Ireland getting “ELTIF-ready”

Earlier this year, in response to restrained growth in the European long-term investment fund (“ELTIF”) market, the European Union adopted a revised regulatory framework for ELTIFs¹ (also known as “ELTIF 2.0”), which is to apply from 10 January 2024. Now, in communications with Irish Funds, the representative body for the international investment fund community in Ireland, the Central Bank of Ireland (the “CBI”) has outlined steps it plans to take in relation to facilitating domestic integration of ELTIF 2.0 to bolster Ireland’s attractiveness as a location for the establishment of ELTIFs.

The CBI has confirmed the following points to Irish Funds:

• The CBI has developed a standalone ELTIF chapter (not yet published) for inclusion in the AIF Rulebook (here). It is proposed that the ELTIF will be a standalone product and therefore, it will not need to be separately authorised as a Retail Investor Alternative Investment Fund (“RIAIF”) or a Qualified Investor Alternative Investment Fund (“QIAIF”). The authorisation process for an ELTIF will broadly follow the existing authorisation processes in place for RIAIFs and QIAIFs.

• The CBI intends to consult on the amendments to the AIF Rulebook later this year, with a consultation paper anticipated to be published in October. Given the challenging timeframe and overall aim to align with the full entry into force of the revised ELTIF Regulation, the CBI is considering a foreshortened consultation period of approximately four to six weeks.

• It is expected that most of the amendments specific to the AIF Rulebook will be with respect to supervisory and operational matters that currently apply to authorised Irish AIFs, such as expected disclosures and regulatory reporting, rather than product specific rules as these are already provided for directly in the ELTIF Regulation.

• The CBI intends to publish the revised Rulebook as quickly as possible which will facilitate the authorisation of ELTIFs under the ELTIF Regulation. The proposed standalone ELTIF chapter of the AIF Rulebook will set out rules for Irish ELTIFs which complement the requirements of the ELTIF Regulation. It is hoped that the revised Rulebook will be in place when the Level 2 measures are in place. Once the revised AIF Rulebook is published, Irish ELTIFs can be authorised under the 2023 ELTIF Regulations or the 2015 ELTIF Regulations.

• The CBI will engage with the industry as the ELTIF amendments to the AIF Rulebook progress.

Comment

ELTIF 2.0 is proving to be an attractive product to fund promoters and aligns with the EU’s policy priorities of channelling capital towards European long-term investments in the real economy and promoting the EU’s overarching aim of achieving inclusive and sustainable growth. This is a welcome update from Irish Funds providing certainty to the market and highlighting the CBI’s commitment to facilitate the launch of ELTIFs in Ireland in line with other EU Member States.

Also contributed to by David O’Keeffe