knowledge 21 January 2019 |

The A-Z of Regulatory Deadlines for Irish Funds and Fund Service Providers

Additional Supervisory Levy

An asset management firm¹ authorised on or after 1 January 2019, must pay an additional supervisory levy (“ASL”), on a once-off basis, as must an authorised asset management firm seeking to extend its authorisation under the applicable legislation.

The ASL is payable in the first year following the firm’s authorisation/approval and the amount depends on the firm’s PRISM Impact Rating, which is issued to firms following authorisation. The ASL is in addition to the annual industry funding levy which is payable by all financial service providers regulated by the Central Bank of Ireland (“Central Bank”). For further information, see our briefing here.

AIFMs – Submission of Accounts

Alternative Investment Fund Managers (“AIFMs”) must submit their annual audited accounts to the Central Bank within four months of the relevant reporting period. The annual audited accounts must be accompanied by the Minimum Capital Requirement Report, which forms part of the AIF Rulebook.

AIFMs must report certain financial information to the Central Bank on a half-yearly, quarterly or monthly basis.  This includes interim financial statements such as a Balance Sheet and Profit & Loss account and the Minimum Capital Requirement Report.

Each AIFM must also ensure that it obtains any appropriate annual confirmations that it may require from any relevant party to ensure compliance with the terms of the AIFM’s programme of activity.  It must also ensure the adoption of the valuation policy and make disclosure in respect of connected party transactions.

Common Reporting Standard

The Common Reporting Standard (“CRS”), also known as the Standard for Automatic Exchange of Financial Account Information, requires participating jurisdictions to exchange certain information held by financial institutions regarding their non-resident customers.  Under the Returns of Certain Financial Information by Reporting Financial Institutions Regulations 2015, financial institutions must report CRS information to Revenue by 30 June each year, with the next returns due by 30 June 2019.

Corporate Governance

Under the Irish Funds Corporate Governance Code for Collective Investment Schemes and Management Companies (“Code”) the Board must carry out an informal review of its overall performance and that of individual directors at least annually.  It must also review compliance with its procedures for dealing with conflicts of interest and the terms of reference of any board committees at least on an annual basis.

The Code also requires a Board to carry out a three year formal documented review and any Board that has not yet done so should complete this review as soon as possible, presuming this three year period has expired.

Investment firms must ensure that they comply with the Central Bank’s updated Corporate Governance Requirements for Investment Firms and Market Operators by 1 July 2019.  The proposed corporate governance requirements will apply to firms authorised by the Central Bank that are designated as High, Medium High or Medium Low Impact under the Central Bank’s Probability Risk Impact System (PRISM).  It will not apply to firms designated as Low Impact, although the Central Bank is encouraging such firms to adopt the requirements consistent with best practice.

Delegate Due Diligence

AIFMs and UCITS management companies (“UCITS ManCos”) delegating functions relating to the funds that they manage are required to maintain adequate oversight and perform ongoing due diligence on any such delegates. Accordingly, AIFMs and UCITS ManCos should review and confirm their delegate due diligence plans, including making preparations for any necessary on-site visits.

Directors’ Compliance Statements

Under the Companies Act 2014, all public companies (“PLCs”), including UCITS formed as PLCs, must make an annual compliance statement in the directors’ report, which forms part of the company’s annual financial statements. In their compliance statement, the directors must acknowledge their responsibility for securing the company’s compliance with specified provisions of the Companies Act, Irish tax legislation and additional market abuse requirements in respect of listed companies. They must also confirm certain other matters.  This requirement does not apply to PLCs authorised under the Companies Act as AIFs.  For further information, see our briefing here.

Diversity Reporting Obligations

Corporate funds (either AIF or UCITS PLCs) which have shares admitted to trading on the main securities market of Euronext Dublin (or another regulated market of an EEA Member State) must consider whether they are in scope of the EU (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017. In-scope companies must comply with diversity reporting obligations for financial years beginning on or after 1 August 2017.

EMIR

Regulation (EU) 648/2012 on over the counter (OTC) derivatives, central counterparties and trade repositories imposes a number of obligations on EU derivatives market participants, including funds and fund managers. These include an obligation to; a) clear certain derivatives via a central counterparty (“CCP”), and b) impose margin requirements on all OTC derivative contracts that are not cleared by a CCP and which are entered into at a time when both parties are past the EMIR phase-in date applicable to them.  The clearing obligation commenced on 21 January 2016 and is being gradually phased in over the course of the next few years.  Fund and fund managers can find further information regarding these phase in dates in our briefing here.

The requirement to exchange initial margin commenced on 1 September 2017.  Counterparties that have, or belong to groups each of which has, an aggregate average notional amount of non-centrally cleared derivatives that is above EUR 750 billion must exchange initial margin from 1 September 2019.  For further information, see our briefing here.

Financial Statement Filing

Under new requirements set out in the Companies (Accounting) Act 2017, investment companies, including AIF PLCs and certain UCITS that are registered as PLCs must file copies of the following documents with the Companies Registration Office using Form FS1:

(a) the statutory financial statements of the Company for the financial year;

(b) the directors’ report for the financial year; and

(c) the statutory auditors’ report on those financial statements and that directors’ report.

