The Front Page, Asset Management & Investment Funds: Irish Practice Developments
The Front Page, Asset Management & Investment Funds: Irish Practice Developments
Some Approaching Deadlines
1 November 2015, Central Bank UCITS Regulations (detailed below) commence on 1 November 2015 and the existing UCITS Notices fall away.
1 November 2015, UCITS Derogations- where a UCITS has a derogation in place from the Central Bank under the UCITS Notices, clients will need to assess whether this derogation is covered by the new Central Bank UCITS Regulations or whether a new derogation should be sought. Any new derogation should be in place before 1 November 2015.
31 December 2015, Corporate Governance – completion of reviews of board and individual director performance. Under the Irish Funds Corporate Governance Code, the chairperson, board membership and the performance of individual members and the board must be reviewed formally every three years. As the Code was adopted by most boards in 2012, the three year review is approaching for many boards.
31 December 2015, Fitness & Probity - collective investment schemes, management companies and other regulated financial service providers (RFSPs), where they have not already done so, will need to obtain their annual certification from persons performing PCFs (e.g. directors) and CFs (e.g. Money Laundering Reporting Officer (MLRO) and Company Secretary) that they are aware of the Fitness and Probity standards, agree to continue to abide by those standards and will notify the RFSP 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.
31 December 2015, Anti-Money Laundering/ Counter Terrorist Financing (AML/CTF) - collective investment schemes and management companies should be aware of the regulatory expectation to offer training to their boards on the law relating to AML/CTF on an annual basis (and at such other times as may be appropriate). Boards should also ensure that they have considered whether to adopt a board level AML/CTF policy and where the board has adopted such a policy, that it receives appropriate confirmations from relevant persons and that it is subject to periodic review.
31 December 2015, Business Plan/ Programme of Activity - UCITS management companies, UCITS Self-Managed Investment Companies, AIFMs and Internally Managed AIFs, where they have not already done so, may need to obtain annual confirmations from service providers and relevant persons in accordance with their business plans/ programmes of activity, complete onsite visits with service providers, ensure adoption of valuation policy and make disclosure in respect of connected parties transactions.
1 Jan 2016, from this date, authorised investment funds with individual directors triggering the directors’ time commitment risk indicator will receive priority consideration for inclusion in CBI thematic reviews where board effectiveness is being assessed.
31 January 2016, Fitness & Probity – Deadline for filing the Annual PCF Confirmation Return (to 31/12/15) for Fund Service Providers (including AIFMs, and UCITS Management Companies).
19 February 2016, UCITS KIID - Annual update of the key investor information document (KIID) must be filed no later than this date (where required). Any update to the KIID filed with the Central Bank must be translated (as necessary) and filed in any other host jurisdictions where the UCITS is registered to market its shares and uploaded on the UCITS' website.
28 February 2016, Fitness & Probity – Deadline for filing the Annual PCF Confirmation Return (to 31/12/14) for Funds.
18 March 2016, UCITS V implementation deadline. UCITS should have in place UCITS V compliant depositary and sub-depositary agreements, whistleblowing policies and procedures, prospectus updates and remuneration policies and procedures.
30 June 2016, UCITS Management Companies, UCITS Self-Managed Investment Companies AIFMs and internally managed AIFs are expected to update business plans/programmes of activity to reflect the revised managerial functions, the organisational effectiveness role, ongoing control and operational matters by this date, in line with CP 86. Moreover, the Central Bank expects their boards to review their current board composition, taking into account the Time Commitments Guidance.
1 September 2016; Companies Act 2015. The bulk of the Companies Act 2014’s provisions commenced on 1 June 2015 (Commencement). If a UCITS ManCo or AIFM is converting to a CLS, the shareholder(s) of the UCITS ManCo or AIFM must pass a special resolution to adopt a new constitution, which must be filed with the Irish Companies Office (CRO) by 1 December 2016. If the UCITS ManCo or AIFM is converting to a DAC, the shareholder(s) of the UCITS ManCo or AIFM must pass an ordinary resolution resolving that the company be registered as a DAC by 1 September 2016. Variable Capital Companies may choose to update their Memorandum and Articles of Association to reflect the provisions of the Companies Act 2014 and other regulatory changes when planning their Annual General Meetings. Please see our In Focus document for more detail.
