Financial Services Regulation & Compliance - Funds September 2018

DOMESTIC

UCITS management companies which manage UCITS that charge performance fees Action required for UCITS charging performance fees.

The Central Bank requires all UCITS management companies which manage UCITS that charge performance fees to:

  • Carry out a review of their existing methodologies in order to be satisfied that:
    • Any performance fees charged comply with Central Bank UCITS Performance Fees Guidance
    • The findings of the Central Bank’s outcome of an inspection into UCITS' performance fees have been considered in the review

The Chairman of the UCITS management company must submit written confirmation to the Central Bank by 30 November 2018 that this review has taken place.  This review was carried out in parallel to, Consultation Paper 119 which proposes that this Guidance will be transitioned into Central Bank UCITS Regulations by the end of 2018.

Central Bank announces increased flexibility in exchange-traded fund (ETF) share classes and retention of daily portfolio disclosure requirement

The Central Bank feedback on Discussion Paper 6 on ETFs was published on 14 September 2018. Key highlights include: 

  • Increased flexibility in ETF share class arrangements introduced in that 
  • Different dealing times will be permitted for hedged and unhedged share classes within the same ETF
  • Investment funds will be permitted to establish both listed and unlisted share classes within a single fund structure. The Central Bank will develop guidance on appropriate disclosure requirements to apply for both types of classes.
  • There will be no change in the requirement to have daily portfolio disclosure at this time. However, we can expect to see ongoing Central Bank dialogue on this topic with stakeholders via domestic, European and international workstreams.

Central Bank Deadlines for Pre-Christmas/Year-End Applications

The Central Bank of Ireland issued its Christmas deadlines for receipt of applications for:

  • fund and sub-fund applications that have pre-Christmas or pre year-end approval deadlines including self-managed/internally managed investment company/ICAV applications
  • approval of post-authorisation amendments that have pre-Christmas or pre year-end approval or noting deadlines.

Irish Funds publishes Q&A document in relation to the implementation Money Market Funds Regulation

Irish Funds published a Q&A document in relation to the implementation of the EU MMF Regulation (MMFR) as it relates to the Irish funds industry. The Q&A will be updated as further questions arise. Irish Real Estate Funds are to file accounts with the Revenue Commissioners annually. The Revenue Commissioners, issued the Investment Undertaking Electronic Account Filing Requirements Regulations 2018 (S.I. No. 368 of 2018) These regulations require Irish Real Estate Funds, as defined by section 739K of the Taxes Consolidation Act 1997, to electronically file financial statements with the Revenue Commissioners annually. The first deadline is 30 January 2019. 

EUROPEAN

ESA publishes letter on transitioning from UCITS KIIDs to PRIIPs KIDs

The ESA published a letter suggesting that legislative changes are needed to avoid a situation where retail investors would have to receive both a PRIIPs KID and UCITS KIID from 1 January 2020. The ESAs also point out that the PRIIPs KID and UCITS KIID may not provide consistent information due to technical difficulties in the methodologies used in the presentation of risks, performance and costs. The ESAs intend to propose targeted amendments to the PRIIPs Delegated Regulation and will launch a public consultation in Q4 2018. 

AIFMD MoUs with third country regulators

The European Securities and Markets Authority (ESMA) issued an updated list of AIFMD Memoranda of Understanding (MoUs) signed by EU National Competent Authorities (NCAs) with third country regulators on 17 September 2018.

For further information please contact a member of the Financial Regulation team.

Date published: 10 October 2018