Irish Regulatory Update

Author: Clerkin Lynch LLP

Date Published 26/11/2021

Updates to the Central Bank UCITS Q&As

The Central Bank of Ireland (“CBI”) has issued a series of updated editions in September and October 2021 to its UCITS Q&A document, namely the 33rd, 34th and 35th editions. These include the new Q&As ID 1101, ID 1102, ID 1103 and ID 1104. These address a diverse range of topical issues reflecting responses to market developments as well as the interplay of CBI requirements and ESMA communications.

Q&A ID 1101, issued in response to market developments in light of CP86 and in particular the shift for many funds from the self-managed model to the use of third party management companies, confirms that where new business results in a material increase in the nature, scale or complexity of a such a firm’s business, the CBI deems this to be a material change to the firm’s operating model which requires consultation with the Central Bank in accordance with Regulation 107 of the Central Bank UCITS Regulations.

Following the issuance of the ESMA Guidelines on marketing communications under the newly effective Regulation on cross-border distribution of funds (the “ESMA Guidelines”), Q&As ID 1102 and ID 1103, relate to the implementation of paragraph 8 and 47 respectively of these ESMA Guidelines. These clarify that the use of a shorter form disclaimer as outlined in the ESMA Guidelines will meet its requirements under Regulation 54(3) of the Central Bank UCITS Regulations – provided it is only used in the instances described.

Furthermore, Q&A ID 1103 clarifies that the sample wording used with regard to past performance in the ESMA Guidelines satisfies the requirements of Schedule 6(11) of the Central Bank UCITS Regulations even though the wording is not identical.

Q&A ID 1104 explains the CBI’s expectations in relation to the filing of Key Investor Information Documents (“KIIDs”) for UCITS which are implementing ESMA’s Performance Fee Guidelines with effect from 31 December 2021. This clarifies that such UCITS may elect to make either: I. two KIID filings, one to reflect changes to the UCITS arising from implementation of ESMA’s Guidelines and one to meet KIID filing obligations arising under Article 23; or II. a single filing to meet KIID filing obligations arising under Article 23 by 22 February 2022. It notes that UCITS electing for (ii), are still required to ensure that prospective investors are provided with sufficient information regarding related changes to enable them to reach an informed investment decision.