Category: Investment Funds

The Central Bank publishes notes applicable to the regulation of mutual funds.  There are distinct notices in respect of the UCITS funds and non-UCITS funds.  In broad terms non-UCITS funds are domestic facing funds.  UCITS funds are those which may be marketed to the European Union and are established under EU wide regulations. The NU […]

The legal structure of a fund is determined to an extent by the relevant statutory provisions of the jurisdiction of establishment.  The fund may require to be open-ended or closed ended. Some jurisdictions may not allow open-ended vehicles.  Funds which are invested in less liquid assets may better be structured as closed end vehicles so […]

Some arrangements may not be subject to domestic funds legislation because they do not fall within the definition of a fund, although they might be referred to as such.  Other entities may fall within the definition of a fund. but may enjoy an exemption. The exemptions are commonly granted to funds with a small number […]

The fund manager manages the funds in accordance with the relevant provisions  incorporated in the memorandum and articles of association, trust deed or other constitutional document.  It is responsible for the funds’ operation. It has quasi fiduciary obligations. The fund manager makes the requisite investment decisions advised by the investment manager or advisor.  It undertakes […]

Funds are established under various types of constitutional documents.  Constitutional documents may be the Memorandum and Articles of Association of an open or closed end company.  It may be a trust deed, contractual arrangement or partnership agreement. Operating agreements would be entered between the trustees and manager or the fund and manager.  Agreements will be […]

A collective investment scheme whose principal object is investment in another single collective investment scheme is subject to the following rules in addition to general rules which are not dis-applied below. The underlying schemes must be authorised in Ireland or in other jurisdiction recognised by the Central Bank as providing equivalent investor protection.  Prospectus must […]

Special stock exchange listing rules. There are special stock exchange rules in respect of collective investment schemes.   They are in addition to the central bank rules governing the same. The applicant must be duly incorporated and established.  It must operate in accordance in its constitutional document.  It must invest and manage its assets in such […]

An AIFM must at all times act honestly, with due care and diligence and fairly in conducting its activities. The following obligations apply to AIFMs (alternative investment fund managers). It must act in the best interests of each AIF or its investors which it manages and the integrity of the market.  It must have and […]

The Alternative Investment Fund Managers Directive came into force in July 2013.  It followed in the wake of the 2008 financial crisis and the perception of insufficient regulation. The Directive provides for uniform set of rules for all managers of alternative investment funds including private equity funds and venture capital funds.  These have previously been […]

The Investment Services Directive was given force in Ireland by the Investment Intermediaries Act 1995. The Act still applies to a limited number of entities. The Prudential Handbook for Investment Firms applies to investment business firms authorised by the Central Bank under that Act. It does not apply to funds which are authorised by the […]

There were two broad types of investment fund in Ireland, UCITS and AIF. There are five types of legal structure: unit trust, contractual fund, investment limited partnership, investment company and Irish Collective Asset Management Vehicle. The Central Bank authorises funds. It requires appointment of an administrator, Irish-based depository/custodian; management company (Unit Trust and CCFs); Alternative […]

Alternative Investment Fund, Qualifying Investor. A Qualifying Investor AIF shall have a minimum subscription of €100,000 or other, equivalent in other currency.  It shall not accept subscriptions from persons, group amounts of less than this for individual investor. The fund may only accept subscriptions from investors who is a professional  client within the meaning of […]

Fund may be constituted as a unit trust, common contractual fund accompany a (2015 act) or investment limited partnership.  It may be authorized by the central bank as a UCITS or alternative investment fund.  A UCITS fund may be sold to the public.  There are accordingly significant restrictions on investment and borrowing. The alternative investment […]

A QIAIF must publish a prospectus and keep its essential elements up to date.  It must contain sufficient information for investors to make and informed of judgment on the investment proposed. It must be offered free of charge to every prospective unit holder before the contract for the acquisition of units is entered. The fund […]

Part 24 of the Companies Act 2014 applies to investment companies. It reenacts the Companies Act 1990 which provided for companies with variable capital for the purpose of acting as funds. See generally the sections on funds and the various type of entities which may be vehicles for use as funds. An investment company is […]

Alternative Investment Fund, Qualifying Investor.  A Qualifying Investor AIF shall have a minimum subscription of €100,000 or other, equivalent in other currency.  It shall not accept subscriptions from persons, group amounts of less than this for individual investor. The fund may only accept subscriptions from investors who is a professional  client within the meaning of […]

Retail AIFs prospectus requirements. A Retail AIF must publish a prospectus which must be dated.  The essential elements must be kept up to date.  It must contain sufficient information for investors to make an informed judgment of the investment proposal to them. The statutory obligations in respect of disclosures to unitholders apply.  See the separate […]

The rules in the rulebook apply to all qualifying AIFs.  However, the definitive rules are set out in their letter of authorisation. A Qualifying Investor AIF shall have a minimum subscription of €100,000 or equivalent in other currencies.  It shall not accept subscriptions from persons that group amounts of less than €100,000 for individual investors. […]

AIFs and qualifying investor AIFs may be established as unit trusts, designated investment companies under the Companies Act 1990; Investment limited partnerships under the Investment Limited Partnership Act 1994 or common contractual funds under the Investment Funds Act 2005. The conditions for approval of AIFs are set out in the AIF rulebook which supersedes the […]

Non-UCITS collective investment schemes, money market schemes, schemes that label or markets itself as a money market must comply with the following requirement.  It must classify itself as a “Short-Term Money Market Fund” or a “Money Market Fund”. The scheme must indicate in its prospectus whether it is a Short-Term Money Market Fund or a […]

General investment restrictions applicable to non-UCIT scheme.  The following apply to all UCIT schemes except where dis-applied by schemes, by notices relating to schemes with specific investment and/or marketing objective.  Schemes may derogate from the investment restrictions for six months following the date of their launch provided they adhere to the principle of risk sharing. […]

Non-UCIT Schemes  Collective investment schemes, general conditions. A non-UCIT management company administration company or trustee company must have  minimum capital and report to the Central Bank periodically on them.  The initial minimum capital requirement is around €125,000.  The requirement is calculated as one quarter of the firm’s total expenditure from its most recent account.  The […]

The fund must publish a prospectus and its essential elements must be kept up-to-date.  It must contain sufficient information to allow investors to make an informed judgment of the investment proposal.  It must comply with the provisions of the regulations regarding disclosure to the unit holders. The prospectus must be offered free of charge to […]

Supervisory conditions for the retails AIFs Every retail AIF must have an authorised AIF manager. It must notify the Central Bank of any proposed amendment to its prospectus.  It must not alter its constitutional documents or change its names without the prior approval of the Central Bank. A retail AIF must ensure that the offer […]

Money market retail funds must indicate whether they are short-term funds or money market funds.  It must contain certain warnings drawing attention to difference between the nature of a deposit and the nature of an investment in a money market fund with reference to the risk that the principal invested in the money market fund […]