In accordance with guidance from the CRO, all financial statements attached to a Form FS1 must be in an unbound scannable format.  Form FS1 has a filing fee of €15.  Each company must submit the relevant copies of the documents not later than 11 months after the end of its financial year.  A company with a financial year-end of 31 December 2018 must file the relevant documents on or before 30 November 2019.

Fitness and Probity Standards

Each regulated financial service provider (“FSP”) must complete an Annual Pre-Approval Controlled Function (“PCF”) Confirmation Return to the Central Bank via the Online Reporting System.  In the Return, the FSP must list all of its active PCF holders and (i) confirm that each such holder is compliant with the Fitness and Probity Standards and (ii) that they continue to agree to abide by those standards.

The Annual PCF Confirmation Return due date has not yet been published on the Central Bank website (the 2017 return had a filing deadline of 28 February 2018).

Fund Profile Return

The annual Fund Profile Return (“FPR”) is required for all Irish authorised sub-funds at 31 December 2018 and is due on 28 February 2019.  The annual update is required to confirm the sub-fund’s profile and update for changes.  The Central Bank’s guidance on completion of the FPR is available here.

Key Investor Information Documents (KIIDS)

Commission Regulation 583/2010 requires UCITS to make an updated KIID available to investors within 35 business days of 31 December each year.  This year the annual update of the KIID must be filed no later than 19 February 2019.  Any update to the KIID filed with the Central Bank must be translated (as necessary) and filed in any other host jurisdictions where the UCITS is registered to market its shares and uploaded on the UCITS' website.

Money Laundering/Terrorist Financing

The Criminal Justice (Money Laundering and Terrorist Financing)(Amendment) Act 2018 (“the Act”) which transposes the Fourth Money Laundering Directive 2015/489 has entered into force.  Funds and fund service providers will need to ensure that they comply with the Act.  For further information on complying with the new anti-money laundering framework, see our briefing here.

Money Market Fund Regulation

The Money Market Fund Regulation (“MMFR”) introduces new requirements for Money Market Funds (“MMFs”) in particular, portfolio composition, valuation of assets, diversification, liquidity management and credit quality of investment instruments and has applied since 21 July 2018.  Existing UCITS and AIF MMFs had until 21 January 2019 to demonstrate compliance with MMFR. 

In a recent joint statement published by the Central Bank and the Commission de Surveillance du Secteur Financier, Luxembourg (“CSSF”) on the treatment of share cancellation, both competent authorities stated that they will assess whether or not each fund is compliant with MMFR and will issue a decision and notify it immediately to the fund no later than 21 March 2019.  Relevant funds must confirm to the Central Bank or CSSF (as applicable) in writing no later than 21 March 2019 that all use of share cancellation mechanisms has ceased.

Packaged Retail Investment and Insurance Products (PRIIPs)

The PRIIPs Regulation applies to the distribution of any fund to a retail investor in the EU, since 1 January 2018.  Broadly, the PRIIPs Regulation requires a manufacturer or distributor of a fund to draw up and make available a pre-contract disclosure document (a “key information document” or “KID”) before making the fund available to a retail investor in the EU.  Under the PRIIPs Regulation, a UCITS manager is exempt from the obligation to produce a PRIIPS KID in respect of the UCITS it manages until 31 December 2019. This date is set to be extended until 31 December 2021.

Tax Reporting

Investment funds must comply with a number of tax reporting requirements under the Return of Values (Investment Undertakings) Regulations 2013 and should contact their administrators to ensure that their funds are fully compliant with these Regulations for the year ending 31 December 2018.

Temporary Permissions Regime

The Temporary Permissions Regime (“TPR”) is designed to ensure that UK investors have continued access to EEA funds that are currently marketed in the UK in the event that the UK leaves the EU without a withdrawal agreement.  It will facilitate market access between the EEA and the UK, if the current passporting arrangements cease to be available. 

On 8 October 2018 HM Treasury published draft Collective Investment Schemes (Amendments etc)(EU Exit) Regulations (the “Regulations”) and explanatory information setting out details of the TPR with regard to collective investment schemes.  Under the proposed scheme, EEA funds and sub-funds that have notified the UK's Financial Conduct Authority of their intention to market in the UK before exit day will be allowed to continue to access the UK market for up to three years from the day the UK exits the EU.  The Alternative Investment Fund Managers (Amendment)(EU Exit) Regulations 2018 provide a similar scheme for AIFs. 

On 7 December 2018, the UK Treasury published an updated version of the Regulations and explanatory information, according to which UCITS sub-funds launched post-Brexit day will also be able to benefit from the TPR, once the UCITS umbrella fund is already in the TPR.

The notification window for firms and funds wishing to enter the TPR is now open.  The notification window closes at the end of 28 March 2019.  For further information, see our briefing here.

UCITS

A UCITS ManCo must submit its annual audited accounts to the Central Bank within four months of the relevant report period end as well as its minimum capital requirement report.  It must also submit half yearly accounts.  Like AIFMs, UCITS ManCos must ensure that they request and receive annual confirmations relevant for compliance with their business plans.

UCITS ManCos must file the Annual Ownership confirmation by 31 January 2019.  This return applies to all UCITS ManCos and requires the upload of the firm’s ownership details.