This list does not cover ad hoc filings (such as regulatory reports) or filings of annual accounts (and related documents which include annual FDI Return) and semi-annual accounts because these dates will vary to reflect the particular year end.
New Central Bank UCITS Regulations, Guidance and Q&A, AIFMD Q&A and Investor Money Regulations Q&A
As noted in our Front Page newsalert, the Central Bank of Ireland (Central Bank) published new Central Bank UCITS Regulations which will commence on 1 November 2015 (Central Bank UCITS Regulations). The Central Bank UCITS Regulations supplement existing legislative requirements, in particular the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011. For the most part, the rules in the Central Bank UCITS Regulations are the same as the conditions set out in the Central Bank’s UCITS Notices but a small number of policy changes are included. The Central Bank has also restructured its UCITS guidance to reflect the publication of the Central Bank UCITS Regulations, as detailed below.
The Central Bank issued a markets update on 5 October 2015 which includes:
The restructured UCITS guidance which reflects the publication of the CB UCITS Regulations and will also come into effect on 1 November 2015. The current UCITS guidance in the form of Guidance Notes) will remain on the Central Bank website until that date and will be removed thereafter.
UCITS Q&A Seventh Edition. The Q&A contains new questions ID 1018 to 1046 reflect the introduction of the CB UCITS Regulations 2015, questions ID 1007 and ID1009 are no longer relevant and have been deleted and question ID 1008 has been re-written to reference the CB UCITS Regulations 2015.
Q&A 1047 concerns existing derogations or waivers from the UCITS Notices These fall away from 1 November 2015 and applications to receive a similar waiver should be received by the Central Bank before 1 November 2015.
Q&A 1048 concerns the timing of revisions to a UCITS prospectus. Technical amendments, for example to replace references to the UCITS Notices with references to the Central Bank UCITS Regulations, should take place when the prospectus is next updated. Where text needs to be updated to reflect the text of the Central Bank UCITS Regulations or where the Central Bank UCITS Regulations have refined rules contained in the UCITS Notices (e.g. connected party transactions), that can be treated as a technical update which can be incorporated when the prospectus is next updated. Regulation 124(1) of the Central Bank UCITS Regulations grants a transitional period for prospectus amendments to include disclosures where a responsible person proposes, on behalf of a UCITS, to take short positions. These amendments must be made when the prospectus is next updated. Where a UCITS is planning to take advantage of a new flexibility introduced by the Central Bank UCITS Regulations and where the previous position is set out in the UCITS prospectus (e.g. collateral diversification), the prospectus must be updated before the responsible person, on behalf of a UCITS, starts to take advantage of the new flexibility.
The Central Bank have also received a number of other queries on the Central Bank UCITS Regulations, mostly relating to interpretation. It is expected that these will be addressed separately in a further UCITS Q&A update in early November.
Address by Gareth Murphy, Central Bank Director of Markets Supervision
On 9 October 2015, Gareth Murphy, Central Bank Director of Markets Supervision spoke at the Irish Funds Symposium. Mr Murphy spoke on the themes of regulatory reporting and systemic oversight.
Mr Murphy began his address by speaking of fund directors' time commitments and noted that "investment fund regulation does not stop at umbrella fund level but applies also at sub-fund (or compartment) level. (This is to be distinguished from corporate governance requirements which mostly sit at the level of the umbrella board.)" Mr Murphy pointed out that "the Central Bank expects directors to consider carefully their time commitments to each and every sub-fund and to set aside sufficient time consistent with the nature of the sub-fund in order that they can meet their obligations."
Mr Murphy noted that "As part of the Central Bank's themed supervisory work next year, we will take the time to do a detailed review of the quality of board discussions by focussing our attention on those fund complexes which have directors with extensive sub-fund responsibilities."