In our first investment funds law newsletter for 2018, Matheson's Asset Management and Investment Funds Department would like to brief you on a number of recent developments and upcoming regulatory deadlines.
New Central Bank Filing Process for UCITS Risk Management Process Document
The Central Bank of Ireland ("Central Bank") has advised that draft UCITS Risk Management Process ("RMP") documents will no longer be reviewed by the Central Bank as part of the authorisation / application process. This change in policy follows the Central Bank's thematic review in December 2015 of how effectively UCITS implement their RMPs, which also considered the Central Bank's review procedure.
UCITS must now complete an RMP application form to verify that all of the legislative and regulatory requirements relevant to the RMP are in place. This form, together with the final signed RMP must be submitted by 12 noon on the proposed day of authorisation of the UCITS or, in the case of a sub-fund, on the day of approval of the sub-fund.
The Central Bank has advised that ad hoc reviews of individual RMPs will be carried out periodically to assess quality and compliance standards. The RMP may also be subject to on-site inspection and the Central Bank has indicated that it may conduct further thematic reviews in this area.
This change applies with immediate effect and applies to UCITS which are currently in the application process. We have been advised by the Central Bank that they are currently assessing the application process for retail investor alternative investment funds ("RIAIFs"), but the same RMP filing procedure is likely to apply and the Central Bank will communicate with industry shortly in relation to this.
Central Bank Letters regarding Brexit Planning
On 6 November 2017, the Central Bank wrote to fund boards and the boards of management companies setting out its expectations regarding Brexit planning. The Central Bank "expects firms to be well-advanced in their strategic and contingency planning for Brexit, and to have assessed the impact in a number of potential scenarios, where the UK ceases to be a member of the EEA, including a hard Brexit".
In its letter, the Central Bank states that it expects that the board will "play a pivotal role in overseeing and directing" Brexit planning. It is advised that boards give consideration to the impact of Brexit on the management company / fund's business model and operations, financial resources and legal and regulatory structures, including any additional regulatory approvals that may be required from the Central Bank.
The Central Bank has requested that the board's considerations regarding Brexit planning be documented by no later than 28 February 2018. The Central Bank may request the...