Welcome change to Central Bank rules for Loan Originating Qualifying Investor AIFs

The Central Bank of Ireland (Central Bank) announced its intention to broaden the scope of what a Loan Originating Qualifying Investor AIF (LO-QIAIF) may invest in to include "investment in debt/credit instruments". This change will be effective from 7 March 2018 when the Central Bank will publish a revised AIF Rulebook. This will allow LO-QIAIFs to engage in broader credit related strategies.

LO-QIAIFs are currently prohibited from engaging in activities other than lending and related operations. Following a review of this restriction (and industry submissions), the Central Bank has concluded that it is appropriate to allow LO-QIAIFs to have broader credit focussed strategies. This is a very welcome development as we have seen a number of clients investigate if this was a possibility for LO-QIAIFs.

Next Steps
Given the limited nature of the change, a formal consultation is not being carried out by the Central Bank. Nevertheless, comments can be submitted for consideration, while arrangements are being finalised.

Please speak with your usual contact on the A&L Goodbody Asset Management & Investment Funds team if you have any queries or if you would like to furnish any comments to the Central Bank.

Date published: 8 February 2018