1 Legal & Regulatory

1.1 AIFMD Update

On 16 July 2013, the European Union (Alternative Investment Fund Managers) Regulations 2013 (No. 257 of 2013) gave effect to Alternative Investment Fund Managers Directive (2011/61/EU) ("AIFMD") in Ireland.

There have been a number of developments over the quarter:

(a) ESMA Q&A

On 9 January 2015, the European Securities and Markets Authority ("ESMA") published an updated version (ESMA/2015/11) of its Q&A on the application of AIFMD. The new Q&A are all grouped under the heading of reporting to national competent authorities under Articles 3, 24 and 42. On 26 March 2015 ESMA published a further update of its Q&A (2015/ESMA/630). The new Q&As are in the following sections:

(i) Section III: Reporting to national competent authorities under Articles 3, 24 and 42.

(ii) Section IV: Notification of alternative investment fund managers ("AIFMs").

(iii) Section VII: Calculation of leverage.

(iv) Section X: Additional own funds.

(v) Section X1: Scope.

(b) Central Bank Q&A

On 23 January 2015, the Central Bank of Ireland ("Central Bank") published a twelfth edition of the AIFMD Q&A. New questions ID1085 (delegation), ID1086-ID1087 (transitional arrangements) and ID1088 (disclosure) are included.

(c) AIF Rulebook

On 6 March 2015, the Central Bank published the latest version of the AIF Rulebook to include reference to Irish Collective Asset-management Vehicles, Ireland's newest corporate fund vehicle as discussed in greater detail below.

(d) Central Bank Application Forms

On 16 March 2015, the Central Bank updated its AIFMD application forms for qualifying investor AIFs and retail investor AIFs for the authorisation of ICAVs.

(e) Information to be provided by NCAs

Under Article 67(3) of AIFMD, national competent authorities ("NCAs") are required to report quarterly to ESMA information on AIFMs that are managing or marketing alternative investment funds ("AIFs") under their supervision, either under the application of the passport regime or under their national regimes. The Commission Delegated Regulation 2015/514 on information to be provided by NCAs to ESMA under AIFMD comes into force on 16 April 2015.

1.2 First Loan Origination QIAIF

Maples and Calder became the first law firm to advise an Irish authorised Qualifying Investor Alternative Investment Fund ("QIAIF") which will originate loans. On 18 September 2014, the Central Bank made revisions to the AIF Rulebook to allow loan origination to occur within QIAIFs in recognition of the demand for non-bank sources of finance. Connect-Ireland Diaspora Loan Fund plc was authorised on 3 March 2015 as the first loan origination QIAIF.

See also our press release, QIAIF Loan Origination: Another First for Maples and Calder

1.3 Irish Collective Asset-Management Vehicle Act 2015

The Irish Collective Asset-management Vehicle Act 2015 was commenced on 12 March 2015. The Central Bank is the registrar for Irish Collective Asset-management Vehicles ("ICAVs") and it has published an information note and a number of application forms for registration and post-registration filings and so on.

ICAVs which are AIFs will be authorised by the Central Bank under the Act. ICAVs which are UCITS will be authorised by the Central Bank under the European Communities (UCITS) Regulations 2011.

The Act allows an Irish plc to convert to ICAV status by way of continuation. In order to do so a filing will be required to be made with the Central Bank including the Irish plc's current and intended constitutional documents together with a statutory declaration of a director confirming, amongst other matters, the solvency of the Irish plc and consenting to the proposed conversion.

On 30 March 2015, the Central Bank authorised the first investment fund established as an ICAV with Maples and Calder acting as leading counsel.

For more information see our client update, ICAV Goes Live in Ireland and Maples and Calder Advises First ICAV Registration with Central Bank of Ireland

1.4 UCITS: Update


The UCITS V Directive 2014/91/EU came into force on 17 September 2014. EU Member States must transpose it into national law by 18 March 2016. ESMA is currently working on technical advice on delegated acts required by UCITS V.

(b) ESMA's Guidelines on ETFs and other UCITS Issues

On 9 January 2015, ESMA published an updated version of its Q&A on its guidelines on exchange traded funds ("ETFs") and other UCITS-related issues (ESMA/2015/12). New questions and answers have been added to the sections of the Q&A dealing with financial derivative instruments (Q&A 5f) and collateral management (Q&A 6n).

A comprehensive set of forms relating to UCITS applications were updated in March 2015.

(c) Central Bank Application Forms for UCITS

On 17 March 2015, the Central Bank updated a range of its application forms for the authorisation of UCITS (including sub-funds) as well as UCITS application form guidelines.

(d) ESMA Q&A on the KIID

On 26 March 2015, ESMA published an updated version of its Q&A on the key investor information document for UCITS (2015/ESMA/631). It includes a new Q&A 4g on the treatment of past performance information in fund mergers. It considers how Article 19(4) of Regulation 583/2010 (the KIID Regulation) should be interpreted where the receiving UCITS is a newly established UCITS with no performance history and is a continuation of the merging UCITS.

It clarifies that the UCITS should use the past performance of the merging UCITS in the KIID of the receiving UCITS if the competent authority of the receiving UCITS reasonably assesses that the merger does not impact the UCITS' performance.

ESMA also states that a change in the investment policy or to the entities involved in the investment management should be interpreted as a factor impacting the performance of the UCITS. It should also be made clear in the KIID of the receiving UCITS that the performance is that of the merging UCITS.

1.5 Companies Act 2014

The Companies Act 2014 is expected to be commenced substantially by statutory instrument with effect from 1 June 2015. It consolidates the existing 17 Companies Acts, which date from 1963 to 2013, into one Act and it also introduces a number of reforms designed to make it easier to operate a company in Ireland.

As a matter of good corporate governance, the constitution of all companies should be reviewed and updated in accordance with the Act. Action will be required in respect of fund management companies regulated by the Central Bank (being private companies limited by shares) guidance on which is due to be provided by the Central Bank in the near future. It is unclear at the moment whether the Central Bank will require that these management companies convert to a designated activity company ("DAC"). However as regulated firms, we consider it would be prudent to convert to a DAC in any case and will provide a further update on developments in this regard in due course.

1.6 Central Bank Enforcement Priorities 2015

On 9 February 2015, the Central Bank published its enforcement priorities for 2015. The Central Bank highlighted the following enforcement priority areas across all sectors:

(i) Prudential requirements;

(ii) Systems and controls;

(iii) Provision of timely, complete and accurate information to the Central Bank;

(iv) Appropriate governance and oversight of outsourced activities;

(v) Anti-money laundering /counter terrorism financing compliance; and

(vi) Fitness and probity obligations.

The Central Bank highlighted the following sectors and the specific requirements set out for the relevant sectors:

(a) Markets:

(i) MiFID conduct of business rules; and

(ii) Client Asset Requirements.

(b) Credit unions: governance.

(c) Consumer protection:

(i) Code of Conduct on Mortgage Arrears;

(ii) Suitability of sales; and

(iii) Fair treatment of customers.

The Central Bank also reiterated its commitment to allocating resources for enforcement actions against low impact PRISM firms.

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