IRELAND: IFSRA consultation on Management Fees

Friday June 23 2006

IFSRA, the Irish Regulator has published CP 19 – Annual Management Fees within Authorised Collective Investment Schemes.

Collective investment schemes (CIS) are permitted to charge annual management fees provided that the constitutional document prescribes the method of calculation of such remuneration. Generally these fees are calculated as a percentage of the net asset value of the CIS. The Financial Regulator has been asked to permit annual management fees where these fees are calculated based on the initial issue price of units.

The Financial Regulator is reluctant to permit this type of charge on the basis that a decrease in the value of the units could result in a disproportionate charge for investors. Management fees should be based on the amount of assets under management. While the Financial Regulator does not seek to impose conditions on the level of fees charged to CIS, it has concerns regarding fee structures which may not be appropriate in the context of retail investors.

Comments should be submitted by 28 July 2006.