UCITS Regulation

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Central Bank Fund Authorisation

There are two main categories of fund which are authorised by the Central Bank; undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs). See separately regarding the various alternative legal structure for funds in Ireland.

There is provision for FastTrack and non-fast-track authorisation of UCITS and retail investor AIF . Fast-track approval is 10 working days with five working day timelines for comments. Non-fast-track periods are 20 days with 10 working days for subsequent comments. A 24-hour turnaround period is offered in respect of qualified investor AIFs.

UCITS Authorisation

If a UCITS established in another member state proposes to market its units in Ireland, it must ensure that its home state regulator provides the Central Bank with the documentation required under the UCITS directive. Amendments to the marketing documents must be notified

In the case of marketing outwards, the Central Bank must be notified. The relevant documents must be provided to the Central Bank which will notify the provider when transmission to the relevant state has taken place

All UCITS must publish a key investor information (KID) document in accordance with published guidance. It must be furnished to the Central Bank

The Central Bank has published guidance on topics to assist users of the UCITS  regulations including

  • inward marketing requirements
  • Key information documents
  • permitted markets
  • prospectus disclosures
  • eligible assets
  • acceptable investments in other forms
  • relevant funds
  • directors
  • financial indexes
  • management administration transfer agent and investment agreements
  • fund and third-party approval
  • authorisation process
  • ECB reporting requirements for money market funds
  • share classes
  • derivatives and efficient portfolio management
  • performance fees
  • depositories
  • asset valuation
  • director time commitment
  • umbrella funds

Application for UCITS Authorisation

The application for authorisation is made in writing. It must include

  • the completed application forms
  • draft fund documents including a prospectus
  • draft agreements /appointments

The application forms depend on the type of funds concerned. They include detailed questionnaires and provisions in relation to

  • basic information required
  • the prospectus
  • the company constitution instrument of incorporation/ trust deed
  • depository agreement
  • management agreement
  • administration agreement
  • investment management agreement
  • some funds supplement
  • distribution agent agreement
  • authorisation date checklist

There are further and additional requirements in respect of money market funds

The directors and managers must meet the fitness and probity requirements. They must have the necessary qualifications skills and experience to perform the duties of the position. The must be honest and meet ethical standards. Directors must complete an individual questionnaire through the online reporting system

Ongoing Requirements

Post-authorisation, there are ongoing mandatory requirements. Any changes to the key documents, appointments, resignations of directors or service providers must be notified/submitted for approval. Changes in share classes must be notified.

Changes in agreements with depositories the trustees/deed of constitution or their equivalent must be notified and approved. The required documentation must be submitted. Changes in the depository fund administrator and management companies must be notified and approved.

There are provisions for revocation of approval of UCITS.

Funds are supervised through a combination of proactive supervision, reactive supervision, thematic reviews and inspections in accordance with the PRISM approach which takes account of probability risk and impact. This is the Central Banks risk-based framework supervision of regulated firms. Investment funds are classified as low impact.

The UCITS regulation provides requirements applicable to funds and service providers. There are ongoing reporting obligations for each authorised UCITS. This includes

  • monthly half-yearly and annual reports
  • audited accounts
  • quarterly returns to statistics Department

The levy is payable in accordance with published criteria. An additional supervisory levy applies. Stand-alone funds are levied at €5,000 in 2018. Umbrella funds are levied at a per fund rate