1 Legal & Regulatory

1.1 UCITS and AIFMD Update


From 1 January 2023 UCITS management companies must produce PRIIPs KIDs for all of their sub-funds distributed to EEA retail investors at share class level. (For more detail see Section 1.6)

On 16 December 2022 the European Securities and Markets Authority ("ESMA") published an updated Q&A on the application of the Alternative Investment Fund Managers Directive 2011/61/EU ("AIFMD"). It added the question of whether managers of special purpose acquisition companies ("SPACs") are subject to AIFMD. EMSA clarifies that, due to the complex structure of SPAC transactions and the significant variations, it needs to be assessed on a case-by-case basis.

On 21 December 2022 ESMA published a final report specifying the information to be provided, and the templates to be used, to inform competent authorities of the cross-border marketing and management of investment funds and the cross-border provision of services by fund managers. This issued following a consultation on the draft implementing technical standards ("ITS") and regulatory technical standards ("RTS") that closed on 9 September 2022. For more information see ESMA Consultation on Notifications for Cross-Border Marketing and Management of Funds.

The RTS specify the information to be provided by management companies and AIFMs wishing to carry out their activities in host Member States. The ITS contain the templates to be used by management companies, UCITS and AIFMs to notify their intention to carry out their activities in host Member States and specify the procedure for the communication of information between competent authorities as regards these notifications. ESMA has submitted the RTS and ITS to the European Commission for adoption.

For more information see ESMA Issues New Guidance and Finalised Rules on EU Cross-Border Activities.

On 7 December 2022 the European Commission published the texts of legislative proposals it has adopted on reforms to EU clearing systems:

  • Proposed regulation amending EMIR, the Capital Requirements Regulation (EU) 575/2013 and the Money Market Funds Regulation (EU) 2017/1131 as regards measures to mitigate excessive exposures to third-country central counterparties ("CCPs") and improve the efficiency of Union clearing markets.
  • Proposed directive amending the UCITS Directive 2009/65/EC, the CRD IV Directive 2013/36/EU and the Investment Firms Directive (EU) 2019/2034 on the treatment of concentration risk towards CCPs and the counterparty risk on centrally cleared derivative transactions.

These proposals are with the European Parliament and the Council for adoption.


On 17 November 2022 the Commission de Surveillance du Secteur Financier ("CSSF") issued a press release on the availability of a standardised model prospectus ("SMU") for new UCITS fund launches. The SMU aims to ease the drafting of the UCITS prospectus and facilitate the CSSF's examination of each new UCITS project. The template is editable, permitting users to tailor the prospectus to the characteristics of the relevant UCITS. It is not a new regulatory requirement nor will it guarantee CSSF approval of the new UCITS. The current approval process remains unchanged.

1.2 Central Bank (Individual Accountability Framework) Bill 2022 – SEAR

The Central Bank (Individual Accountability Framework) Bill 2022 is progressing though the legislative process and is expected to be enacted in Q1 2023.

It will amend current Central Bank legislation and significantly change the regulation and supervision of regulated financial service providers and persons performing controlled functions and pre-approval controlled functions. It introduces a Senior Executive Accountability Regime ("SEAR"), new types of business and conduct standards, and an enhanced fitness and probity ("F&P") regime. The Central Bank of Ireland ("Central Bank") administrative sanctions procedure will also be amended to accommodate the new provisions. The Central Bank will launch a public consultation on the implementation of the Individual Accountability Framework once the Bill is enacted.

For more information see Preparing for SEAR and IAF: Recommended Measures for all Irish Regulated Firms to Consider.

1.3 Sustainable Finance Update

Ireland and Luxembourg

On 1 January 2023 the Level 2 measures (or SFDR Delegated Regulation) under the Sustainable Finance Disclosure Regulation (EU) 2019/2088 ("SFDR") came into effect (see further below). Among other things, these measures will require affected funds to make amendments to their fund documentation, including their prospectuses. The Central Bank announced in September 2022 that it would use a fast-track process. The Central Bank issued a further communication on 4 October 2022 for UCITS and AIF pre-contractual documentation updates on the SFDR Level 2 measures. Filings had to be made no later than 1 December 2022.

Similarly in Luxembourg, the CSSF announced on 27 July 2022 a fast track procedure for the examination and approval of updated pre-contractual documentation on SFDR Level 2 measures and the Taxonomy Regulation (EU) 2020/852 ("Taxonomy Regulation") if certain conditions are satisfied. On 6 September 2022 the CSSF informed financial market participants ("FMPs") that it published a confirmation letter for UCITS and AIFs that must accompany the updated pre-contractual documentation filing. Filings had to be made no later than 31 October 2022, although the CSSF subsequently confirmed that filings not made by this deadline would be processed on a "best efforts" basis.

On 14 November 2022 the Central Bank published a paper on "Sustainable Finance and the Asset Management Sector: Disclosures, Investment Processes & Risk Management" which sets out the findings of a review of investment fund disclosure, the Central Bank's expectations on SFDR and Taxonomy Regulation implementation, and how the Central Bank will supervise those requirements.

On 2 December 2022 the CSSF issued an FAQ on the SFDR to provide additional clarity on various aspects of the SFDR, including minimum investment thresholds and the use of exclusion strategies.

In recent weeks, the CSSF has implemented a separate accelerated visa stamping procedure for UCITS funds that submitted updated prospectuses as part of the original fast track procedure. FMPs may benefit from this procedure provided the following conditions are satisfied:

  • The updated prospectus was filed before 31 October 2022;
  • The updated prospectus has been commented on (at least) once by the CSSF, or the FMP received confirmation that the CSSF had no comments; and
  • Following CSSF comments (if any), the necessary amendments were considered and the prospectus submitted for VISA is compliant with the SFDR Delegated Regulation and the requirements of European Commission Q&As on SFDR, the ESMA supervisory briefing on sustainability risks and disclosures and the clarifications published by the European Supervisory Authorities' "ESAs") (that is, the EBA, EIOPA and ESMA) or CSSF interpretations on the SFDR Delegated Regulation requirements.

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