The Front Page, Asset Management & Investment Funds: Irish Practice Developments
Some approaching deadlines
- 30 June 2016, Sub-Fund Profiles. Deadline for filing the Investment Funds Annual Sub-Fund Profile Return on the Central Bank's ONR.
- 1 July 2016, Investor Money Regulations. The Investor Money Regulations (IMR) come into effect on 1 July 2016.
- 1 September 2016, Companies Act 2014. The majority of the Companies Act 2014’s provisions commenced on 1 June 2015 (Commencement). If a UCITS management company or AIFM (or s.110 subsidiary) is converting to a CLS, the shareholder(s) of the UCITS ManCo or AIFM (or s. 110 subsidiary) must pass a special resolution to adopt a new constitution, which must be filed with the Irish Companies Office (CRO) by 30 November 2016. If the UCITS ManCo or AIFM (or s. 110 subsidiary) is converting to a DAC, the shareholder(s) of the UCITS ManCo or AIFM (or s. 110 subsidiary) 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.
- 1 November 2016, Redemption Gates. Deadline for existing UCITS to remove provisions whereby redemption requests carried over from a prior dealing day as a result of the application of a gate receive priority. Many UCITS provide for priority rights of redemption for investors on subsequent dealing days in respect of the balance of redemption requests that had been subject to a gate. The Central Bank believe that applying priority to redemption requests which have been subject to a gate may materially prejudice investors, particularly small investors. This is notwithstanding the fact that the original gate would have had to have been applied pro rata to all investors, large and small, who had submitted redemption requests. This change which was discussed in our October 2015 newsalert (which will likely require a change to the UCITS' constitution) should be completed by all UCITS by 1 November 2016.
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.
Irish UCITS Regulations
UCITS V was implemented in ireland by virtue of SI 143 of 2016, the European Union (Undertakings for collective Investment in Transferable Securities) (Amendment) Regulations 2016.
ESMA Guidelines on sound remuneration policies under the UCITS Directive and AIFMD
The European Securities and Markets Authority (ESMA) published its final Guidelines on sound remuneration policies under the UCITS Directive and AIFMD. The UCITS Remuneration Guidelines provide further detail on the requirements under the UCITS Directive for management companies when establishing and applying a remuneration policy for key staff. The UCITS Remuneration Guidelines do not materially vary from the draft contained in the consultation (other than in respect of proportionality as discussed below). They aim to ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure. The UCITS Remuneration Guidelines will apply to UCITS management companies and national competent authorities from 1 January 2017. ESMA also issued a related press release.
The issues concerning proportionality have not yet been finally resolved. In fact, ESMA has written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector and suggested that further legal clarity is needed. ESMA decided did not include in the final UCITS Remuneration Guidelines any guidance on the possibility not to apply certain specific requirements on the pay-out process set out in the UCITS Directive though it did not rule this out. In its letter to the EU Commission ESMA stated that it
"believes that it would be inappropriate for the following fund managers to be subject in all circumstances to the requirements on the pay-out process:
i. smaller fund managers (in terms of balance sheet or size of assets under management);
ii. fund managers with simpler internal organisation or nature of activities; or
iii. fund managers whose scope and complexity of activities is more limited.
ESMA also considers that it would be disproportionate to apply the requirements to relatively small amounts of variable remuneration and to apply certain requirements to certain staff when this would not result in an effective alignment of interests between the staff and the investors in the funds."
ESMA AIFMD Remuneration Guidelines
The amended AIFMD remuneration guidelines will come into force on 1 January 2017. The amendment to the AIFMD guidelines relates to the section of these guidelines dealing with the application of the remuneration rules in a group context and is intended to acknowledge the potential outreach of the CRD rules in a banking group. The current AIFMD Guidelines will not be further amended to bring them into line with the UCITS Guidelines pending clarification on the application of the proportionality principle.
Delegated Regulation supplementing UCITS V on obligations of depositaries
On 24 March 2016, the European Commission Delegated Regulation (EU 2016/438) supplementing the UCITS V Directive (2009/65/EC) with regard to obligations of depositaries was published in the Official Journal of the EU (OJ). The Commission adopted the Delegated Regulation on 17 December 2015. It comes into force on 12 April 2016 (which is 20 days after its publication in the OJ) and will apply from 13 October 2016.
UCITS Infringement reporting form template
ESMA published its UCITS Infringement reporting form template. This is to be used to report a potential or actual infringement of national provisions transposing the UCITS Directive.