Supervision of Investment Funds
Investment funds are supervised by the Central Bank under the “PRISM” probability risk and impact assessment principles. Irish authorised investment funds are classified as low impact.
The Central Banks AIF rulebook contains details of requirements applicable to the AIF and service providers. There are ongoing reporting obligations including
- monthly half-yearly and annual reports
- annual audited accounts
- quarterly return to statistics Department
There are ongoing supervisory requirements. Amendments to initial documents must be submitted for approval to the Central Bank. Changes of service providers appointment of investment managers investment advisers et cetera must be approved. There are provisions for withdrawal of approval of the subs fund or investment entity.
The Central Bank publishes guidance for online reporting by investment funds. Data is transmitted by secure web system the online reporting system.
The Central Bank publishes regular reporting guidance. The delegation and assignment of reporting guidance sets out procedures to delegate and assign the filing of regulatory returns on behalf of funds to system administrators
A range of fund service providers is regulated by the Central Bank.
PRISM
Fund managers are subject to ongoing supervision. The probability risk and impact system (PRISM) sets out the approach. The process includes but is not limited to
- analysis of returns submitted
- risk rating of firms
- engagement meetings and assessment in line with prism engagement model
- the full risk assessment process
- themed inspections
The directors and management must have the requisite skills and experience to perform the duties of the position. They must comply with probity requirements. The Central Banks fitness and probity requirements apply.
There are requirements for annual returns including audited accounts and material in compliance with minimum capital requirements. There are provisions for half-yearly quarterly and monthly returns. They include interim financial statements with reference to the minimum capital requirements. Returns must be made in electronic form. There is guidance in relation to the online reporting requirements
Fund administrators must submit an outsourcing return on an annual basis. Guidance is provided.
Fund administrators must at a minimum consult of the Central Bank prior to engaging in any significant new activities or establishing branches offices for subsidiaries
The auditor of the fund administrator must furnish to the Central Bank the copy of the management letter addressed to the fund administrators Board of Directors.
General ongoing authorisation requirements apply. If there is any material change in personnel structure et cetera the same must be returned and approved. Most other significant change requires notification
Supervision – PRISM
The general supervisory regime applicable to an AIF applies. They are subject to the probability risk and impact system (PRISM) approach by the Central Bank to regulation.
Supervisory processes include
- analysis of returns
- risk rating firms
- engagement meetings
- the full risk assessment process
- themed inspection
There are annual returns required in respect of financial accounts. Half-yearly quarterly and monthly returns are required. There are obligations to cooperate with Central Bank including disclosure of material matters. The external auditors must furnish the Central Bank with the management letter to the board of directors and the statutory duty confirmation stating whether circumstances have come to the retention during the annual audit.
The general post-authorisation requirements apply. Any material changes to the original documents changes in shareholders directors et cetera must be disclosed.
The fitness and probity requirements apply to directors and senior managers. They must have the necessary qualification, skills, and experience to perform their duties. Probity requires that they be honest, fair and ethical.
There are ongoing reporting obligations including
- annual returns of accounts in particular with reference to the minimum capital requirements
- yearly quarterly and monthly returns
Returns are submitted online through the Central Bank’s online reporting system. There are ongoing post authorisation obligations including in respect of changes in original key documents and structures requiring approval by Central Bank.
Ongoing UCITS Supervision
UCITS management companies are subject to ongoing supervision by the Central Bank. The supervisory process includes
- analysis of return submitted to the Central Bank
- risk rating of firms
- engagement meetings and assessment in line with the prism engagement model
- the full risk assessment process in line with the prism engagement model
- themed inspections
Annual financial accounts are required. There are half-yearly quarterly and monthly returns. The reporting intervals are advised to the management company.
There is published guidance in relation to the use of the online reporting system.
UCITS management companies are obliged to notify the Central Bank of material breaches commencement of legal proceedings and other material matters.
The auditor must supply the Central Bank with a copy of the management letter; Auditors must make an annual statutory duty confirmation to the Central Bank. Post-authorisation changes to the original documents structure or personnel capital shareholdings must be notified and approved.