knowledge 16 January 2020 |

The A-Z of Regulatory Deadlines for Irish Funds and Fund Service Providers in 2020

AIFMs

Alternative Investment Fund Managers (“AIFMs”) must submit their annual audited accounts to the Central Bank of Ireland (“Central Bank”) within four months of the relevant reporting period. AIFMs must also 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.

Anti-Money Laundering/Counter Terrorist Financing

Under the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “Corporate Regulations”), an inscope entity that came into existence on or after 22 June 2019, must deliver its beneficial ownership information to the Central Register within 5 months from its date of incorporation. An inscope entity that came into existence prior to 22 June 2019, was required to deliver its beneficial ownership information to the Central Register by 22 November 2019. See our related briefing here.

The European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019 require the trustees of certain express trusts to maintain and hold beneficial ownership information in an internal beneficial ownership register. While there is currently no requirement to report such information to a central register, such a requirement is likely to be introduced in the near future, in order to comply with the EU’s Fifth Money Laundering Directive 2018/843.

Closet Indexing

Documentation updates triggered by the Central Bank’s thematic review of UCITS funds on the subject of closet indexing (the “Review”) must be completed by 31 March 2020.

One of the Central Bank’s key findings arising from the Review was that investors were not always given sufficient or accurate information about the fund’s investment strategy in the Prospectus and KIID, affecting their ability to make an informed decision on whether or not to invest in the fund. In light of this finding, the Central Bank required all UCITS funds to consider the accuracy of their Prospectus and KIID and gave them until 31 March 2020 to make any resulting amendments.

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 2020.

Corporate Governance

Under the Irish Funds Corporate Governance Code for Collective Investment Schemes and Management Companies (the “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 of the Board’s overall performance and that of its individual directors.

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 entities to which such functions have been delegated. 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 2014 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 regulated market of Euronext Dublin (or another regulated market of an EEA Member State) must consider whether they are in scope of the European Union (Disclosure of Non-Financial and Diversity Information by Certain Large Undertakings and Groups) Regulations 2017.

EMIR

Regulation 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. Regulation 2019/834 (“EMIR 2.1”), which amends EMIR, was published in the OJ on 28 March 2019. EMIR 2.1 makes a number of changes to EMIR, including the EMIR reporting obligation. In particular, in the case of a UCITS or AIF, the UCITS ManCo and AIFM, respectively, is now responsible and legally liable for reporting details of OTC derivative contracts on behalf of that UCITS or AIF, as applicable, and for the correctness of the details reported. Moreover, a financial counterparty is solely responsible and legally liable for reporting trades with a non-financial counterparty that falls below the clearing thresholds and for ensuring the details reported are accurate. These changes apply from 18 June 2020.

For further information, see our briefing here.

Financial Statement Filing

Under 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 2019 must file the relevant documents on or before 30 November 2020.

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 for UCITS ManCos and AIFMs is due on 31 January 2020. We expect the submission due date for investment funds to be 28 February 2020.

Fund Profile Return

The annual Fund Profile Return (“FPR”) is due on 28 February 2020.  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 2020.  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.

Packaged Retail Investment and Insurance Products (PRIIPs)

The PRIIPs Regulation 1286/2014 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 2021.

AIFs which have issued a PRIIPs KID must review the KID regularly, when there is a significant change, and at least annually. However, there is no annual refresh deadline.

Securities Financing Transaction Regulation 2015/2365 (SFTR)

SFTR creates a framework under which counterparties of an SFT have to report details of the transaction to trade repositories. In cases where a UCITS/AIF is a counterparty to an SFT, its manager is responsible for reporting that transaction to a trade repository on behalf of both parties.

Delegated Regulation 2019/356 supplementing the SFTR with regard to RTS specifying the details of SFTs to be reported to trade repositories entered into force on 11 April 2019 and triggered the start of the reporting obligation timetable. UCITS and AIFs will be subject to the reporting requirement from 12 October 2020 in respect of SFTs concluded on or after 11 October 2020.

SFTs entered into before 11 October 2020 must be reported by 18 April 2021, if those SFTs were outstanding on 11 October 2020; and

(a)the remaining maturity of those SFTs on that date exceeds 180 days (eg 9 April 2021); or

(b)those SFTs have an open maturity and remain outstanding 180 days after that date.

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 2019.

UCITS ManCos

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 2020.  This return applies to all UCITS ManCos and requires the upload of the firm’s ownership details.