On 5 November 2014, the Central Bank of Ireland published the latest editions of its UCITS and AIFMD Q&A documents.
The latest UCITS Q&A document clarifies the application of anti-dilution levies to UCITS master-feeder fund structures.
The UCITS Regulations provide that a master UCITS shall not charge subscription and redemption fees in respect of investments made by the feeder UCITS into the master UCITS.
The Central Bank has clarified that the application of an anti-dilution levy is not considered to fall within the general prohibition on the charging of subscription and redemption fees by a master UCITS provided that:
the prospectus includes complete and unambiguous disclosure on the purpose and nature of the charge which may arise; and any such anti-dilution levy is applied at the master UCITS level only. AIFMD Q&A
The latest AIFMD Q&A document clarifies: (i) the requirements applicable to loan originating qualifying investor AIFs; and (ii) the reporting requirements for non-EU AIFMs that have notified the Central Bank of their intention to market AIFs to professional investors by private placement in Ireland but have not commenced marketing.
Clarification Regarding Loan Originating Qualifying Investors AIFs ("LO-QIAIFs")
Following the Central Bank's announcement that it will permit certain qualifying investor AIFs to engage in direct loan origination, the Central Bank has clarified the following points:
the levels of seniority and priority of claim are not relevant in determining whether an investment is a loan or not; where an intermediary introduces a borrower to a LO-QIAIF who subsequently lends to that borrower, the LO-QIAIF will still be regarded as the originator of the loan, not the introducer; a LO-QIAIF may hold debt securities where these are used solely for treasury management purposes; a LO-QIAIF may hold equity assets where these securities have been received as a result of a loan workout. There is...