The Central Bank of Ireland ("Central Bank") has confirmed in a notice published on 16 May 2022 that side-pocketing arrangements will be permitted only for Russian, Belarussian or Ukrainian assets that are either directly or indirectly impacted by either Russia's invasion of Ukraine or the sanctions imposed as a result of the invasion (the "Affected Securities"). The Central Bank's notice was published on the same date that the European Securities and Markets Authority ("ESMA") issued a public statement on action so manage the impact of the Russian invasion of Ukraine on investment fund portfolios. The Central Bank has clarified hat side pocketing of UCITS assets is only available in the context of Affected Securities and should not be interpreted as creating a precedent by the Central Bank for any other current or future situations.
The Central Bank notes that, due to the specific and exceptional market conditions brought about by the war in Ukraine, certain asset classes are subject to pronounced devaluation and / or their ability to trade has been wholly impaired.
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