Client Asset Requirements For Fund Service Providers

Author:Ms Breeda Cunningham and Michele Barker
Profession:Dillon Eustace


On 2 August 2013, the Central Bank of Ireland ("Central Bank") published Consultation Paper CP 71 ("CP 71") on proposed Client Asset Regulations and Guidance for investment firms and fund service providers ("FSPs"). Having considered the responses received to CP 71, the Central Bank took the decision to introduce two separate set of regulations one for investment firms and another for FSPs. This briefing deals with the regulations which apply to FSPs and is relevant to fund administrators and depositaries/custodians authorised under the Investment Intermediaries Act 1995 (as amended), (the "IIA"). On 30 March 2015, the Central Bank published a set of regulations; Investor Money Regulations 2015 for Fund Service Providers1, (the "Investor Money Regulations" or the "Regulations") which aim to strengthen the safeguards around investor money. The Central Bank has published guidance ("Guidance on Investor Money Regulations for Fund Service Providers") to assist FSPs to comply with the Investor Money Regulations. The Investor Money Regulations will come into operation on 1 April 2016.

On the publication of the Regulations, Director of Markets Supervision, Gareth Murphy, said "The publication of these Regulations marks a significant development with regard to thesafeguarding of client assets and investor money in Ireland. The development of these Regulations is the outcome of a lengthy period of industry consultation with investment firms and funds service providers. The Central Bank will closely monitor the implementation of these Regulations so as to ensure that our aim of enhancing investor protection and safeguarding client assets is achieved."

Who do the Regulations apply to?

The Investor Money Regulations apply to FSPs when holding investor money. A FSP is defined as meaning a person who is authorised under the IIA to carry out (i) the administration of collective investment schemes or fund accounting services or acting as a transfer agent or registration agent for such schemes or (ii) custodial operations involving the safekeeping and administration of investment instruments. Accordingly, the Investor Money Regulations will apply to fund administrators and to depositaries/custodians authorised under the IIA when they hold investor money.

When does a FSP hold investor money?

The Investor Money Regulations are issued pursuant to section 48 of the Central Bank (Supervision and Enforcement) Act 2013 and apply to FSPs when holding...

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