Established specifically for the purpose of putting depositors’ money in assets, a pooled fund in Ireland (PFs) can be set up as
- a UCITS;
- an AIF for a QIAIF or RIAIF investor.
The country’s National Bank (CBI) is responsible for the licensing & supervision of PFs.
Pooled Funds’ Regulation in Ireland
PFs are mainly regulated by:
- AIFMD (and its local requirements);
- Rules for prospectuses;
- CBI’s Code of Practice;
- EU Commission’s Regulations on Depositories, Transparency & Leverage;
- EU regulations.
Ireland: Licensing of Pooled Funds
Establishment of PFs requires getting the CBI’s approval. Please see below for the timeframes within which applications are reviewed:
UCITS/RIAIF - regular procedure
20 business days
10 business days
UCITS/RIAIF - fast track procedure
10 business days
5 business days
The distribution & marketing of NRFs are vested in distributors, investment managers & other relevantly authorized organizations.
Obtaining an AIFM license in the Republic of Ireland requires compliance with minimum qualification criteria for investors. AIFs may be purchased by professional investors, while QIAIFs may be sold to qualified investors. Selling QIAIFs to investors based in other countries of the EU is possible by using marketing passports for AIFMDs.
QIAIF: Ownership Restrictions
Those interested in establishing an Irish QIAIF should keep in mind that only professional investors can purchase such a structure. Professional investors can be:
- MiFID-authorized investors;
- relevantly experienced investors assessed by lending institutions in the EU, UCITS & MiFID;
- individuals capable of providing written confirmation of sufficient experience to assess the risks & benefits of a proposed investment;
- individuals capable of providing written confirmation of having sufficient experience in acquisition, disposal or management of immovable property similar to that of QIAIFs.
Obtaining a license requires compliance with relevant EU legislation, as well as the CIB’s rules & regulations.
NPFs are exempt from a tax on profits derived from their main investments. Despite the fact that capital gains, interest,& dividends can be taxed in countries where issuers are based, they can be canceled or reduced on the basis of tax treaties signed by those countries.
Establishing a Non-Profit Foundation in Ireland: Protecting Assets
Pooled funds are required to appoint a local depository whose main responsibilities will include asset custody, cash monitoring & supervision. They must be:
- lending institutions;
- investment entities meeting the EU requirements for capital & authorized by MiFID;
- institutions that must observe prudential regulation.
Restitution of financial instruments lost during custody is also the responsibility of depositaries. Their responsibilities are more prescriptive & related to the monitoring of cash flows on a daily basis, DD & risk assessment.
Those intending to obtain a QIAIF Governor's license in Ireland should keep in mind that QIAIFs must publish financial reports & results of independent audits on an annual basis. They are required to do this within six months since the end of a fiscal year. Those of them that are structured as mutual funds are required to prepare & submit unaudited semiannual reports within two months of a respective date. Every month, they must report their net worth, issued units, redemptions & subscriptions, P&Ls, commissions & expenditure to the CBI. On a quarterly basis, they must also submit statistical reports.
Looking to establish a pooled fund in Ireland? Need advice on pooled funds’ regulation in Ireland? Why not contact IQ Decision UK?