IRELAND: IFSRA issues update on Madoff Affair

Wednesday January 7 2009

The Irish Financial Regulator (IFSRA) has issued a statement that Collective Investment Schemes in Ireland have confirmed that they have been impacted by the Madoff Affair.

IFSRA confirms that two funds, one UCITS and one non-UCITS, have exposures to Madoff arising from the appointment of Madoff as sub-custodian to the assets of the funds by the Irish trustee. Both funds have suspended dealings with investors. A small number of other funds have indirect exposures arising from investment by the funds in other collective investment funds with exposure to Madoff.

The statement also reminds us of the obligations for safekeeping. All authorised funds must appoint a trustee with responsibility for custody of the assets. Trustees may appoint sub-custodians. However this does not absolve the trustee of responsibility for the custody of the funds’ assets.

IFSRA says it continues to work closely with the Boards of the funds involved and the appointed trustees to clarify the full extent of the exposures to Madoff and the steps that these parties are taking to defend the interests of investors. However, the true extent of the exposure cannot be known until the receiver, appointed by the US Courts, makes their report.

Other European Regulatos have also issued updates on how they plan to deal with the Madoff Affair:

* CSSF states its position on the Madoff Case

* AMF issues recommendations to cope with Madoff scandal