The Central Bank of Ireland has confirmed that it will, with immediate effect, recognise the ability of authorised alternative investment fund managers ("AIFMs") to passport the services described in Article 6(4) of the Alternative Investment Fund Managers Directive ("AIFMD").
Background
Under the AIFMD, Member States are permitted to authorise AIFMs to provide certain investment services in addition to the collective management of alternative investment funds ("AIFs"), including management of portfolios of investments, investment advice, safekeeping and administration in relation to the shares or units of collective investment undertakings and reception and transmission of orders in relation to financial instruments. These services are regulated in accordance with certain provisions of the Markets in Financial Instruments Directive ("MiFID" - Directive 2004/39/EC) and for the purpose of this note are referred to as "Article 6(4) services". As the provisions of the AIFMD which address the passporting of AIFM activities do not expressly refer to the Article 6(4) services, this has given rise to conflicting interpretations as to whether or not an AIFM is permitted to provide those services on a cross-border basis.
In March 2013, the European Commission published responses to a series of questions received in relation to the AIFMD and, with respect to the query as to applicability of the AIFMD passport regime to Article 6(4) services, the Commission stated that, unlike the UCITS Directive, the AIFM passport only applies to management and marketing activities. The Commission also stated that an AIFM cannot obtain separate authorisation under MiFID.
Comment
The Central Bank's confirmation this week in relation to the passporting of Article 6(4) services under AIFMD follows on from a recent agreement in principle by EU law-makers on rules updating MiFID (MiFID II).
The Central Bank had previously indicated that it would follow the European Commission's interpretation of the AIFMD mentioned above in stating that the services listed in Article 6(4) would not benefit from an EU passport (with the exception that AIFMs also managing UCITS and authorised under the UCITS Directive could offer Article 6(4) services under the UCITS passport). In light of the agreement reached in January 2014 by EU law-makers to amend Article 33 of the AIFMD as part of the agreement in principle reached on updated rules for MiFID II, the Central Bank has now moved forward to confirm that it will, with immediate effect, accept AIFM passport notifications from other national competent authorities where the notification includes Article 6(4) services, and that it will process notifications from Irish authorised AIFMs who advise the Central Bank of their intention to provide Article 6(4) services, for which they have received authorisation.
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