Updates to the Irish Collective Asset-management Vehicles Act 2015 (‘ICAV Act’)
To secure Ireland’s competitiveness in international financial services, the Investment Limited Partnerships (Amendment) Act ('2020 Act') has made several improvements to the ICAV Act.
These improvements enhance the efficiency of the ICAV structure and align the ICAV Act with certain provisions of the Companies Act 2014.
Updates to the ICAV Act
The amendments to the ICAV Act are found in Part 3 of the 2020 Act. They include the following.
Updates to Written Resolutions
- The provisions with respect to written resolutions have been aligned with the equivalent provisions under the Companies Act 2014.
- The ICAV Act now provides that where unanimous written resolutions are not contemporaneously signed, the members must be notified that the resolution has been passed within 21 days after the date of delivery to the ICAV of the resolution documents.
- For written resolutions that are not unanimous but are passed by the requisite majority (simple majority of total voting right for an ordinary resolution and at least 75% of total voting rights for a special resolution), the ICAV must notify every member, within 3 days after the date of delivery to it of the resolution documents, that:
- the resolution has been signed by the requisite majority of members
- state the date that the resolution will be deemed to have been passed
- The Act provides for when the effective date is for written resolutions that are not unanimous.
Updates to UCITS Objects Clause
The provisions with respect to the principal objects clause of ICAVs authorised as UCITS have been aligned with the requirements of the UCITS regime.
The sole object of a UCITS as set out in its Instrument of Incorporation needs to reflect the following:
'the collective investment in either or both of
- transferable securities; or
- other liquid financial assets referred to in Regulation 68 of the UCITS Regulations
of capital raised from the public and which operate on the principle of risk-spreading….'
To date the ICAV Act required different wording be used. So, any ICAV authorised before 1 February 2021 will need to update its principal objects to reflect the UCITS requirement. Helpfully, such ICAVs have up to 1 February 2022 to do so.
Updates to the Use of a Common Seal and Powers of Attorney:
- The provisions permitting the use of the common seal and the use of powers of attorney for the signing of deeds have been clarified to make specific reference to the use of powers of attorney and separately, to clarify who has to countersign the ICAV seal, if one is used.
- Where the seal is used1, the instrument needs to be signed by:
- two directors
- a director and the Secretary of the ICAV; or
- a director and a person appointed by the directors for the purpose of signing
Updates to Intra-Group Transactions
- The provisions of the Act relating to the prohibition of loans to related parties have been clarified to confirm that they do not prohibit loans and similar transactions between an ICAV and its subsidiaries.
For further details on the ICAV structure, see our InFocus paper on ICAVs.
See our webpage on Fund Structures for further detail on Unit Trusts, Common Contractual Funds (CCFs), Investment Limited Partnerships (ILPs) and Variable Capital Companies (VCCs).
For more information on this please contact Nollaig Greene, Ann Shiels, Knowledge Lawyers, or your usual contact on the Asset Management & Investment Funds team.
Date published: 22 March 2021
1 The ICAV Act also allows for execution of documents as deeds without the use of a seal.