IRELAND: Central Bank Publishes Consultation Paper on Implementation of the AIFMD

Thursday November 1 2012

On 30 October 2012, the Central Bank of Ireland published a consultation paper on the implementation of the Alternative Investment Fund Managers Directive. The consultation paper, CP 60, contains a draft revised framework for the regulation of non-UCITS investment funds, referred to as “alternative investment funds” or “AIFs”.

The Central Bank has drafted a revised framework for the regulation of non-UCITS investment funds, which fall to be regulated under domestic legislation. The proposed framework continues to place significant reliance on the regulation of their service providers and, therefore, includes a range of requirements applying to those service providers.

The format for the revised framework is different from that which is currently in place. At the moment, the Central Bank’s requirements are set out in the NU Notices and related Guidance Notes. It is proposed to replace all of these with a single ‘AIF Handbook’. This consultation is seeking views on all aspects of the adequacy of the attached draft AIF Handbook as a framework for the protection of investors in AIFs.

The proposed AIF Handbook would contain the following six chapters:

1. Retail Investor AIF (RIAIF) Requirements;
2. Qualifying Investor AIF (QIAIF) Requirements;
3. AIFM Requirements;
4. AIF Management Company Requirements;
5. Fund Administrator Requirements; and
6. AIF Depositary Requirements.

Draft versions of each of these chapters form part of the Consultation Document. This should constitute a more accessible and readable regulatory framework. Views are sought, in particular, on whether each of these chapters constitutes a proportionate regulatory regime for the relevant entity.

The draft AIF Handbook is composed in a somewhat different manner than the NU Series of Notices and Guidance Notes which it replaces. The aim is to eliminate duplication and texts whose standing is unclear, i.e. which provides guidance for industry on what could be done but which does not clearly constitute a regulatory requirement. There are now very few sections setting out what can be done. The document aims instead to specify certain things which must be done and things which may not be done.

When the consultation process is complete the Central Bank intends to issue an interim AIF Handbook in response. Thereafter, they will conduct a technical examination of the interim AIF Handbook to refine drafting. However, that technical examination will be separate from the policy review that is now being conducted. It is the Central Bank’s intention that interested parties should be able to rely on the interim AIF Handbook that is issued in response to the consultation as a guide to the proposed post-AIFMD regulatory framework.

For more details, please refer to the above link.