Regulatory updates

The Central Bank of Ireland has this week begun a consultation on a redesign of the regulatory regime for non-UCITS funds. The consultation will outline the changes to be introduced in connection with the implementation of the Alternative Investment Fund Managers Directive (‘AIFMD’) in July 2013.

The Central Bank is proposing an approach to non-UCITS regulation which aims to turn the Irish regulations into a proportionate investment funds framework which accommodates investors across a wide spectrum of capability and sophistication.

The changes proposed will place the newly titled Qualifying Investor Alternative Investment Fund (QIAIF) and for retail investors, the Retail Investor Alternative Investment Fund (“RIAIF”), as the fund products of choice for managers/investors and other stakeholders in a post AIFMD world.

Key proposals include:

• Removal of the current Promoter regime taking into account the requirements and obligations on AIFMs. This is a very welcome development for overseas managers looking to create funds in Ireland and will ensure optimal reliance on EU regulatory requirements without the need for domestic “gold-plating”.
• Certain changes to loosen the current investment constraints on retail non-UCITS funds. A range of investment limits which currently apply to retail non-UCITS funds will be changed so as to allow retail investors to use Ireland’s new non-UCITS regime to invest in unlisted securities, derivatives and other asset classes to an extent which has not been possible for such investors up to now.
• The removal of some burdensome regulations on what will be formerly known as the QIF and now QIAIF.

These proposals are published in a draft ‘AIF Handbook’ which will consolidate all the Central Bank’s current rules into a single rulebook for non-UCITS funds, and which will also include a number of major changes to its current approach.

The consultation process is particularly short given the pressing deadline of AIFMD, with responses requested by 11 December 2012.

Killian Buckley, a member in Kinetic Partner’s Dublin office sits on the Irish industry taskforce dealing with the implementation of AIFMD. Please contact Killian Buckley if you have any further questions.