On 28 March 2014, the Central Bank issued a feedback statement on the consultation paper CP 681 which considers the status of exempt unit trusts ("EUTs") and other investment structures such as real estate investment trusts ("REITs") under AIFMD as these are not currently subject to Central Bank regulation. In particular, the consultation paper sought to address whether EUTs are AIFs under AIFMD and whether EUTs are unit trust schemes within the scope of the UTA. Our previous bulletin which describes the original consultation paper was circulated on 19 July 2013 and can be found here.


The Central Bank advised that providers of EUTs in which pension vehicles and charities invest which have obtained a tax exempt status from the Irish Revenue Commissioners must consider the particular arrangements of their structures in order to ascertain whether they are AIFs. The Central Bank provided the following feedback:

  1. from 1 May 2014, new EUTs made available to beneficiaries in Ireland should seek authorisation from the Central Bank under the UTA if such EUTs are AIFs under AIFMD. Such EUTs will therefore likely be subject to either the retail investor AIF or qualifying investor AIF requirements set out in the Central Bank's AIF Rulebook;
  2. new EUTs should not seek authorisation if the eligible investors are confined to charities and/or regulated occupational pension schemes where the occupational pension scheme has multiple beneficiaries and is not a Small Self-Administered Scheme ("SSAS"). An EUT which is exempt from the requirement to seek an authorisation may, nevertheless, constitute an AIF under AIFMD. In such case, the alternative investment fund manager ("AIFM") must register or be authorised under AIFMD. AIFMs which require authorisation, if they have not already submitted an application to the Central Bank, should "make contact" with the Central Bank by 22 July 2014. This appears to be an acknowledgement by the Central Bank that work by affected AIFMs on their application for authorisation may have been delayed pending publication of the feedback statement;
  3. an EUT which has a tax exemption from the Revenue Commissioners, while allowing PRSAs, ARFs/AMRFs, PRBs and/or RAC schemes to invest, does not meet the requirements for the exemption at 2. and should seek authorisation under the UTA;
  4. an EUT which is explicitly limited by its constitutional document to one ultimate beneficiary should not seek authorisation under the UTA;
  5. existing EUTs which, had they come into existence after 1 May 2014, would have required authorisation under 1. above, must apply for authorisation under the UTA by 1 October 2014, unless they have, in the interim, restructured to avail of one of the exemptions listed at 2. and 4. above; and
  6. EUTs which are closed-ended schemes and the AIFM of which can avail of the grandfathering arrangement set out in AIFMD are recommended not to seek authorisation under the UTA. For these purposes, "closed-ended schemes" can be read to include EUTs which have an appropriate formal plan in place in relation to their termination.

It is questionable whether the guidance at 1. above is correct in all cases. The UTA applies to arrangements which have the purpose or effect of providing facilities for "participation by the public" in the trust's portfolio. The definition of an "AIF" under AIFMD refers to the raising of capital from a "number of investors" and may not necessarily always involve facilities for participation by the public. Further discussion may be needed with the Central Bank on this point.


With regard to REITs, the Central Bank states that it has not encountered a REIT structure in Ireland which it does not believe to be an AIF and therefore considers that the onus remains on any REIT to demonstrate otherwise. This position can be reviewed in the light of future work of the European Securities and Markets Authority (ESMA).


1 Consultation Paper CP 68: "Consultation on types of alternative investment funds under AIFMD and unit trust schemes under the Unit Trusts Act 1990 (including exempt unit trusts, real estate investment trusts, etc.)"

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