Investment Funds Update – Europe: Legal and regulatory updates for the funds industry from the key asset management centres and primary European fund domiciles - Issue 12, 2019: Ireland

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MoUs with the Financial Conduct Authority (FCA) 

The Central Bank of Ireland has agreed a Memorandum of Understanding (MoU) on February 1, 2019 with the Financial Conduct Authority (FCA) of the United Kingdom (UK) on foot of an agreement reached by the European Securities and Markets Authority (ESMA). The MoU forms part of authorities’ preparations for a no-deal Brexit scenario. The MoUs are similar to those already concluded on the exchange of information with many third country supervisory authorities. 

Read: ESMA and EU Securities Regulators Agree No-Deal Brexit MoUs with FCA

Location requirement for Irish Fund Management Companies

The Central Bank published a notice of intention in relation to the location requirement for directors and designated persons of Irish Fund Management Companies on February 4, 2019. 

Following Brexit, on March 30, 2019, the United Kingdom will become a third country. The Central Bank recognizes that there may be considerable disruption in the event that the United Kingdom withdraws from the European Union without ratifying a withdrawal agreement. Should such an eventuality arise, the Central Bank will consider whether the UK is a country to be determined as meeting the Effective Supervision Requirement.

Read: Notice of Intention

Central Bank publishes 31st edition of AIFMD Q&A document 

The Central Bank has issued the 31st edition of the Central Bank AIFMD Q&A, on February 4, 2019 which includes a new Q&A ID 1129, in relation to Irish Qualifying Investor AIFs with UK AIFMs. The Q&A clarifies that a QIAIF will be permitted to designate a UK AIFM as its AIFM. 

QIAIFs migrating to such an arrangement need to assess the impacts arising from the loss of the marketing passport under AIFMD, including notification to investors, amendments to documentation, filings with the Central Bank or other supervisory authorities and any other operational issues. 

Read: AIFMD Q&A

Central Bank statement regarding EMIR issues

The Central Bank has welcomed the recent European Securities and Markets Authority (ESMA) statement on EMIR Refit implementation regarding the clearing and trading obligations for small financial counterparties and the backloading requirement with respect to the reporting obligation. 

The Central Bank has confirmed that, in accordance with the recommendation from ESMA and pending the entry into force of EMIR Refit, the Central Bank will apply its risk-based supervisory powers in the day-to-day enforcement of applicable legislation (i.e. EMIR’s reporting obligation, clearing obligation and MiFIR’s trading obligation) in a proportionate manner. 

Read: ESMA Public Statement on EMIR Refit implementation

Irish Investment Funds Statistics 

The Central Bank released its Investment Fund Statistics for Q3 2018 on December 3, 2018. The Net Asset Value (NAV) of Investment Funds (IFs) resident in Ireland increased by 2.7 percent to €2,055bn during Q3-2018. This increase was comprised of inflows of €29bn and valuation gains of €26bn. Total assets held by Irish IFs increased from €2,380bn in Q2-2018 to €2,444bn in Q3-2018.

Read: Investment Fund Statistics - Q3 2018

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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