Approaching deadlines

Q3 & Q4 2022

8 July 2022

Deadline for managers of Irish domiciled UCITS to ensure internal investment processes are updated to address the specific criteria set down in the Covered Bonds Directive which must be met by a bond in order to be classified as a "covered bond" under the UCITS framework.

31 July 2022

For funds already authorised/approved as of 30 April 2022, the Fund Profile Return must be submitted to the Central Bank by 31 July 2022. The Return should include information on the Fund's exposures as of 30 April 2022. (See Section 6.1)

1 August 2022

UCITS management companies and AIFMs are required to comply with additional sustainabilityrelated obligations set down in Commission Delegated Directive (EU) 2021/1270 and Commission Delegated Regulation (EU) 2021/1255 respectively.

1 September 2022

Final stage of the phase-in for regulatory initial margin under EMIR takes effect. Counterparties falling within scope1 , including AIFs and UCITS, will be required to comply with the EMIR IM requirements.

9 September 2022

Closing date of ESMA consultation on the information and templates to be provided and used by management companies when informing regulators of their cross-border marketing and management activities under the UCITS Directive and the AIFMD. (See Section 4.1 below)

Date in Q3 TBC2

Each regulated firm having a PRISM Impact Rating of Medium Low (ML) or above (or its equivalent) must submit their Outsourcing Register to the Central Bank via the Online Reporting System (ONRS) using a new template to be made available by the Central Bank. (See Section 6.2).

27 December 2022

Deadline for putting in place new Standard Contractual Clauses (SCCs) to govern transfer of personal data outside of the EEA. (See Section 9.2)

30 December 2022

Deadline for funds which consider principal adverse impacts of investment decisions on sustainability factors to update prospectuses to include disclosures required under Article 7 of the SFDR.

31 December 2022

UCITS/RIAIF Multi-Manager Funds established prior to 20 December 2021 must update their performance fee calculation methodology to align with ESMA's Q&A of July 2021 on Performance Fees in Multi-Manager UCITS/RIAIFs.

31 December 2022

Fund management companies should ensure that any existing Cloud Outsourcing Agreement is updated to comply with ESMA's Guidelines on Outsourcing to Cloud Service Providers.

Q1 2023

1 January 2023

Funds falling within the scope of Article 8 or Article 9 of the SFDR must incorporate and publish an "ESG" annex into their prospectus/fund supplements which satisfy the relevant regulatory technical standards published under the SFDR.

1 January 2023

Where applicable, disclosure obligations in respect of the four remaining environmental objectives listed in Article 9 of the Taxonomy Regulation begin to apply.

1 January 2023

All UCITS funds which are made available to EEA retail clients must prepare and publish a PRIIPS Key Information Document from this date.

28 February 2023

Annual Fund Profile Returns should be filed with the Central Bank by 28/29 February in each year going forward. This Return will require Funds to report information as of 31 December of the previous year. The first such Return will be due 28 February 2023. (See Section 6.1)


2.1 ESMA updates Q&As on application of AIFMD and UCITS Directive: May 2022

On 22 May 2022, ESMA published an updated version of its Q&As on Directive 2011/61/EU (Alternative Investment Fund Managers Directive or AIFMD) and the application of Directive 2009/65/EC (as amended) (UCITS Directive) which updated one Q&A and added another Q&A relating to ESMA's guidelines on performance fees in UCITS and certain types of AIFs. The updated Q&A further clarifies how the performance reference period for a benchmark model performance fee should be re-set while the newly added Q&A confirms that the performance reference period for a hurdle rate model should not be shorter than 5 years.

The Q&As have no relevance for Irish UCITS and Irish retail investor alternative investment funds (RIAIFs) which must apply, under Irish rules, a performance reference period of the whole life of the fund.

The ESMA Q&A on the application of the UCITS Directive can be accessed here.

The ESMA Q&A on the application of the AIFMD can be accessed here.

2.2 ESMA reports on regulatory supervision of costs and fees in UCITS

On 31 May 2022 European Securities and Markets Authority (ESMA) published its final report outlining its findings on the common supervisory action on costs and fees in undertakings for collective investment in transferable securities (UCITS) which was conducted by it and national competent authorities (NCAs) in the course of 2021 (CSA Report). This followed the publication of its supervisory briefing on undue costs in June 2020 (Supervisory Briefing).

The CSA Report presents the main findings arising from the common supervisory action which include the following:

  • All UCITS management companies should have in place policies and procedures allowing a transparent identification and quantification of all costs charged to the relevant fund.
  • An independent analysis of the fee structure should be carried out once it has been established and should avoid an over-reliance on the assessment made by any delegate portfolio manager.
  • Each cost category should be separately assessed and determined in the investor's best interests, using comparison with peer funds.
  • The notion of "undue cost" should primarily be assessed against what should be considered the best interest of the fund and its investors.
  • Adequate policies and procedures should be in place to mitigate conflicts arising from intra-group/related-party transactions.
  • UCITS management companies engaging in EPM techniques must have in place policies and procedures on their use.
  • Pre-contractual disclosures of any UCITS engaging in EPM techniques should be clear and should provide information on the specific arrangements and risks arising therefrom rather than incorporating incomplete or boilerplate disclosures.
  • Instances of UCITS management companies using fee splits without due consideration of either EPM revenues generated, or the amount of revenue deducted by the securities lending agent, to ensure they are in line with fair market rates were uncovered during the common supervisory action. Accordingly, ESMA is of the view that fee-split arrangements merit further investigation and analysis.
  • Investors must be adequately compensated in all cases where they were charged with undue costs or fees, and in cases where calculation errors result in financial detriment for investors.

For further information on the CSA Report, please refer to our briefing on the topic.

A copy of the CSA Report can be accessed here.

A copy of the Supervisory Briefing can be accessed here.

Key Action Points UCITS management companies should review their pricing policies and procedures and use of EPM techniques in light of the findings outlined by ESMA in the CSA Report and take appropriate action to ensure alignment with relevant supervisory expectations outlined in the report

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1. Counterparties in scope are those funds with an aggregate average notional amount (AANA) of €8bn or greater.

2. We expect the Central Bank will soon publish the final template Outsourcing Register on its website. The preliminary timeline for the completion and submission of each regulated firm's Outsourcing Register is likely to be up to 8 weeks following the publication of the Outsourcing Register template.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.