CBI publishes Q&A for UK AIFMs marketing AIFs in Ireland

With uncertainty remaining as to how the situation will look from 1 January 2021 when the UK's Brexit transition period ends, the Central Bank has provided a series of Q&As covering the different scenarios of AIFs being marketing into Ireland by UK AIFMs following the end of the Brexit transition period. The Central Bank has also clarified the treatment and approval of UK investment managers appointed to Irish collective investment schemes post-Brexit.

In addition, it has reminded Irish collective asset-management vehicles, unit trusts and credit unions (together 'Applicable Financial Vehicles') authorised on or before 25 June 2020 that the deadline for submitting details of their beneficial ownership to the Central Register maintained by the Central Bank is 25 December 2020.

Looking at each in turn:

Brexit Q&As for UK AIFMs

With the UK set to become a third country after 1 January 2021, the Central Bank has sought to clarify what practical implications this will have for AIFs marketed in Ireland by a UK AIFM.

(a) UK AIFM marketing EU AIFs

For UK AIFMs currently marketing EU AIFs in Ireland under Regulation 33 of the Irish AIFM Regulations ('Regulation 33') (Article 32 of the AIFMD), the Central Bank confirms, among other things that

• From 1 January 2021, marketing will need to be done under Regulation 43 of the Irish AIFM Regulations ('Regulation 43') (Article 42 of the AIFMD) (ie conditions for marketing in Member States without a passport for AIFs managed by non-EU AIFM)

• Where the UK AIFM had previously notified the Central Bank under Regulation 33, a formal notification will now need to be made to the Central Bank under Regulation 43

• The notification form can be found on the Central Bank's website

• Where a UK AIFM is transitioning from the Regulation 33 regime to the Regulation 43 regime, notifications can be made to the Central Bank before 1 January 2021 but will not be processed before that date. If a notification under the Regulation 43 is made before 1 January 2021, it will be effective from that date and marketing can commence (marketing can commence even if the UK AIFM has not yet received a clearance email from the Central Bank)

• Less onerous checks will be carried out in respect of UK AIFMs and AIFs operating under the Regulation 43 regime where the UK AIFM previously operated under the Regulation 33 regime 

• There is no requirement for a UK AIFM to appoint a depositary in order to be able to market AIFs to professional investors in Ireland

(b) UK AIFMs marketing non-EU AIFs

For UK AIFMs currently marketing non-EU AIFs under the Regulation 37 of the Irish AIFMD Regulations ('Regulation 37') (Article 36 of the AIFMD), the Central Bank confirms, among other things that

• There is no requirement for de-notification under the Regulation 37 regime

• Where the UK AIFM had notified the Central Bank under the Regulation 37 regime, a formal notification will now need to be made to the Central Bank under the Regulation 43 of the Irish AIFMD Regulations ('Regulation 43')

• The notification form can be found on the Central Bank's website

• If a notification under the Regulation 43 regime is made before 1 January 2021, it will be effective from that date and marketing can commence immediately (marketing can commence even if the UK AIFM has not yet received a clearance email from the Central Bank)

• Less onerous checks will be carried out in respect of UK AIFMs and AIFs operating under the Regulation 43 regime where these previously operated under the Regulation 37 regime 

The Q&As also make clear that there are no fees associated with notifications under the Regulation 43 regime.

Where a UK AIFM has notified the Central Bank under Regulation 43 but has not yet commenced marketing, a regulatory reporting obligation kicks in under Regulation 25 of the Irish AIFMD Regulations -- this continues until the notification is withdrawn without marketing having ever commenced or that marketing has ceased and there are no investors in the relevant AIF in Ireland.

Treatment of UK Managers

The Central Bank has also advised that UK investment managers currently acting for Irish collective investment schemes may continue to do so but will be required to notify the Central Bank in relation to the change of their regulatory status following the end of the transition period. However, such a notification may be made after the change in the entity's status rather than in advance.  For new appointments, UK investment managers will be considered as non-EU investment managers and they will be subject to a full clearance process. It is not anticipated the Central Bank will issue a general communication on this matter.

Beneficial Ownership Register

As we have previously reported, in implementing the EU's Fourth Anti Money Laundering Directive, the Irish Minister for Finance established a Beneficial Ownership Register of corporate and other legal entities.

Applicable Financial Vehicles caught by these regulations and which were authorised or registered on or before 25 June 2020 are reminded that they must submit their beneficial ownership details to the Central Register maintained by the Central Bank by 25 December 2020.