The Central Bank of Ireland published Consultation Paper 162 (CP162) on September 9, 2025, proposing important amendments to its AIF Rulebook that the private asset industry has been eagerly awaiting. If adopted, these amendments would modernize Ireland's private funds framework, align with AIFMD II and market practice for private funds and provide a framework for Irish private funds to address the growing demand for private equity, private debt, real estate and infrastructure strategies, while maintaining robust investor protection.
Key Changes Include:
- Removal of Subsidiary Restrictions: The restrictive requirements on QIAIFs investing through subsidiary vehicles will be removed, including the requirement for prior Central Bank approval before establishing such subsidiaries, the requirement that the subsidiary be wholly owned and controlled by the QIAIF (including the obligation for QIAIF fund directors to constitute the majority of the board of directors of the subsidiary) and restrictions around contractual arrangements. Going forward, QIAIFs will only need to disclose the use and purpose of intermediary investment vehicles in their prospectus and maintain documented oversight policies.
- Extension of Share Class Flexibility: Flexible rules currently available only in respect of closed‑ended fund share classes will be extended to all QIAIFs, whether open or closed‑ended. This incorporates existing Central Bank guidance into the AIF Rulebook, allowing differentiated participation features, issuance at prices other than NAV, excuse and exclude provisions, stage investing and management participation arrangements. In line with AIFMD, it is also proposed at all unitholders in a QIAIF must simply be treated fairly - with the old requirement that unitholders within a class must also be treated equally being removed.
- Alignment with AIFMD 2.0 on Loan Origination: The domestic Loan Origination QIAIF (L‑QIAIF) framework will be removed entirely, aligning Ireland fully with the new European loan origination framework under AIFMD II.
- Removal of Guarantee Prohibition: The general restriction preventing QIAIFs from acting as guarantors will be removed entirely, recognizing that guarantee arrangements are standard market practice for fund financing (including bridge financing and financing within fund families) and for private equity investments where financing is provided to portfolio companies.
- LMTs: New requirements will be introduced for Liquidity Management Tools in line with AIFMD II, requiring AIFs to disclose their selected tools and the conditions for activation and deactivation. AIFMs will also be able to select additional tools beyond those specified in Annex V of AIFMD, and the Central Bank recommends selecting at least one quantitative‑based tool (such as redemption gates) and at least one anti‑dilution tool (such as swing pricing). Separate sections of the AIF Rulebook devoted to side pocket arrangements for holding illiquid assets have also been removed.
Other Support for Private Asset Strategies
- Capital commitment structures will receive enhanced support through updated minimum investment requirements. Under the proposals, the existing €100,000 minimum can be met through capital commitment models whereby investors commit to the full amount, but the funds are drawn down in stages over time. The list of parties exempt from minimum subscription requirements is expanded to include the AIFM itself, group companies and discretionary or non‑discretionary investment advisors.
- The restrictive two‑year and six‑month initial offer period limitations for certain QIAIFs will be removed and replaced with a requirement to disclose the initial offer period duration in the prospectus.
- Warehousing requirements will be aligned with ELTIF provisions, removing the current requirement that funds pay no more than current market value for warehoused assets, subject to disclosure to investors of the terms of the warehousing arrangement.
The consultation closes on November, 5 2025. Responses should be sent to fundspolicy@centralbank.ie. Get in touch if you would like to discuss the potential impact of these proposals or need support in preparing a response.
Contributors
The authors would like to thank Trainee Solicitor Anna Hughes for her contributions to this OnPoint.
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