1. UCITS DEVELOPMENTS

1.1 European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022

On 31 May 2022, the European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022 were published in Iris Oifigiúil and will come into operation on 1 January 2023. The regulations deal with the requirement for UCITS to prepare a PRIIPs KID and for this document to satisfy the requirements under the UCITS Directive to prepare a KIID.

1.2 Central Bank's notice of intention relating to UCITS side-pocketing arrangements

Following ESMA's public statement on the implications of Russia's invasion of Ukraine on investment fund portfolios referred to in section 3.9(c) below which permits the use of side pocket arrangements for AIFs and UCITS, the Central Bank issued a notice of intention relating to the approval process for UCITS side-pocketing arrangements in relation to Russian, Belarusian and Ukrainian assets that are impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia's invasion of Ukraine. This notice of intention states that the Central Bank will permit a UCITS to implement a side pocket arrangement only for Russian, Belarusian and Ukrainian assets that are directly and/or indirectly impacted by the Russian invasion into Ukraine and/or impacted by sanctions that have been imposed as a result of Russia's invasion of Ukraine where the affected securities have become illiquid or untradeable as a result of the Russian invasion and are difficult to value accurately. This arrangement may be implemented by way of establishment of a clone fund into which liquid assets may be transferred.

The notice of intention sets out the process that needs to be followed if a side pocket arrangement is being put in place for a UCITS with advanced notice to the Central Bank and shareholder approval required.

2. CENTRAL BANK UPDATES

2.1 Outsourcing register

The Central Bank has advised that the outsourcing register template has been undergoing testing which has delayed its publication. The Central Bank has confirmed that those required to submit the register to the Central Bank (those with a rating of medium low and above) will have approximately 8 weeks from its publication to complete and file the register with the Central Bank.

2.2 CP86 questionnaire

On 3 June 2022, the Central Bank issued a questionnaire to all fund management companies including self-managed UCITS and AIFs. Responses were required to be submitted to the Central Bank via the ONR by close of business on 24 June 2022.

2.3 Fitness and Probity updates

On 10 May 2022, the Central Bank updated its Fitness and Probity webpage to advise that the in-situ returns process opened on the ONR from Wednesday 18 May for a six week period. All firms are to use the file included on the webpage linked below to submit their returns. The closing date for submission of these returns was 30 June 2022.

https://www.centralbank.ie/regulation/how-we-regulate/fitness-probity/communications-publications

The Central Bank also published guidance on this return which contains practical information on how to submit the return on the ONR.

On 5 April 2022, the Central Bank published a feedback statement on the notice of intention on amendments to the list of PCFs issued in September 2021 together with amending regulations.

PCF Amendment
PCF-2

Being split in two –

 

PCF-2A – Non-Executive Director

PCF-2B – Independent Non-Executive Director

 

PCF-3, PCF-4, PCF-5, PCF-6 and PCF-7

Title of the role being amended to remove the reference to "man"

PCF-3 – Chair of the Board

PCF-4 – Chair of the Audit Committee

PCF-5 – Chair of the Risk Committee

PCF-6 – Chair of the Remuneration Committee

PCF-7 – Chair of the Nomination Committee

PCF-15 Head of Compliance with responsibility for Anti Money Laundering and Counter Terrorist Financing Legislation is being removed
PCF-16 Being expanded to include Branch Managers in nonEEA countries
PCF-31 Head of Investment is being removed
PCF-52 New designation, Head of Anti-Money Laundering and Counter Terrorist Financing Compliance, introduced

As set out in the above table, the PCF-2 designation is being split into PCF-2A – Non-executive director and PCF-2B – Independent non-executive director. All individuals currently occupying PCF-2 roles will be re-designated as PCF-2A and regulated financial service providers ("RFSPs") were required to submit confirmation of any PCF-2B designations to the Central Bank by 30 June 2022. Action is only required in relation to independent directors.

A new PCF role, PCF-52 – Head of Anti-Money Laundering and Counter Terrorist Financing Compliance, is being introduced. However, the Central Bank notes in its feedback statement that this amendment does not, in and of itself, result in any additional or changed requirements regarding the appointment of separate individuals to PCF-12 and PCF-52. The Central Bank also notes that an individual can occupy more than one PCF role e.g. an individual could be listed as PCF-12 and PCF52 and it will be the responsibility of the RFSP to determine if a position represents both PCF roles. PCF-15 – Head of Compliance with responsibility for Anti Money Laundering and Counter Terrorist Financing Legislation is being removed. For those currently holding a PCF-15 designation, this is being end-dated and RFSPs were required to notify the Central Bank of the appropriate PCF designation(s) of the individual i.e. either or both PCF-12 and PCF-52 by 30 June 2022.

PCF-16 has been expanded to branch managers of branches established outside the State and RFSPs caught by the expansion of this function (i.e. those with branches outside of the EEA, including in the UK) were required to submit confirmation of their assessment in respect of in-situ individuals by 30 June 2022.

PCF-31 – Head of Investment is being removed, no action required from RFSPs as those that currently hold PCF-31 designations will automatically be re-designated as PCF-30 – Chief Investment Officer.

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