On 5 November 2014, the Central Bank of Ireland published the latest editions of its UCITS and AIFMD Q&A documents.


The latest UCITS Q&A document clarifies the application of anti-dilution levies to UCITS master-feeder fund structures.

The UCITS Regulations provide that a master UCITS shall not charge subscription and redemption fees in respect of investments made by the feeder UCITS into the master UCITS.

The Central Bank has clarified that the application of an anti-dilution levy is not considered to fall within the general prohibition on the charging of subscription and redemption fees by a master UCITS provided that:

  • the prospectus includes complete and unambiguous disclosure on the purpose and nature of the charge which may arise; and
  • any such anti-dilution levy is applied at the master UCITS level only.


The latest AIFMD Q&A document clarifies: (i) the requirements applicable to loan originating qualifying investor AIFs; and (ii) the reporting requirements for non-EU AIFMs that have notified the Central Bank of their intention to market AIFs to professional investors by private placement in Ireland but have not commenced marketing.

Clarification Regarding Loan Originating Qualifying Investors AIFs ("LO-QIAIFs")

Following the Central Bank's announcement that it will permit certain qualifying investor AIFs to engage in direct loan origination, the Central Bank has clarified the following points:

  • the levels of seniority and priority of claim are not relevant in determining whether an investment is a loan or not;
  • where an intermediary introduces a borrower to a LO-QIAIF who subsequently lends to that borrower, the LO-QIAIF will still be regarded as the originator of the loan, not the introducer;
  • a LO-QIAIF may hold debt securities where these are used solely for treasury management purposes;
  • a LO-QIAIF may hold equity assets where these securities have been received as a result of a loan workout. There is no particular timeline within which the LO-QIAIF must dispose of these securities. However, in doing so, it should primarily take into account the best interests of its investors;
  • the activities of a LO-QIAIF may be subject to the requirements of the Credit Reporting Act 2013, which provides for the establishment, maintenance and operation by the Central Bank of a mandatory credit reporting database and checking system and applies to the provision of credit where the borrower is resident in Ireland and the credit agreement is governed by Irish law. LO-QIAIFs should consider whether this legislation is applicable to their particular lending activities; and
  • qualifying investor AIFs are permitted to make loans to wholly-owned subsidiaries, established in accordance with the requirements of the Central Bank, without being required to seek authorisation as LO-QIAIFs.

Non-EU AIFMs Marketing AIFs to Professional Investors on a Private Placement Basis in Ireland

With regard to non-EU AIFMs that have notified the Central Bank of their intention to market AIFs by private placement to professional investors in Ireland, the Central Bank has confirmed that such non-EU AIFMs are required to report to the Central Bank in accordance with the Irish rules that implement Article 24 of AIFMD (the so-called "Annex IV" reporting), even where the non-EU AIFM has not yet commenced.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.