Following the launch of the Shanghai-Hong Kong Stock Connect programme ("Stock Connect") on 17th November 2014, the Central Bank of Ireland (the "Central Bank") has been engaging with Irish funds industry participants regarding certain key aspects of the operation of Stock Connect and the ability of Irish authorised investment funds to acquire shares through Stock Connect.
The Central Bank has focused in particular on the ability of depositaries to provide for the safe-keeping of assets acquired pursuant to Stock Connect in a way that complies with the UCITS and AIFM Regulations, paying particular attention to UCITS and AIFM provisions relating to safe-keeping of assets, beneficial ownership, segregation and reconciliation arrangements and monitoring of sub-custodians.
The Central Bank has now indicated that, although there are some further points of clarification required from industry participants, it will now consider individual submissions from Irish authorised investment funds who wish to participate in Stock Connect. The Central Bank has, however, emphasised that - submissions will be considered on a case by case basis and will, in the first instance, be subject to the depositary of the relevant investment fund satisfying the Central Bank that it can provide for the safe-keeping of assets acquired pursuant to Stock Connect in accordance with the UCITS Regulations or AIFM Regulations, as applicable.
At Dillon Eustace we are assisting clients with submissions to the Central Bank and we would be delighted to speak with managers who are considering participating in Stock Connect to provide further insight and assistance.
Our previous briefings on Stock Connect can be found at the following links:
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