Tracker, Financial Services Regulation & Compliance - Funds

DOMESTIC

Irish authorised investment funds may acquire Chinese shares via the Shanghai-Hong Kong Stock Connect programme

The Central Bank now permits Irish authorised investment funds to acquire Chinese shares via the Shanghai-Hong Kong Stock Connect programme (subject to certain conditions).

The sole object of a UCITS ICAV

The Central Bank has clarified its position with regard to consistency between the sole object provisions of the ICAV Act 2015 and the UCITS Regulations. A UCITS ICAV’s instrument of incorporation should include the text set out in section 6(3)(a) of the ICAV Act 2015 and this will also satisfy the requirements of the UCITS Regulations.

QIAIFs investing more than 50% of net assets in an unregulated investment fund

The Central Bank has clarified that a QIAIF availing of the flexibility to invest more than 50% of net assets in an unregulated investment fund must also comply with the requirement to attach the periodic reports of the underlying investment fund to its own periodic reports.

The Central Bank issued a new Q&A on its Guidance on Directors' Time Commitments.

The Central Bank issued a new Q&A on its Guidance on Directors' Time Commitments, clarifying the inclusion of certain time commitments to directorships other than in investment funds or managers.

Consultation on Funding the Costs of Financial Regulation

The Central Bank and the Department of Finance published a joint consultation paper (CP95) entitled Funding the Cost of Financial Regulation. The paper outlines a number of proposed changes to the current funding structure, and considers a variety of topics.  The consultation will close on 25 September 2015.

Irish Funds paper comparing IFRS with FRS 102 as they apply to investment funds

The Financial Reporting Working Group of Irish Funds has prepared a paper that highlights the differences between International Financial Reporting Standards as adopted by the European Union (IFRS) and the recently developed FRS 102 (the New Irish GAAP) as they apply to investment funds. The paper focuses on the main differences between the two GAAPs as they relate to valuation of investments, key disclosures, consolidation and revenue recognition for investment funds. This may assist Irish investment funds in deciding whether to report under IFRS or FRS 102.

EU AND INTERNATIONAL DEVELOPMENTS

ESMA opinion and advice on passporting under AIFMD

ESMA published its advice (to the European Parliament, Council of the EU and European Commission) on the application of the AIFMD passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) and its opinion on the functioning of the passport for EU AIFMs and the national private placement regimes (NPPRs). The Advice and Opinion, required under AIFMD, will now be considered by the European Commission, Parliament and Council. In particular, the Commission will decide whether to activate the third country passport or, as suggested by ESMA,  wait until sufficient evidence is available that they can conclude their analysis of a wider list of third countries.

ESMA consultation on new UCITS V remuneration guidelines and revised AIFMD remuneration guidelines.

ESMA published a consultation paper on guidelines on sound remuneration policies under the UCITS V Directive and the Alternative Investment Fund Managers Directive. Comments can be made on the proposals until 23 October 2015. ESMA aims to publish the final version of the UCITS remuneration guidelines together with a final report by the first quarter of 2016, ahead of the UCITS V transposition deadline of 18 March 2016. The final report is expected to include the final revised AIFMD remuneration guidelines. The draft revised AIFMD guidelines state that they will apply two months after they are published by ESMA.

ESMA Q&A on application of AIFMD

ESMA published an updated Q&A paper on the application of the Alternative Investment Fund Managers Directive. The Q&A has been amended to reflect updated answers about reporting information to national competent authorities and calculating the total value of assets under management.

IOSCO Consultation on International Standards on Fees and Expenses of Investment Funds

IOSCO published a consultation report on Elements of International Regulatory Standards on Fees and Expenses of Investment Funds, which proposes an updated set of common international standards of best practice for the operators of Collective Investment Schemes (CIS) and regulators to consider. This consultation report builds on recommendations made in the 2004.  Comments are invited by Wednesday 23 September 2015.

Key Information Document for PRIIPS

The European Banking Authority, the European Insurance and Occupational Pensions Authority and ESMA issued a Discussion Paper on Risk, Performance Scenarios and Cost Disclosures in Key Information Documents (KIDs) for Packaged Retail and Insurance-based Investment Products (PRIIPs). UCITS will not be obliged to move to producing a PRIIPs KID (which is based on the UCITS KIID) until 2019 at the earliest. Comments are invited by 17 August 2015.

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

Date published: 04 August 2015