knowledge 23 July 2026 |

Updates to the UCITS framework: Key Changes for 2026

NEW CENTRAL BANK UCITS REGULATIONS

The CBI’s new UCITS Regulations (the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2026) incorporate changes required as a result of the amendments introduced by AIFMD II to the UCITS Directive, and also reflect other unrelated changes and updates that the CBI sought to make as part of its general review of the existing legislation, including to incorporate various CBI and ESMA guidelines published since 2019 (for example in relation to performance fees). The publication of the new CBI UCITS Regulations followed the CBI’s extensive CP161 consultation process, and the CBI has also published its Feedback Statement to CP161, addressing responses received from stakeholders on the proposed changes.

The new CBI UCITS Regulations repeal and replace the previous 2019 CBI UCITS Regulations and introduce a number of changes to the existing Irish UCITS framework, including:

The New Liquidity Management Tools (LMT) Framework

The CBI UCITS Regulations align the domestic Irish UCITS framework with the changes made by AIFMD II, in particular by providing for the mandatory selection of prescribed LMTs. In line with ESMA’s recommendation, the CBI has retained the requirement for the UCITS management company as the responsible person to consider selecting at least one anti-dilution tool and one quantitative-based LMT, noting this is only a recommendation rather than a mandatory requirement.

Updates to Performance Fees

The new CBI UCITS Regulations include amendments to align with the ESMA Guidelines on Performance Fees in UCITS and certain types of AIFs. The CBI has also published its updated Guidance on Performance Fees of UCITS and certain types of Retail Investor AIFs (RIAIFs). The updated Guidance incorporates the ESMA Guidelines into the CBI’s framework. It applies to UCITS and to RIAIFs, except for closed-ended RIAIFs and RIAIFs with venture capital, private equity or real estate strategies.

The revised Guidance incorporates a number of updates, including:

• permitting a broader range of performance fee methodologies, including hurdle rates, fulcrum fees and other symmetrical fee models, in line with the ESMA Guidelines;
• permitting the performance reference period to be set to less than the life of the relevant fund for certain performance fee models (subject to a minimum of 5 years);
• permitting performance fees to crystallise more frequently than annually provided that certain conditions are met.

The revised Guidance also removes the obligation for the depositary to verify the calculation of performance fees, replacing this with an obligation on the part of the UCITS management company, as the responsible person, to ensure that the depositary (or a competent person appointed by the UCITS management company and approved by the depositary) verifies that procedures have been effectively implemented to ensure that any performance fees payable and accrued pursuant to the fund performance fee payment cycle, are calculated in accordance with the constitutional document and the prospectus of the fund.

Additional Disclosure Requirements for Recurring NAV Based Fees

The new CBI UCITS Regulations introduce a requirement to disclose, in the prospectus, the maximum fee payable for any recurring fees which are calculated based on the NAV of the UCITS and payable out of the assets of the UCITS.  In its CP161 Feedback Statement, the CBI gave, as an example of recurring NAV-based fees that were not being clearly disclosed to investors, research fees calculated on the basis of NAV. The CBI confirmed in its CP161 Feedback Statement that the ability to pay fees/expenses to distributors, paying agents or representative agents out of the assets of the UCITS at normal commercial rates remains unchanged.

Connected Party Rules

The existing connected party transaction rules have been extended to include transactions entered into between the UCITS and a shareholder/unitholder.  However, for the avoidance of doubt, those rules do not apply to transactions by shareholders/unitholders in relation to their shares/units (e.g. subscriptions, redemptions, dividend payments, conversions etc.)

ETF Updates

The new CBI UCITS Regulations codify existing UCITS Q&A guidance, expressly permitting different dealing cut-off times for cash and in-kind subscriptions/redemptions, as well as for hedged and unhedged share classes where share class-level currency hedging is used. They expressly permit the “UCITS ETF” designation to be applied at share class level, rather than only at fund or umbrella level, codifying the 2024 update to the CBI’s UCITS Q&A and reversing the CBI’s previous interpretation of ESMA’s guidelines on the use of the “UCITS ETF” identifier in the name of an ETF (and now aligning this interpretation with other European regulators). These changes provide helpful clarity and additional operational flexibility for ETFs.

Technical tidy-up changes

The new CBI UCITS Regulations include a number of other technical tidy-up changes. They also incorporate guidance previously published by the CBI in responses to its UCITS Q&A, putting some of those responses on a statutory footing in the new CBI UCITS Regulations, including for example simplifying the reporting framework, introducing revised rules regarding the ICAAP questionnaire for management companies that provide individual portfolio management services, updates to align with the EU Money Market Fund Regulation and confirming the CBI’s discretion to impose additional residency requirements at the point of authorisation of a UCITS management company based on its nature, scale, and complexity.

Impact of changes

The new CBI UCITS Regulations represent a consolidation and modernisation of the Irish UCITS regulatory framework. While many of the changes formalise existing regulatory expectations and guidance, fund management companies and funds should carefully review their governance, liquidity management, disclosure, reporting and capital adequacy arrangements, together with relevant fund documentation, to ensure compliance with the revised regime.

EMIR 3.0 UPDATES

Separately, the European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) (No. 2) Regulations 2026 have also been published. They amend the existing 2011 UCITS Regulations to transpose the revised UCITS counterparty risk-spreading rules introduced under EMIR 3.0 into Irish law.

Under the EMIR 3.0 framework, any derivative transaction entered into by an Irish UCITS (regardless of whether it is an exchange-traded or OTC derivative) which is not centrally cleared through:

• an EU clearing counterparty authorised by ESMA under the EMIR framework; or
• a third country clearing counterparty recognised by ESMA under the EMIR framework,

will need to be taken into account when calculating its counterparty risk exposure for the purposes of complying with the UCITS counterparty risk limits.  The focus has moved from whether or not a derivative is an OTC derivative to whether the derivative has been centrally cleared through a central counterparty which is authorised or recognised under EMIR. This amendment will impact the standard UCITS investment restriction wording and fund management companies and funds should consider the impact of the changes on their existing fund structures and documentation.