On 22 November 2024, the Department of Finance ("DoF") launched its public consultation on the exercise of the national discretions in Directive (EU) 2024/927 amending AIFMD (2011/61/EU) and the UCITS Directive (2009/65/EC), as regards delegation arrangements, liquidity risk management, supervisory reporting, the provision of depositary and custody services and loan origination by alternative investment funds ("AIFMD II").
AIFMD II entered into force on 15 April 2024 and will need to be transposed by EU member states into their national law by 16 April 2026, at the latest.
While the majority of the provisions in AIFMD II will be transposed on a fully harmonised basis, there are a number of national discretions where each member state has capacity to decide on the application of the provision in question. Accordingly, the DoF has invited interested parties to make submissions in relation to the exercise of the following national discretions in AIFMD II, which will be taken into consideration when deciding how best to transpose AIFMD II into Irish law. The matters subject to national discretion relate to:
- extending the list of ancillary activities and services that may be provided by an external alternative investment fund manager ("AIFM") and by a UCITS management company;
- prohibiting alternative investment funds ("AIFs") that originate loans from granting loans to consumers in Ireland; and
- permitting the national competent authority to allow the appointment of a depositary established in another member state, on receipt of a reasoned request from an AIFM and subject to strict conditions.
The DoF will also welcome views in relation to other elements of the transposition. The consultation period will run until 17 January 2025.
In a recent speech delivered at the Irish Funds annual UK symposium, the Central Bank of Ireland (the "Central Bank") outlined how it is working alongside the DoF in order to update the current domestic regulatory framework to support the transposition of AIFMD II, including assessing the knock-on impacts on the Central Bank's AIF Rulebook and the Central Bank UCITS Regulations.
The entry into force of AIFMD II marks a significant milestone for the European asset management industry. Our latest advisory series considers a number of key changes for the asset management industry introduced by AIFMD II:
- AIFMD II 101: Part 1 - Loan Origination;
- AIFMD II 101: Part 2 – A new EU Framework for Liquidity Management Tools; and
- AIFMD II 101: Part 3 - Delegation, authorisation and reporting
Please also refer to our other recent AIFMD II publications "AIFMD II – A closer look" and "AIFMD II: Timeline to Implementation".
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.
