Executive Summary

On 20 December 2013, Ireland's Minister for Finance, Michael Noonan TD, published the General Scheme of the Irish Collective Asset-management Vehicle (ICAV) Bill 2014 which will allow for the establishment of a new Irish corporate investment fund structure that is tailored to the needs of the global funds industry. The drafting of the bill is to be progressed as a priority within the Irish Government and it is intended that the new structure will minimise the administrative complexity and cost of establishing and maintaining collective investment schemes in Ireland. The new investment fund structure will be exempted from many of the rules applicable to public companies, and will also meet certain U.S. taxation rules, thereby providing increased flexibility and choice of Irish fund vehicle to promoters. Once the legislative process has been completed, it is anticipated that the primary legislation will be enacted towards the end of Q1 2014.


In March 2012, the Irish Minister for Finance announced the development of legislative proposals for a new corporate structure for the Irish investment funds industry. This corporate structure will be called the Irish Collective Asset-management Vehicle ("ICAV") and will exist as an additional legal structure alongside the existing fund structures (including the investment company constituted as a public limited company) so as to offer increased choice of vehicle to fund promoters.

The ICAV will be capable of being authorised by the Central Bank of Ireland as either a UCITS fund under the UCITS Regulations1 or as an alternative investment fund ("AIF") under the AIF Regulations2.

The ICAV will be a corporate entity that will have a similar structure to the SICAV that is used in other European jurisdictions and will operate outside of the Companies Acts in Ireland. A similar vehicle, known as the Open-Ended Investment Company ("OEIC"), has been available as in the UK since 1997. However, the ICAV may be formed as an open-ended, closed-ended or limited liquidity vehicle, thereby providing an alternative to all forms of company currently permitted by the Irish Companies Acts.

The main advantage of the ICAV is that it is expected to meet the U.S. "check the box" taxation rules. The ICAV can elect in its classification under the U.S. "check the box" taxation rules to be treated as a transparent entity for U.S. federal income tax purposes, which will allow U.S. taxable investors to avoid certain adverse tax consequences which would normally apply to "passive foreign investment" companies.

Traditionally Irish funds which have been authorised as public limited companies would be required to comply with many of the rules applicable to non-investment fund type public companies. However, the ICAV structure has been designed specifically to distinguish investment companies from a typical public company, thereby providing additional flexibility to fund promoters. The ICAV structure will also avoid the need for compliance with certain requirements under Irish company law, which will result in reduced administrative obligations and associated costs. These include proposals for the ICAV to issue bonds and debt securities, a more simplified process for mergers with existing funds, and tailored provisions relating to transactions with directors.

The existing corporate fund structure, the public limited company or "plc", will continue to be available to fund promoters who wish to use it, and the adoption of ICAV legislation will not impose any changes for existing plcs. There will be an option for existing plcs to convert to the ICAV structure.


Now that the heads of the ICAV bill have been published, the next step is for the ICAV bill to be debated and approved by the Irish Government as part of its legislative process. It is expected that the ICAV primary legislation will be enacted during Q1 2014.

The legislation establishing the ICAV structure will set out high level principles, with the technical details to follow at the level of regulations which will be enacted by the Minister for Finance. The Central Bank of Ireland will also set down ICAV requirements in the form of regulatory notices, similar to the rules adopted for other fund structures. This will allow for an appropriate level of flexibility to deal with issues which may not be contemplated at the time of drafting the primary legislation.


The ICAV represents an additional structural option to promoters that will complement the existing options available (public limited companies, unit trusts, common contractual funds and investment limited partnerships). The introduction of the ICAV will further enhance Ireland's competitive advantage as an asset management domicile of choice.

A copy of the General Scheme of the Irish Collective Asset-management Vehicle (ICAV) Bill 2014 is available at the following link: http://www.finance.gov.ie/viewdoc.asp?DocID=7956.

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