November 2022 which invest 50% or more directly or indirectly in Irish property assets (existing property funds) and which are not closed ended must comply with mandatory liquidity requirements by 24 May 2024 (following an 18 month implementation period). The CBI allowed a five-year implementation period, ending 24 November 2027, in respect of leverage limits (60% total debt-to-total assets limit), so as to allow for the gradual and orderly adjustment of leverage in existing property funds, whether open or closed ended or with limited liquidity, albeit that the CBI expects that existing property funds will make any necessary changes to their structure and fund documentation at the earliest possible opportunity, will make early and steady progress towards lower leverage levels over the five-year implementation period and that existing property funds with leverage levels above the limit would not increase the quantum of their debt during the five- year implementation period. The CBI requires that any de-leveraging must be done on a “gradual and orderly manner” and that such de-leveraging should be “significantly progressed” by the end of year three (i.e. November 2025), You can read more here.
  • 27 May 2024 - Own funds requirements for UCITS ManCos and AIFMs authorised for discretionary portfolio management services - New “own funds” capital requirements (introduced on 27 November 2023) will apply to all Irish fund management companies and AIFMs which were authorised by the CBI on or before 27 November 2023 to provide individual portfolio management permissions. Read more here.
  • 28 May 2024 - T+1 - New rules being implemented by the Securities & Exchange Commission in the United States to shorten the standard settlement cycle for most broker-dealer transactions in U.S. securities from T+2 to T+1 take effect, discussed here.
  • 30 June 2024 - SFDR - Fund management companies which are obliged due to their size or which have opted, to report on the principal adverse impacts of investment decisions on sustainability factors under Article 4 of the SFDR must publish a full PAI statement (which for the first time must include historical comparisons against last year’s PAI report) on their website on or before 30 June 2024.
  • 30 June 2024 - Asset Valuation Frameworks - Irish Fund Management Companies are required to review asset valuation frameworks by end Q2 2024, in line with CBI letter to industry discussed here.

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.

CBI Markets Update

The Central Bank of Ireland (CBI) published Issue 1 2024 (centralbank.ie) of its Markets Update which included:

  • Update to Central Bank EMIR webpage regarding EMIR Refit EMIR was revised in the EMIR Regulatory Fitness and Performance programme (EMIR REFIT) which came into force on 17 June 2019. The new reporting requirements under EMIR REFIT come into force from 29 April 2024. Financial Counterparties and Non-Financial-Counterparties should engage with their Report Submitting Entities and their Trade Repositories to ensure that they are in a position to report under the new reporting requirements as of 29 April 2024.  
  • ESAs Opinion on bilateral margining of equity options Opinion on the application of the provisions relating to non-centrally cleared OTC derivatives which are single-stock equity options or index options under Article 38(1) of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 supplementing Regulation (EU) No 648/2012 (EMIR). The effect being that from 4 January 2024 until the entry into force or rejection of the proposed amendment to the Commission Delegated Regulation 2016/2251 or the adoption of any long-term solution in the context of the EMIR revision, whichever occurs first, the competent authorities should not prioritise any supervisory or enforcement action in relation to the requirements set out in Article 11 of Regulation 648/2012 as specified in Articles 9 to 18, points (c), (d) and (f) of Article 19(1), Article 19(3) and Article 23 of Regulation 2016/2251 in respect equity options.
  • ESMA publication of the call for expressions of interest for the new Securities and Markets Stakeholder Group (SMSG) On 7 February 2024, ESMA, is seeking candidates representing the interests of all types of financial markets stakeholders. The Securities and Markets Stakeholder Group (SMSG) is an important body for ESMA. It facilitates our consultation with stakeholders by providing technical advice on ESMA’s policies and activities and brings information on recent market developments to our attention.

Fund Authorisation process updates

The CBI are adjusting submission procedures for fund authorisations. The changes are scheduled for March 2024 and the CBI will update its website accordingly.

For UCITS, RIAIFs or Retail ELTIFs, final documentation showing final dates and figures must be submitted for final clearance by 10am on the business day prior to authorisation. Once cleared, the complete dated, signed documents must be submitted for authorisation by 5pm on the business day prior to authorisation.

UCITS & RIAIFs umbrella applications will move to the CBI Portal (and will no longer be accepted via email). Standalone UCITS/RIAIFs and new Sub-funds of existing UCITS/RIAIF umbrellas will continue to be submitted through ORION.

CBI publishes guidance on the materiality threshold for PCF-16 (branch manager of an outgoing branch)

The Central Bank of Ireland (CBI) has published an information note to provide additional information regarding the recent change (the introduction of a materiality threshold) to the pre-approval controlled function (PCF) role of branch manager of a branch established outside the State (PCF-16).

For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.

Date published: 27 February 2024