The CBI notice confirms that it will permit a UCITS to implement a side-pocket arrangement only for Russian, Belarusian and Ukrainian assets that are directly and/or indirectly impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia’s invasion of Ukraine.
The notice suggests that a side pocket arrangement may be implemented by way of the establishment of a clone fund into which the liquid assets may be transferred. This approach would be seen as a “de-merger” of liquid assets to a new sub-fund, as distinct from a traditional side-pocket arrangement.
A CBI fast track process will be available for the establishment of the clone UCITS fund if certain conditions are met.
ESMA's public statement on the implications of Russia’s invasion of Ukraine on investment fund portfolios (discussed under EU & international developments) is also relevant in this context.
"Further to the Amending Regulations and related Feedback Statement published on 5th April 2022:
The In-Situ Returns process opens on ONR from Wednesday 18 May for a six week period. All firms are to use the below file to submit their returns. Closing date is 30 June 2022."
Regulated financial service providers (RFSPs), which include regulated funds, will need to assess the changes to the list of pre-approval controlled functions (PCFs), discussed here and meet the deadline for impacted in–situ roles by 30 June 2022. The deadline was previously notified as 3 June 2022.
Irish Funds issued useful practical guidance in relation to the assessment of independence in the context of an independent director of funds and mancos.
Please speak with your usual contact on the ALG Asset Management & Investment Funds team for assistance on this topic.
The European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022 (S.I. 262 of 2022) will come into operation on 1 January 2023. They amend the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011). They give effect to Directive (EU) 2021/2261.
From 1 January 2023 UCITS will be obliged to produce a PRIIPs KID for retail investors. These new regulations provide that a UCITS which produces a PRIIPs KID will be regarded as having complied with its obligation to produce a UCITS KIID. For investors other than retail investors, UCITS should continue to draw up UCITS KIID, unless they decide to draw up a PRIIPS KID. The amendments to the UCITS regime provided for in these new regulations aim to overcome duplicating requirements to provide both documents (a UCITS KIID and a PRIIPs KID) for the same financial product.
Extension of COVID-19 interim company law flexibility measures
The 'interim period' of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the Covid Act 2020) has again been extended to 31 December 2022. The Covid Act 2020 makes temporary amendments to the Companies Act 2014 to address issues arising as a result of COVID-19. The extension confirms (amongst other sections) the:
continuation of hybrid and virtual general meetings (sections 6-9, 18 and 25)
the execution of instruments under seal by counterparts provision (section 5)