knowledge 11 September 2025 |

Central Bank to reform its requirements relating to AIFs and UCITS

Introduction

On 9 September 2025, the Central Bank of Ireland (the “Central Bank”) published:

(a) Consultation Paper 161 (“CP 161”) on proposed amendments to Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019 (the “Central Bank UCITS Regulations”) and other associated Central Bank guidance; and

(b) Consultation Paper 162 (“CP 162”) on significant proposed enhancements to the Central Bank’s AIF Rulebook.

CP 161

CP 161 outlines the intention of the Central Bank to repeal and replace the Central Bank UCITS Regulations. The intention behind this legislative overhaul is to (i) ensure that the domestic UCITS regulatory framework aligns with the European UCITS framework, (ii) incorporate outstanding updates from previous Central Bank consultations and Q&As, and (iii) amend the existing domestic rules relating to performance fees for UCITS and certain Retail Investor AIFs.

CP 162

The timely publication of CP 162 follows the publication of the revisions to AIFMD (“AIFMD II”), which entered into force in April 2024, with EU Member States being required to transpose AIFMD II into domestic law by April 2026. AIFMD II will see sweeping changes introduced on a pan–EU basis, most notably in the form of new obligations in relation to delegation, liquidity management tools (“LMTs”), loan origination, reporting and depositaries.

In light of these incoming legislative changes, the Central Bank has proposed a number of very helpful amendments to the existing AIF Rulebook in an effort to align the AIF Rulebook with AIFMD II. The proposed amendments to the AIF Rulebook will also enhance the existing Qualifying Investor AIF (“QIAIF”) regime in a number of respects by removing certain provisions which had previously been challenging for sponsors to meet (as described further below). The amendments provide welcome clarity as to the Central Bank’s expectations of regulated private funds, and support investment in private assets, which was recommended in the Government of Ireland’s 2030 Funds Review. This refinement of the AIF Rulebook will increase Ireland’s attractiveness as a domicile-of-choice for private funds, which is of particular importance as the popularity of private funds, and in particular private credit funds, continues to grow.

We have summarised below the key takeaways from CP 162.

Loan Originating QIAIFs

To effect alignment with the  loan origination framework under  AIFMD II, the loan originating QIAIF (or L-QIAIF) section of the AIF Rulebook will be removed. This ensures that there is no ‘gold-plating’ of the pan-EU loan originating framework introduced under AIFMD II and it will strengthen the promotion of Ireland as the domicile of choice for private credit funds. It also means that Irish QIAIFs which are not categorised as loan origination funds, can, as part of their credit strategy, engage in loan origination without needing to comply with any domestic loan origination rules.

Intermediary Investment Vehicles

In order to streamline the requirements for QIAIFs investing through intermediary investment vehicles, the rules relating to such vehicles will be revised in the AIF Rulebook. The current requirements relating to wholly owned subsidiaries will be removed and there will no longer be a requirement for Central Bank approval prior to the establishment of a subsidiary. Furthermore, fund directors will no longer be required to constitute the majority of the subsidiary’s board of directors and there will no longer be a prohibition onsubsidiaries entering into contracts to which the fund is not a party. New obligations in relation to investment intermediary vehicles will be introduced, requiring AIFMs to (i) disclose the use and purpose of intermediary investment vehicles in the prospectus of the fund, (ii) carry out due diligence on the intermediary investment vehicles, and (iii) have documented policies in place to monitor the intermediary investmentvehicle in question. These domestic requirements align with the requirements that already exist under AIFMD (e.g., thedepositary look-through requirements) and represent a very welcome development that will streamline the use of intermediary investment vehicles by Irish QIAIFs.

Acting as Guarantor

The existing prohibition placed on QIAIFs granting loans and acting as guarantor to third parties will be removed from the AIF Rulebook. This reflects the fact that the provision of guarantees is market practice for certain fund financing arrangements and that such restrictions are not contained in the loan origination rules under AIFMD II.

Capital Commitments

The minimum investment requirement for a QIAIF of €100,000 will be clarified so that it is clear that this amount can be met through a capital commitment of €100,000.

Additional Amendments

Additional amendments and refinements to the AIF Rulebook will be introduced to accord with the Central Bank’s objectives to align with AIFMD II and enhanced regulatory effectiveness. Some of the key additional amendments include:

• Authorisation as an AIF Management Company - the requirement in the AIF Rulebook for an entity to seek authorisation as an AIF Management Company will be removed.
• Depositaries of Other Assets - the Central Bank’s guidance published in 2021 entitled “Depositaries for AIFs under Regulation 22(3)(b) of the AIFM Regulations” will be incorporated into the revised AIF Rulebook. Furthermore, the requirement to specify the procedure for replacing a depositary in the QIAIF’s constitutional document will be removed.
• Non-EU AIFMs –the AIF Rulebook will be updated to clarify the requirements which apply to QIAIFs with registered (or sub-threshold) AIFMs or non-EU AIFMs.
• Investor voting rights - greater clarity surroundinginvestor voting rights will be introduced to ensure that the investor voting rights for QIAIFs align with the relevant provisions of the fund’s constitutionaldocument.
• Stress tests - when conducting stress tests, QIAIFs will be required adhere to the updated guidelines which establish common reference parameters of the stress test scenarios, as periodically issued by the European Securities and Markets Authority (ESMA).
• Share classes - to align with the approach taken for ELTIFs, the Central Bank’s guidance on share class features of closed-ended QIAIFs will be incorporated into the AIF Rulebook. The proposed changes will expressly allow for side-letter arrangements, subject to adherence to certain requirements (e.g., such arrangements cannot be allowed to materially disadvantage other investors in the fund).
• Warehousing – the warehousing requirements applicable to QIAIFs will be aligned with those applied to ELTIFs and this will be consistent with the valuation principles that are contained in AIFMD. Warehousing arrangements will remain subject to the connected party transactionrules meaning that investors interests will still be protected.
• Liquidity management – clarificatory amendments will be introduced to illustrate that certain administrative charges applied to investor redemptions are distinct from the use of LMTs under Annex V of AIFMD II. The updated AIF Rulebook will also include requirements for the selection and use of LMTs and reflect the ability of AIFMs to choose additional LMTs to those defined in Annex V of AIFMD II.
• Connected party dealings – the list of entities subject to the requirements relating to connected party dealings will be updated to include “unitholders” as being subject to such requirements.
• ELTIFs – the ELTIF chapter of the AIF Rulebook will be updated to ensure uniformity with the updated QIAIF chapter.

Conclusion

CP 162 and the proposed revisions to the AIF Rulebook will increase the attractiveness of Ireland as a domicile-of-choice for private fund sponsors. The alignment of the domestic UCITS regulatory regime with the European UCITS framework, as proposed under CP 161, should also be regarded as a significant and welcomed development.

The Central Bank has invited responses to CP 161 and CP 162until Friday, 5 November 2025. Following the closing of the consultations on 5 November 2025, the Central Bank will issue its feedback statements.

McCann FitzGerald LLP will be actively involved in the feedback process in respect of both CP 161 and CP 162, andso please do get in touch should you wish to discuss any aspect of the above.