Undertakings in Collective Investments and Transferable Securities ("UCITS")
(i) The Central Bank issues revised UCITS Q&As
During the period 1 January 2018 to 31 March 2018, the Central Bank published the Twenty-Second Edition of the Central Bank UCITS Question & Answers ("Q&A").The revisions to the Q&As comprise:
Question ID 1086: confirms that, with respect to the requirement to disclose whether the benchmark administrator is authorised/registered under the Benchmarks Regulation regime in the prospectus of a UCITS, it is not necessary to include the name of the relevant administrator; and
Question ID 1087: confirms that a UCITS is not required to prepare a PRIIPs KID until 31 December 2019.
A copy of the Twenty-Second Edition of the Central Bank UCITS Q&A can be found here.
(ii) Central Bank outlines new procedure for submission of Risk Management Process Document by UCITS Funds
On 19 January 2018, the Central Bank issued a letter which sets out its new procedure for submission of the risk management processes ("RMPs") by UCITS investment funds.
The main changes are as follows:
As of 19 January 2018, draft RMPs are no longer required by the Central Bank;
In their place, a UCITS must complete the RMP application form. This form, together with the final signed RMP, must be submitted by 12pm on the day of authorisation. Failure to do so will result in the delay of authorisation; and
While the Central Bank will no longer review RMPs in advance of authorisation, ad hoc reviews will be carried out periodically to assess compliance standards.
The letter may be accessed here.
(iii) European Commission Proposals on Cross-Border Distribution of Investment Funds
On 12 March 2018, the European Commission published a legislative proposal amending the UCITS Directive and the AIFMD Directive with respect to the cross-border distribution of collective investment funds. The proposal, more generally, forms part of the development of the Capital Markets Union.
The purpose of the proposed Directive is to improve the transparency of national rules in the area of cross-border distribution and to remove existing barriers to cross-border distribution of funds within the EU in order to make distribution simpler, quicker and cheaper. It also aims to harmonise diverging national rules, thus eliminating gold plating by Member States.
A number of amendments were proposed for the UCITS Directive and the AIFMD Directive, including:
Provision for enhanced requirements for marketing communication, which will harmonise the principles established for such communications, across the EU;
Provision for the definition of pre-marketing and conditions under which an EU AIFM can engage in pre-marketing activities;
Provision for the enhanced transparency of national law and regulations;
The proposal that although UCITS management companies must establish facilities to perform processing of subscription, redemption requests and provide copies of documentation to investors in the relevant Member State, the Member State in question cannot require a UCITS management company to establish a physical presence for such purposes; and
The setting out of new procedures on de-notification (i.e. setting down circumstances in which a fund can be deregistered).
The proposals will now be discussed by the European Parliament and the Council.
The text of the proposal can be accessed here.
(iv) Consultation paper on amendments to the Central Bank UCITS Regulations published
On 29 March 2018, the Central Bank published a consultation paper on amendments to (and consolidation of) the Central Bank UCITS Regulations (the "Regulations"). The Central Bank reviews the Regulations annually, and updates them if necessary. As part of this review, the Central Bank has identified a number of potential amendments which are set out in this paper. Furthermore, it is proposed to consolidate previous amendments into a consolidated version of the Regulations.
The purpose of this paper is to invite feedback from stakeholders on these proposals. The closing date for responses is 29 June 2018.
The paper may be accessed here.
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