knowledge 7 January 2016 |

Central Bank Update on Revised Managerial Functions and Organisational Effectiveness Role

Fund management companies are to have significantly more time to comply with the Central Bank’s revised managerial functions and new organisational effectiveness requirements. While the original compliance deadline was 30 June 2016, the Central Bank has now postponed this deadline by a number of months.

In other developments, the Central Bank has published guidance on UCITS and AIF Umbrella Funds - Cash Accounts and the eleventh edition of the UCITS Q&A as well as a Consultation on Risk Assessment and Capital Planning for Fund Administrators.

Each of these developments is set out in the Central Bank’s latest Markets Update (available here).

Revised Managerial Functions and Organisational Effectiveness Role

As set out in our previous briefing (available here), in June 2015 the Central Bank signalled its intention to streamline the existing managerial functions for both UCITS management companies and Alternative Investment Fund Managers into six separate functions and to introduce a new organisational effectiveness role. The Central Bank also advised that it would publish further guidelines for fund management companies by the end of 2015 and that existing fund management companies would need to update business plans/programmes of activity to reflect the revised managerial functions and the organisational effectiveness role by 30 June 2016. This advice was subsequently reflected in the Central Banks UCITS Regulations.

According to the Central Bank, it now anticipates publishing its further guidelines for public consultation by the end of Quarter 1 2016. Consequently, it is extending the deadline for compliance by existing fund management companies with the revised managerial functions and new organisational effectiveness requirements to at least six months after the completion of the consultation process. Therefore, it is likely that the deadline for compliance by fund management companies authorised before November 2015 will be sometime in Q4 at the earliest.

Guidance on UCITS and AIF Umbrella Funds - Cash Accounts

The Guidance on UCITS and AIF Umbrella Funds - Cash Accounts focuses on operating an umbrella fund cash account for subscriptions and redemptions which are considered as fund assets and are not therefore subject to the Investor Money Regulations. Among other things, the new Guidance sets out investor disclosure requirements which will impact on the prospectus of an Irish authorised investment fund.

UCITS Q&A Eleventh Edition

The latest edition of the UCITS Q&A contains a new ID 1059, which corrects an omission in Regulation 105 of the Central Bank’s UCITS Regulations. Whereas Regulation 105(d) currently provides that internally managed investment companies must comply with Regulation 100 (1) – (6), ID1059 states that they must also comply with Regulation 100(7).

Consultation on Risk Assessment and Capital Planning for Fund Administrators

In this consultation the Central Bank is seeking feedback on its proposal to introduce a risk assessment and capital planning requirement for fund administrators authorised under the Investment Intermediaries Act 1995. The proposed new requirements would broadly align the capital planning requirements applicable to fund administrators with those applicable to MiFID investment firms in Ireland under the Capital Requirements Directive 2013/36 and the Capital Requirements Regulation 575/2013. The consultation closes on 15 March 2016.